IN THE HIGH COURT OF DELHI
Navin Chawla, J.
Thermal Engineers and Insulators Pvt. Ltd. - Appellant
Versus
Delhi Tourism and Transportation Development Corporation Ltd. - Respondent
Arb.P. 1016 of 2022
Decided On : 15-12-2022
| Table of Content |
|---|
| 1. petition filed for arbitration appointment due to payment dispute. (Para 1 , 2 , 3 , 4) |
| 2. arguments concerning maintainability of the arbitration petition. (Para 6) |
| 3. court's observations on arbitration agreement validity. (Para 7 , 8 , 9 , 10 , 11) |
| 4. no impediments in appointing an arbitrator. (Para 12 , 16) |
| 5. court's order appointing arbitrator and clarifications. (Para 13 , 14 , 15 , 17) |
JUDGMENT
Navin Chawla, J. (Oral)
1. This petition has been filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 (in short, the `Act') seeking the appointment of an Arbitrator for adjudicating the disputes that have arisen between the parties in relation to the work of `Construction, Up-gradation and face lifting of Govt. Sarvodaya Co-ed Vidyalaya Sec- 9, Rohini (School ID: 1413010) at Rohini, New Delhi-110085'.
2. The Arbitration Agreement between the parties is contained in Clause 25(ii) of the General Conditions of Contract (in short, `GCC').
3. Disputes having arisen between the parties with regard to the alleged payment due to the petitioner for the above work, the petitioner filed a petition under Section 11 (6) of the Act being ARB. P. No.1097/2021, titled Thermal Engineers and Insulators Pvt. Ltd. v. Delhi Tourism and Transportation Development Corporation Ltd.. The same was disposed of by the order of this Court dated 28.02.2022 observing that in terms of Clause 25(i) of the GCC, the petitioner was to first file an appeal before the Chief Engineer; and failing any decision thereon, the petitioner had the remedy to a further appeal before the Dispute Resolution Committee (in short, `DRC'); and only thereafter, the remedy to file a petition under Section 11 of the Act would be available to the petitioner. The petition was, therefore, dismissed as being premature.
4. The petitioner thereafter filed an appeal before the Chief Engineer on 12.03.2022. Failing to get a response thereto, the petitioner requested for the constitution of a DRC, vide letter dated 02.05.2022. As even this request was not responded to, the petitioner invoked the Arbitration Agreement vide notice dated 14.06.2022 and thereafter, filed the present petition. 5. The learned counsel for the respondent opposes the maintainability of the present petition on the ground that the petitioner has executed an undertaking whereby it has received a sum of Rs.61,23,683/- (Rupees Sixty-One Lakh Twenty- Three Thousand Six Hundred Eighty-Three only) towards the `full and final bill payment' of the subject-work. He submits that in view of the said document, the Arbitration Agreement contained in the original work contracts stood discharged. In support, he places reliance on the judgment of the Supreme Court in Indian Oil Corporation v. NCC Limited, 2022 SCC OnLine SC 896.
6. On the other hand, the learned counsel for the petitioner submits that the said alleged undertaking was obtained by the respondent by withholding the payment of the running account bills of the petitioner. The same therefore, cannot be relied upon. He submits that, in any case, this will be a dispute to be adjudicated by the Arbitrator.
7. I have considered the submissions made by the learned counsels for the parties.
8. In Vidya Drolia v. Durga Trading Corporation (2021) 2 SCC 1, the Supreme Court has held that the Court at the stage of exercise of powers under Section 11 of the Act is only to prima facie consider the existence of the Arbitration Agreement; it cannot enter into a detailed adjudication of the claims and counter-claims made by the parties on that issue. Such issues are to be necessarily left for the Arbitral Tribunal to determine.
9. The same was reiterated by the Supreme Court in Indian Oil Corporation (supra) observing as under:
"89....Therefore, even when it is observed and held that such an aspect with regard to `accord and satisfaction' of the claims may/can be considered by the Court at the stage of deciding Section 11 application, i
The appointment of an Arbitrator under Section 11(6) requires prima facie consideration of the Arbitration Agreement's existence, not an in-depth examination of disputes, which should be resolved by ....
The court upheld the validity of the arbitration agreement and recognized the petitioner’s adherence to the procedural requirements for arbitration, irrespective of the respondent's claims regarding ....
The court ruled that jurisdiction under Section 11(6A) is limited to assessing the existence and validity of arbitration agreements, with unresolved factual disputes requiring arbitration.
The main legal point established is that for a dispute to be referred to an arbitrator under Section 11(6) of the Arbitration Act, it must arise from the agreement and be arbitrable in nature.
The main legal point established is that the fulfillment of agreed procedures, such as conciliation as a condition precedent, is necessary before invoking the arbitration clause. The Court emphasized....
As per Section 11 (13) of the Act now arbitration is required to be decided within 30 days.
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