Point of Law : Arbitration - Respondent Corporation is a “public undertaking” as contemplated in Clause (i) of Section 2(1)(i) and the contract entered into between the parties was a “works contract” as contemplated in Section 2(1)(k) of the said Act of 1992, and hence Section 8 of the said Act would come into play, which mandates the parties to refer the disputes arising between them to the Tribunal constituted under the Act for arbitration, within one year from the date when the dispute arises.

JUDGMENT :

1. The Arbitration Petition has been filed by the petitioner M/s. SMS Infrastructure Limited, a Company incorporated under the Companies Act, through its Power-of-Attorney Holder, seeking to appoint an Arbitrator to resolve the disputes between the parties as per the provisions contained under Section 11 (6) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as “the said Act”).

2. The short facts giving rise to the present petition are that the respondent Gujarat State Road Development Corporation, Gandhinagar had invited the tenders by issuing a public notice for the work of widening and strengthening the Sarkhej Dholka – Vataman – Pipli – Dholera Bhavnagar Road. The offer of the petitioner being the lowest one was accepted by the respondent on 29.12.2010 and an Agreement No.B2/12 of 201112 was executed between the parties. Clause30 of the terms and conditions of the contract annexed to the said agreement, pertained to referring the disputes to the Arbitration Tribunal, which reads as under:

“CLAUSE 30 : (1) Disputes to be referred to Tribunal:

The disputes relating to this contract, so far as they relate to any of the following matters, Whether such disputes arise during the progress of the work or after the completion or abandonment thereof, shall be referred to the Arbitration Tribunal, Gujarat State.

(i) The rates of payment under clause 5 for any tools, materials and stores, in or upon the works of the site thereof or belonging to the contractor or procured by him an intended to be used for execution of the work or any part thereof possession of which may have been taken by the Engineer-in-charge under the said clause-S.

(ii) The Reduction in rates made by the Engineer-in-Charge under clause 9 from the items of works not accepted as completed fully in accordance with the sanctioned specifications.

(iii) The rate of payment for any class of work which is included in the additional or altered work carried out by the contractor in accordance with the instructions of the Engineer-in-Charge under clause 14 and the rates for which is to be determined under the said clause 14.

(iv) The rates of payment for materials already purchased or agreed to be purchased by the contractor before receipt of notice given by the Engineer-in-Charge under clause 15, and/or the amount of compensation payable to the contractor under the said clause for loss in respect of such materials.

(v) The amount of compensation which the contractor shall be liable to pay under clause 17 in the event of his failure to rectify, remove or reconstruct the work within the period specified in the written intimation or the amount of expenses incurred by the Engineer-in-Charge under the said clause 17 in rectifying, removing or re-executing the work or in removing and replacing the materials or articles complained of.

(vi) The reduction of rates as may be fixed by the Engineer-in-Charge under clause 17 for the inferior work or materials as accepted or made use of.

(vii) The amount of compensation payable by the contractor for damages as estimated and assessed under clause 23.

(viii) The amount payable to the contractor for the work carried out under clause 33 in accordance with the instructions and the requirements of the Engineer-in-Charge in a case where there are no specifications.

(2) The provision of Section21 of the GPWD dispute Arbi. Tribunal Act 92 & order issued by the Govt. in connection with this Act will now apply for Arbitration (As per Government in N, & W.R.D. letter No.SUT/1090/2679/K2 dtd. 9/2/94.

(3) The provision of Arbitration Act, shall in so far as they are inconsistent with the provision of this act cease of to apply to any dispute arising from a works contract and all arbitration proceedings in relation to such dispute before an arbitrator, court of authority shall stand transferred to the Tribunal.

(4) The awards declared by the arbitrator should be speaking award, giving reasons and calculations for every item of claims. Th