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IN THE HIGH COURT OF GAUHATI
R.S. MONGIA, J.
SPM Engineers Ltd. – Appellant
Vs.
Guwahati Municipal Corporation – Respondent
Arbitration Petition Nos. 17, 18 and 19 of 2001
Decided On: 26.03.2003
Arbitration - Dispute Resolution - Arbitration and Conciliation Act, 1996 - Clause 26, Clause 30, Clause D-6.21
Fact of the Case:
The applicants entered into agreements with the Guwahati Municipal Corporation for water supply scheme works. Disputes arose, and the applicants invoked the arbitration clause. The respondent argued that the clauses did not amount to arbitration clauses. The court considered relevant case law and held that the clauses constituted arbitration clauses.
Finding of the Court:
The court found that the named arbitrator failed to enter upon the reference and act as an arbitrator within 30 days of the receipt of the notices dated 10.9.2001. Consequently, the court proceeded to appoint an arbitrator under Section 11(6)(c) of the Act.
Issues: Interpretation of clauses as arbitration clauses, Failure of named arbitrator to act within stipulated time
Ratio Decidendi: The intention of the parties to have disputes decided by a particular person after holding a judicial enquiry constitutes an arbitration clause, irrespective of the use of specific terms like 'arbitrator' or 'arbitration'. Failure of the named arbitrator to act within the stipulated time warrants the court's appointment of an arbitrator.
Final Decision: The court appointed Mr. N.C. Deka as the arbitrator to decide the disputes in accordance with the provisions of the Arbitration and Conciliation Act, 1996.
R.S.Mongia, C.J.
1. Heard Mr. P.C. Markanda, learned counsel for the applicants and Mr. H. Sarma, learned counsel appearing for the respondent.
2. This order of mine will dispose of Arbitration Petitions Nos. 17/2001, 18/2001 and 19/2001. In Arbitration Petition No. 17/2001, SPM Engineers Ltd. is the applicant, whereas International Construction Ltd., is the applicant in Arbitration Petition No. 18/2001 and Zoom International Services Ltd. is the petitioner in Arbitration Petition No. 19/2001. In all these cases, Guwahati Municipal Corporation (in short, the GMC) is the respondent.
3. In all these cases, agreements were entered into between the parties for carrying out the works regarding the water supply scheme. Both the contracts in Arbitration Petition No. 17/2001 and Arbitration Petition No. 19/2001 contained the following clauses, which are numbered as Clause 26 and Clause 30, respectively. The same are reproduced as under :
"Decision of the Commissioner to be final. - Clause 26. Except where otherwise specified in the contract the decision of the Commissioner of the Corporation for the time being shall be final conclusive and binding on all parties to the contract upon all question relating to the meaning of the specification design, drawings and instructions hereinbefore mentioned and as to the quality of workmanship or 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 contract design, 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 completion or abandonment thereof."
"Definition of work. - Clause 30. The expression 'work' or 'works' where used in these conditions shall unless there be something either in the subject or context repugnant to such constructions be constructed and taken to mean the works by or by virtue of the contract constructed to be executed whether temporary or permanent and whether original altered substituted or additional, In case of any dispute arising out of this agreement, the same will be decided by the Commissioner and the decision will be final and conclusive."
The contract in Arbitration Petition No. 18/2001 contained the following clause, which is numbered as clause D-6.21, which is as under :
"D-6.21. Decision of the Commissioner, Guwahati Municipal Corporation to be final.
Provided always thus in case any question, dispute or difference shall arise between the Engineer-in-charge and the contractor as to what additions, if any, or infairness to be made to the amount of the contract by reason of the works being delayed for no fault of the contractor, or by reason of an account of any directions or regulations of the Engineer-in-charge involving increased cost to the contractor beyond the cost properly attending in carrying out of the contract according to the true intent and meaning of the signed drawings and specification or as to the works having been duly completed, or as to the construction of these presents or as to the work or as to any other matter or thing arising under or out of this contract except as to matter left during the progress of the work to the sole decision or requisition of the Engineer-in-charge under Clause D-6.2, D-6.8 and D-6,9 in case the Contractor shall be dissatisfied with any certificate of the Engineer-in-charge shall withhold or not give any certificate, to which the contractor may be entitled, then such question, dispute or difference or such certificate of the value or matter which should be certified as the case may be is to be from time to time referred to the Commissioner, Guwahati Municipal Corporation whose decision shall be final, conclusive and binding on the contractor."
4. It is the case of the applicants that some disputes having arisen which could not be amicably settled between the parties
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