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IN THE HIGH COURT OF GAUHATI, NAGALAND, MIZORAM AND ARUNACHAL PRADESH
N. Kotiswar Singh, J.
M/s. G.S.R. Ventures Private Limited, Represented by its Authorized Signatory K. Mohammed Rafi, S/o. K.C. Imam Saheb - Petitioner
Versus
The Union Of India, Represented By The General Manager, N.F. Railway, Guwahati - Respondents
Arb.P. No.20 Of 2021, Arb.P. No.22 Of 2021, Arb.P. No.28 Of 2021
Decided On : 18-11-2022
Arbitration and Conciliation Act, 1996 – Sections 8, 11, 34 – Appointment of arbitrators – Application for setting aside arbitral award – Power to refer parties to arbitration – Learned counsel appearing for petitioner – Learned Senior Counsel assisted by petitioner Standing Counsel, N.F. Railway appearing for respondents learned Standing Counsel N.F. Railway appearing for respondent – Held, Court at referral stage is norm in spite of power of Court to decide on arbitrability – Case of Indian Oil Corporation which respondent authorities relied Supreme Court emphasized that Court can decide on arbitrability only if facts are very clear and glaring – Case discussed facts are not clear and glaring as to warrant intervention by this Court at this referral stage – Claims can be split to decide arbitrability as contended by petitioners in all these petitions is a contentious issue which – Court should be left to be decided by Arbitrator – Plea taken by contractor petitioner that claims can be individually considered and split and not necessarily clubbed very plausible interpretation of contract which can be best considered by Arbitral Tribunal – Petitions stand disposed of.
JUDGMENT :
1. Heard Ms. S. Bhattacharjee, learned counsel appearing for the petitioner in Arb.P. Nos. 20/2021 & 22/2021 as well as Mr. U.K. Nair, learned Senior Counsel assisted by Mr. D. Deka, learned counsel for the petitioner in Arb.P. No. 28/2021. Also heard Mr. S. Chakraborty, learned Standing Counsel, N.F. Railway appearing for the respondents in Arb.P. Nos. 20/2021 & 22/2021 and Mr. G. Goswami, learned Standing Counsel, N.F. Railway appearing for the respondents in Arb.P. No.28/2021.
2. These three Arbitration Petitions, namely, Arb.P.Nos.20/2021, 22/2021 & 28/2021 are taken up together since similar legal issues have been raised in these petitions. Accordingly, these three petitions are heard together and disposed of by this common judgment and order. The petitioners in Arb.P. Nos.20/2021 and 22/2021 are same i.e. M/S GSR Ventures Private Limited though in Arb.P.28/2021 the petitioner is different i.e. Gammon Engineers and Contractors Pvt. Ltd.
3. Arb.P.Nos.20/2021 and 22/2021 have been filed under Section 11 of the Arbitration and Conciliation Act, 1996 for appointment of a Sole Arbitrator to adjudicate the disputes between the parties arising out of two sets of Agreements involving the N.F. Railways primarily relating to earthwork filling to form embankment/sub-bank and construction of minor bridges, retaining wall, pucca approach road, alignment and other ancillary works in connection with construction of new BG Railway line from Bairabi to Sairang (Mizoram) under Contract Agreement bearing No. CON/B-S/1917 dated 02.03.2015 and Contract Agreement No. CON/B-S/2079 dated 24.11.2015.
Arb.P.28/2021 has been also filed under Section 11 of the Arbitration and Conciliation Act, 1996 for appointment of an Arbitrator to adjudicate upon the dispute arising out of alleged non-payment of final bill dated 21.06.2017 as per Contract Agreement dated 30.05.2008 for construction of Well–Foundation and Sub-structure of Bogibeel Rail-cum-Road Bridge across Brahmaputra River near Dibrugarh.
Arb.P.20/2021 and Arb.P.22/2021
4. The case of the petitioner in both the petitions, Arb.P.Nos.20/2021 and 22/2021 in brief is that though the petitioner had started executing the work, because of various reasons and also due to non-cooperation from the Railway authorities specially during the Covid-19 pandemic, delay had occurred and accordingly, the petitioner was compelled to terminate the contract by issuing the letter dated 14.07.2020 by invoking force majeure clause in respect of both the contracts.
5. The decision of the petitioner to terminate the contract by issuing the letter dated 14.07.2020 was disputed by the respondents vide letter dated 23.07.2020 and 15.09.2020 and accordingly, the petitioner vide letter dated 19.08.2020 raised the demand for arbitration by invoking Clause 64(1)(i) of the General Conditions of the Contract. However, the said act of the petitioner in invoking the Arbitration Clause was resisted by the Railway authorities contending, inter alia, that the claims of the petitioner exceed 20% of the value of the contract by referring to Clause 47 of the Contract Agreement which reads as follows,
As such, it was the stand of the Railway authorities that the claim of the petitioner cannot be resolved by arbitration.
6. In view of the above stand taken by the Railway authorities that the dispute is non-arbitrable based on Clause 47 of the Contract Agreement, the Railway authorities did not take any step for appointment of an Arbitrator to
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