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2022 Supreme(Gau) 539
IN THE GAUHATI HIGH COURT (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)
N. KOTISWAR SINGH, J.
M/S Nondochand Naiding, Rep. By Its Constituted Attorney Sri Reejeet Nunisa – Appellant
Versus
The Additional Chief Engineer And Anr – Respondents
Arb.P. 37 of 2021
Decided on : 08-08-2022
Advocate Appeared:
For the Appellant :Mr. B. Pathak, Mr. R. Thadani, Mr. V. Kumar, Advocate.
For the Respondents: Mr. R.M. Das, adv
Point of Law: If there is an alternative forum for settlement of dispute, same should be first resorted too.
Headnote:
Arbitration and Conciliation Act, 1996 - Section 11(6) and 12 – Arbitration - Appointment of an Arbitrator - Petition has been filed under Section 11(6) of Arbitration and Conciliation Act, 1996 for appointment of an Arbitrator on ground that after dispute has arisen between petitioner and NCHAC authorities, in terms of Arbitration Clause 20.1 of Special Conditions of Contract (SCC), matter is to be referred to Arbitrator in accordance with Arbitration and Conciliation Act, 1996 - Contract was terminated by Executive Engineer, and normally, it would have been required to be referred for Dispute Resolution under Clause 24.1 of General Conditions of Contract. (Para 12)
Findings of the Court :
Court is of view that even if contract was terminated by Executive Engineer, but since he did not have any authority, and it could have been terminated only by Additional Chief Engineer, dispute could not be resolved by resorting to Clause 24.1. Since competency of the Executive Engineer to terminate the contract has been also challenged and there is a specific Clause in the Arbitration Agreement that “Employer” is “Additional Chief Engineer, PWD (R &B) Hills, Assam, Haflong”, who could terminate the contract as provided under the General Conditions of Contract, this Court is of prima facie view that the said Clause 24.1 as urged upon by learned Standing Counsel, NCHAC appearing for the respondent will not be applicable.
Result: Petition disposed of.
JUDGMENT :
Heard Mr. B. Pathak, learned counsel for the petitioner. Also heard Mr. R.M. Das, learned Standing Counsel, North Cachar Hills Autonomous Council (NCHAC) appearing for the respondents.
2. The present petition has been filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 for appointment of an Arbitrator on the ground that after the dispute has arisen between the petitioner and the NCHAC authorities, in terms of the Arbitration Clause 20.1 of the Special Conditions of Contract (SCC), the matter is to be referred to the Arbitrator in accordance with the Arbitration and Conciliation Act, 1996.
3. Mr. R.M. Das, learned Standing Counsel, NCHAC, however, submits that the dispute arose out of termination of the contract by the Executive Engineer and there is a specific provision under Clause 24.1 of the General Conditions of Contract (G.C.C.) of the Agreement to the effect that if the contractor is of the view that the decision taken by the Engineer was wrong, the said decision could be referred to the Dispute Review Board, and as such, there is an Alternative Dispute Resolution Mechanism already in place under the said Agreement and as such, before the said Arbitration Clause is evoked, the petitioner ought to have evoked the Dispute Resolution Clause as provided under Clause 24.1 of the General Conditions of Contract and as such, the present petition is not maintainable.
4. In support of his submission that if there is an existence of an Alternative Resolution Mechanism or forum available, as provided in the Agreement, the same must be first resorted to, Mr. Das, learned Standing Counsel, NCHAC has relied upon the decision of this Court rendered in Bharat Hydro Power Corporation Ltd. and Anr. Vs. A.S.E.B. and Anr., reported in 1999(2) GLT 86 wherein it was held that if there is an alternative forum for settlement of dispute, the same should be first resorted too.
5. Mr. Das, learned Standing Counsel, NCHAC has also referred to the decision rendered by the Hon’ble Supreme Court in M.K. Shah Engineers and Constructions Vs. the State of M.P., (1999) 2 SCC 594 to the same effect.
6. It has been, accordingly, submitted by learned Standing Counsel, NCHAC that the petitioner should first invoke the said Dispute Resolution Mechanism as provided under Clause 24.1 of the General Conditions of Contract before invoking the Arbitration Clause.
7. Mr. B. Pathak, learned counsel for the petitioner, on the other hand, submits that the said Clause 24.1 of the General Conditions of Contract is applicable when the decision is taken by the Executive Engineer. He further submits that though in the present case, the termination of the contract was by an order issued by the Executive Engineer, the Executive Engineer had no such authority to terminate the contract inasmuch as only the “Employer” can terminate the contract as provided under Clause 59.1 of the General Conditions of the Contract, and who is the “Employer” has been also defined under the aforesaid Agreement as the “Additional Chief Engineer, PWD (R&B) Hills, Assam, Haflong.
8. Under the circumstances, learned the Executive Engineer did not have any jurisdiction or authority to terminate the contract. Only the Additional Chief Engineer, being the employer, could terminate the contract as provided under Clause 59.1 of the General Conditions of Contract.
9. Under the circumstances, this itself is also an issue which is required to be considered by the Arbitrator.
10. Having heard the learned counsel for the parties, this Court would now concur with the submission advanced by the learned counsel for the petitioner for the following reasons.
11. Though there is a Dispute Resolution Mechanism provided under Clause 24.1 of the General Conditions of Contract, the said Clause will be applicable only when the decision taken by the Executive Engineer which is considered to be wrong by the contractor.
12. In the present case, the contract was terminated by the Executive Engineer, and nor
