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IN THE HIGH COURT OF DELHI
Sachin Datta, J.
Tewatia Construction Pvt. Ltd. - Appellant
Versus
Union of India - Respondent
Arb.P. 406 of 2022 and I.A. No. 16533 of 2022 (for directions)
Decided On : 06-12-2022
Important Points
Subject
Arbitration - Dispute Resolution
Headnote
(B) Arbitration clause - Contractual terms dictate that disputes must be resolved as stipulated and allow for arbitration unless clearly non-arbitrable - Court affirmed prima facie review of arbitration agreement's validity at reference stage, with the arbitrator deciding on maintainability. (Paras 10, 16)
(C) Final decision - Petition allowed, claims referred to arbitrator for consideration of arbitrability before merits. (
Result: Claims Nos. 2 and 3 referred to arbitration)
| Table of Content |
|---|
| 1. request for arbitration based on contract disputes. (Para 1 , 2 , 4) |
| 2. claims presented for arbitration and exceptions outlined. (Para 3 , 5 , 6) |
| 3. legal grounds and precedents relevant to arbitration. (Para 7 , 8 , 10) |
| 4. contractor's responsibility for delays not final. (Para 11 , 12 , 14) |
| 5. court's limited review at arbitration reference stage. (Para 16 , 17 , 18) |
JUDGMENT
Sachin Datta, J. This is a petition filed by the petitioner under Section 11(6) (c) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as "the Act") seeking that the petitioner's Claim nos. 2 and 3, as preferred, be also referred for the arbitration, along with the other claims, which have already been referred to the arbitration on the basis of the arbitration clause contained in the contract entered into between the parties.
2. The background of the matter is that the petitioner was awarded a contract for "Construction of Married Accommodation for DSC and NCs (E) at AF Station, Hindan" vide agreement bearing no.142/EE/GCD/2015-2016. The stipulated period for completion of the said work was twelve months. The petitioner submits that it started execution of the work pursuant to the said agreement, but there was lapse on the part of the respondents on various counts such as providing/furnishing the requisite drawings, taking timely decision, providing hindrance free site, etc. As such, the work came to be completed beyond the scheduled date of completion. Consequently, certain disputes are stated to have arisen between the parties and certain claims were raised by the petitioner. A request for appointment of an arbitrator, under the relevant arbitration clause, is stated to have been made by the petitioner vide communication dated 04.06.2021 wherein it was requested as under:
"This has a reference to above mentioned letter of the Chairman, DRC in the said matter wherein decision of the DRC has been conveyed. Copy of said decision is enclosed for your kind reference. The DRC has held its meeting on 05.02.2021. We feel totally dissatisfied with the decision of DRC.
Under the above circumstances, we have no other choice then to request your goodself for invoking arbitration clause 25 of the said agreement. Therefore, we request your good self for appointment of sole arbitrator for entering into reference and to adjudicate upon the matter/dispute in terms of clause 25 of the agreement. Duly filled in "Appendix XV" is enclosed herewith for reference and further action in the matter. We also hereby reserve right to amend, add or delete our claims as and when warranted. We assure our best cooperation at all time."
3. The claims that were sought to be referred to the arbitration vide the above communication, were as under:
"
| S.No. | Amount of claim | Brief description of claim |
| Claim No. 1 | Rs.21,47,903/- | Matter formed over a claim of sum of Rs.21,47,903/- due to unpaid interest under provision of clause 9 of the contract for delay in payment of Bill and belated release of withheld amount. |
| Claim No. 2 | Declaratory award | Matter formed over issue of breach of contract committed by authority, so the action of determination of extension of time under clause of the contract is arbitrary & unlawful and action taken under clause 2 of contract is contractually invalid. |
| Claim No. 3 | Rs.18,89,789/- | Matter formed over a sum of Rs.18,89,289/- towards refund of the amount on account of contractually invalid action and illegally recovered under clause 2 of the agreement. |
| Claim No. 4 | Rs.43,36,870/- | Matter formed over a sum of Rs.43,36,870/- on account of loss of profit and overhead due to prolongation of contract caused by the department. |
| Claim No. 5 | Rs.4,52,906/- | Matter formed over a sum of Rs.4,52,906/- for losses suffered on account of increase in rates due to prolongation of contract. |
| Claim No. 6 | To be calculated | Matter formed over applicability of GST on payments received after coming in to force of GST. |
| Claim No. 7 | To be calculated | Matter formed over compensation |
