The court confirmed the existence of an arbitration agreement and mandated the appointment of a sole arbitrator to adjudicate contract disputes, highlighting the necessity of complying with contractual dispute resolution mechanisms.

JUDGMENT :

SACHIN DATTA SACHIN DATTA, J.

1. The present petition filed under section 11(6) of the Arbitration and Conciliation Act, 1996 (hereinafter referred as ‘the A&C Act’) seeks appointment of a sole arbitrator to adjudicate the disputes between the parties.

2. The disputes between the parties have arisen in the context of a Letter of Acceptance (LoA) dated 16.03.2023 bearing No.EE/CD-XIII/Acs/2022- 23/83/6434, awarded to the petitioner for the works of ‘Maintenance of Mungleshpur Drain from RD 0m to 10362m 2711-Revenue’ at a contract price of Rs.16,90,716/-

3. As per the letter dated 27.03.2023, bearing No. EE/CDXIII/Acs/2022-23/83/6619, the stipulated date for commencement of the works was 31.03.2023 and completion was 26.09.2023. Further, in compliance of the LOA, the petitioner furnished performance guarantee in the prescribed form.

4. The respondent issued show cause notices bearing Nos. EE/CD-XIII/ Acs/2022-23/83/601 and EE/CD-XIII/Acs/2022-23/83/1368 dated 12.05.2023 and 06.06.2023 respectively inter alia on account of alleged slow progress of work and inadequate number of labour and machinery deployed by the petitioner at the project site. Pursuant thereto, the respondent vide letter dated 19.06.2023 determined the contract as well as forfeited the security deposit and performance guarantee furnished by the petitioner.

5. The dispute between the parties have arisen inter alia on account of the alleged illegal and unlawful determination of the contract, forfeiture of the performance guarantee and failure of the respondent to pay as well as cooperate to undertake joint survey/measurement for the final bill for the work executed by the petitioner prior to the determination of contract.

6. Disputes having arisen between the parties, the petitioner communicated its grievances/claims to the concerned authorities through various representations/demand notices. It is averred in the petition that the respondent despite responding to the said communications failed to take any concrete steps for resolution of the disputes/claims.

7. Since the dispute between the parties persisted, the petitioner as per clause 25 of the contract vide letter dated 03.03.2024 referred the disputes to Dispute Redressal Committee followed by a letter dated 29.03.2024 for invocation of arbitration. However, the respondent failed to respond.

8. In the above circumstances, the petitioner has approached this Court, through the present petition, seeking the appointment of a sole arbitrator to adjudicate the dispute.

9. Admittedly, the following arbitration clause contained in the General Contract Condition is applicable to the contract between the parties:-

“Clause 25: settlement of Disputes & Arbitration:

Except where otherwise provided in the contract, all questions and disputes relating to the meaning of the specifications, design, drawings and instructions here-in before mentioned and as to the quality of workmanship or material 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 d