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IN THE HIGH COURT OF DELHI
V. Kameswar Rao, J.
Garg Builders - Appellant
Versus
Hindustan Prefab Ltd. - Respondent
Arb.P. 47 of 2020, I.A. 10320 of 2021, Arb.P. 473 of 2021, Arb.P. 518 of 2021 and Arb.P. 606 of 2021
Decided On : 10-10-2022
| Table of Content |
|---|
| 1. seeking appointment of an arbitrator (Para 1 , 2 , 3) |
| 2. objections regarding proper parties and arbitration process (Para 4 , 5 , 6) |
| 3. submission on contract clauses and arbitration requirements (Para 7 , 9 , 10) |
| 4. interpretation of arbitration clauses and requirements to follow procedures (Para 11 , 16) |
| 5. conclusion on petitions and specified remedies available (Para 20 , 21 , 22) |
ORDER
V. Kameswar Rao, J.
1. All these petitions have been filed seeking appointment of an Arbitrator.
2. There is no dispute that the respondent had carried out the work on behalf of ESIC (item Nos.3, 4 & 6) / NDRF (item No.5). Certain claims have been raised by the petitioner, which have been declined by the respondent/HPL herein.
3. An objection has been taken by the respondent/HPL, inasmuch as the petitioner has not made ESIC / NDRF for whom the work was carried out as a party respondent. On that objection, I had issued notice to ESIC / NDRF and they are being represented through Mr. Shlok Chandra, Standing Counsel and Mr. Ripu Daman Bhardwaj, CGSC, respectively. In fact, Mr. Malhotra, learned counsel for the petitioner had also stated, he has no objection for impleadment of ESIC / NDRF as party respondent before the Arbitral Tribunal, if so constituted.
4. Today, Mr. Shlok Chandra, Advocate and Mr. Ripu Daman Bhardwaj, CGSC appears for ESIC / NDRF and contested the plea that has been urged by the respondent/HPL stating that the petitioner and the HPL inter-se are governed by the Contract, which stipulates an arbitration agreement and ESIC/NDRF cannot be made a party respondents before the Arbitral Tribunal. Learned counsels also state that even otherwise, such a submission need to be made before the Arbitral Tribunal, if so constituted.
5. An objection is taken by learned counsel appearing for respondent/HPL that the contract contemplates General Conditions of Contract (`GCC', for short) and Special Conditions of Contract (`SCC', for short) and the procedure contemplated therein has not been followed by the petitioner before filing the present petitions seeking appointment of an Arbitrator. In this regard, my attention has been drawn to Clause 26 (item Nos. 3, 4 and 6) and Clause 27 of GCC (item No.5), which I reproduce as under:-
"Clause 26: Settlement of Disputes and Arbitration:
Any or all Disputes, differences, or questions which may at any time arise between the parties hereto or any person claiming under them, touching or arising out of or in respect of this agreement or subject matter thereof shall first be endeavored to be amicably resolved at the top management level of the parties. However, in event of such dispute, difference or question etc. remaining unsolved, the same shall be referred to the arbitration by Sole Arbitrator to be nominated by The Chairman And Managing Director of Hindustan Prefab Limited, and provisions of the Arbitration and conciliation Act, 1996 shall be applicable. The place of such arbitration shall be at New Delhi."
"27. Settlement of Disputes and Arbitration.
Except where otherwise provided in the contract, all questions and disputes relating to the meaning of the specification, design, drawings, and instruction here-in above before mentioned as to the quality of workmanship of materials used on the work or as to any other question, claim, right, matter or thing whatsoever in any way arising out of or relating to the contract, designs, drawings, specifications, estimates, instructions, orders or these conditions or otherwise concerning the works or the execution or failure to execute the same whether arising during the progress of the work or after the cancellation, termination, completion or abandonment thereof shall be dealt with as mentioned hereinafter.
i) If the contractor considers any work demanded of him to be outside the requirements of the contract, or disputes any drawings, record or decision given in writing by the Engineer-in Charge or any matter in connection with or
The court emphasized the necessity of adhering to procedural requirements in contracts before arbitration can be invoked, underscoring the importance of a harmonized interpretation of contract clause....
Prima facie arbitration agreement via GCC clauses 24-25; termination disputes arbitrable sans appointed DRE or applicable pre-steps; court appoints arbitrator under s.11 despite departmental remedies....
The court determined an arbitrator's jurisdiction depends on claims being notified by the General Manager; failure to do so limits arbitration eligibility.
An arbitration agreement remains valid and enforceable despite procedural limitations on arbitrator appointment, ensuring disputes are addressed effectively.
Arbitration agreements remain valid despite invalid appointment procedures; courts may sever non-compliant clauses while upholding fundamental consent to arbitrate.
A court can appoint an arbitrator when a party fails to do so despite repeated requests and after exhausting all pre-arbitration mechanisms.
The main legal point established in the judgment is the importance of party autonomy in arbitration, the enforceability of the entire arbitration clause, and the conditional acceptance of arbitration....
(1) Arbitration – Parties to arbitration agreement have autonomy to decide not only on procedural law to be followed but also substantive law – A party cannot claim anything more than what is covered....
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