IMPORTANT POINT
The Court emphasized the importance of examining the existence and validity of an arbitration agreement at the referral stage and the rejection of manifestly non-arbitrable claims.

JUDGMENT :

1. Heard Mr. R. Hussain, learned counsel for the petitioner. Also heard Mr. H. Gupta, learned CGC appearing for all the respondents.

2. The present application under Section 11(6) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as “the 1996 Act”), is for a reference of the dispute between the parties before a sole Arbitrator to be appointed by this Court. The petitioner’s case is that the respondent no.4 had floated Tender No.CE/A-S/DDC/2017/03 for the works of Detailed Design and Construction Supervision for one Tunnel & Cut and cover by ADECO-Rs method from Ch. Km 83/378.00 to ch. KM 84/128.00 total length of 750 mtr. (approx.) in connection with the construction of New BG Railway Line Project from Agartala to Sabroom.

3. The petitioner was selected for the contract work and accordingly, a contract agreement dated 25.01.2018 was executed between the parties at a total cost of Rs.4,77,82,093.90/-. The time for completion of the contract work was 18.03.2018. The petitioner’s further case is that he successfully completed the contract work after being granted various extensions by the respondents. The dispute arose between the parties, as settlement and finalisation of the Final Bill of the petitioner was not being made by the respondents. The petitioner thereafter lodged a claim for doing extra work amounting to Rs. 3,47,53,900/-. Thereafter, vide letter dated 19.08.2019, he made another claim for Rs. 3,18,43,396/-for doing extra work. The petitioner submitted his final claim on 27.03.2023 for Rs.5,75,26,166.96. However, the same has not been paid to the petitioner.

4. The petitioner’s counsel submits that as per the contract agreement dated 25.01.2018 executed between the parties, an Arbitration Clause for settlement of disputes through arbitration is present in Clause No. 10.0 of the agreement, which incorporates the relevant Clause 63 & 64 of the General Conditions of Contract (GCC). Clause 63 & 64 of the GCC provides that the disputes between the parties, arising out of the contract, should be decided by way of Arbitration. The petitioner’s counsel submits that though the petitioner has invoked the Arbitration Clause by issuing notice, the respondents have failed to act on the application made by the petitioner, while disputing the claim of the petitioner. The petitioner has thus approached this Court for appointment of an Arbitrator.

5. The petitioner’s counsel submits that Clause 10.1 of the contract agreement, which provides that claims or disputes beyond 20% of the contract value will not attract Clause 63 & 64 of the GCC, is a void clause. He submits that Sub-Section 6A of Section 11 of the 1996 Act provides that the Supreme Court or the High Court, while considering any application under Section 11(6A) of the 1996 Act, would have to confine it’s examination with regard to whether an Arbitrator is to be appointed, only by considering whether an Arbitration Clause existed in the contract agreement. He submits that the issue whether the Arbitrator could or could not decide the claims made by the petitioner in terms of Clause 10.1 of the contract agreement, including the validity of Clause 10.1 of the contract agreement, would have to be decided by the Arbitrator, so appointed by the Court, in terms of Section 16 of the 1996 Act. In this regard he has relied upon the Constitution Bench judgment of the Supreme Court in the case of Re-Interplay between Arbitration Agreements under the Arbitration and Conciliation Act, 1996 and the Indian Stamp Act, 1899 (supra). The petitioner’s counsel thus submits that this Court should appoint an Arbitrator in terms of Section 11(6A) of the 1996 Act.

6. Mr. H. Gupta, learned CGC for the respondents submits that in terms of Clause 10.1 of the contract agreement, which has to be read along with Clause 10.0, which incorporates Clause 63 & 64 of the General Conditions of Contract (GCC), shows that the provisions of Clause 63 & 64 of the GCC would be applicable on