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2016 Supreme(Guj) 729
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
Akil Abdul Hamid Kureshi, J.
Gray Parikh Architects Private Limited – Appellant
Vs.
Gujarat National Law University – Respondents
Petn. Under Arbitration Act No. 10 of 2016
Decided On : 22-04-2016
Advocate Appeared:
For the Appellant :Shalin Mehta, Sr. Advocate, Tanvish Bhatt, Jay Kansaraand Rahul Dev for Wadiaghandy & Co., Advocate
For the Respondents:Dharmishta Raval, Advocate
The main legal point established in the judgment is that the petitioner had the right to seek appointment of an arbitrator under Section 11(6)(c) of the Arbitration and Conciliation Act, 1996, despite the Council of Architecture declining arbitration.
Headnote:
Arbitration - Architectural Services - Architects Act, 1972, Arbitration and Conciliation Act, 1996 - Section 11(6) - Council of Architecture declined arbitration citing professional misconduct, agreement not as per norms, and lack of consent - Court held that in face of the arbitration agreement, petitioner had right to seek appointment of arbitrator under Section 11(6)(c) - Agreement dated 4.7.2012 did not prevent petitioner from seeking arbitration - Court found that the agreement did not completely rewrite or give up terms of original agreement - Court referred to relevant Supreme Court decisions to support its findings
Fact of the Case:
The petitioner, an architectural and interior designing company, entered into an agreement with the respondent, Gujarat National Law University (GNLU), for rendering services. Disputes arose regarding payments, leading to the petitioner seeking appointment of an arbitrator after the Council of Architecture declined arbitration.
Finding of the Court:
The Court found that the petitioner had the right to seek appointment of an arbitrator under Section 11(6)(c) of the Arbitration and Conciliation Act, 1996, despite the Council of Architecture declining arbitration. The Court also held that the agreement dated 4.7.2012 did not prevent the petitioner from seeking arbitration and did not completely rewrite or give up the terms of the original agreement.
Issues: The issues involved the petitioner's right to seek appointment of an arbitrator after the Council of Architecture declined arbitration, and the impact of the agreement dated 4.7.2012 on the petitioner's arbitration rights.
Ratio Decidendi: The Court's decision was based on the interpretation of Section 11(6)(c) of the Arbitration and Conciliation Act, 1996, and the finding that the agreement dated 4.7.2012 did not completely rewrite or give up the terms of the original agreement.
Final Decision: The Court directed the parties to present the declaration of a retired judge by the next date of hearing.
Akil Abdul Hamid Kureshi, J.
1. The petitioner is a private limited company rendering services of architectural and interior designing. The petitioner was engaged by the respondent Gujarat National Law University ("GNLU" for short) for rendering such services under an agreement dated 13.5.2008. This agreement contained arbitration clause in the following terms:
"All disputes or differences which may arise between the client and the architect under "Conditions of Engagement and Scale of Charges" with regard to the meaning or interpretation or matter or things done or to be done in pursuance hereof, such disputes and differences shall be referred for arbitration of the Council of Architecture. The decision and award of the arbitrator shall be final and binding on the Architect and the client.
This letter of appointment together with Conditions of Engagement and Scale of Charges of Council of Architecture, as appended herewith shall govern the agreement. This letter is being sent in duplicate. One copy may please be signed in token of your acceptance and returned to us."
2. Case of the petitioner is that the petitioner had rendered such services to the respondent as per the agreement, however, full payments were not made. Relations between the parties sored and several disputes surfaced. It appears that at one stage, both the sides decided to resolve the issues amicably. An agreement was signed by both the sides on 4.7.2012, copy of which is produced by respondent at Annexure-R-1 (page-62). The said agreement contained following terms:
"2. We agree to short close the contracts for comprehensive Architectural Services (dated 13/05/2008) and for interior designing (dated 01/06/2010) entered into between us. GNLU shall not copy, use, exploit or in any other manner deal with GPA drawings and/or designs either in part or full for GNLU campus situated at Koba or any other site or project.
3. GNLU will pay Rs. 51 lakh as full and final payments towards all contract, expectation, commitment between GNLU and the GPA.
GNLU will pay the first installment of 66.67% of the payable amount (amounting Rs. 34 lakhs) within five working days from the date of signing of this agreement which is in full and final settlement of both the contracts referred above and is willingly agreed by both the parties that there are no further liabilities due on the part of any of the parties hereto towards any of the contracts, sub contracts, and assignments there under, absolving both the parties from all liabilities towards each other.
4. GNLU will pay the second installment of the 33.33% of the payable amount (amounting to Rs. 17 lakhs) within 15 working days of all the required mandatory detailed drawings, designs and any ancillary information that forms an integral part of the comprehensive architectural services for the campus development, including suggestions towards the rectification measures in form of drawings, designs, site visits and such other services, which the GNLU can expect legitimately from the GPA as part of the comprehensive architectural services covered and helping/guiding GNLU in solving lacunas/defects, if any.
5. Both the parties to this agreement willingly declare and agree that all the grievances and complaints, if any, in whatever form and before whatever forum, with reference to contracts referred to above will be deemed to have been put an end to and closed for all time to come.
6. GNLU will issue completion certificate for the works completed by GPA in the appropriate format upon making payment of the second installment."
3. It appears the said agreement did not resolve the disputes and the petitioner therefore, issued a notice to GNLU on 22.6.2015 and raised a demand of Rs. 4.03 crores (rounded off) on various grounds.
4. Case of the petitioner is that this agreement was never acted by GNLU. No payment, as promised, was made. The petitioner thereupon approached the Council of Architecture under letter dated 14.9.2015 requesting for
