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2010 Supreme(Ker) 426

High Court of Kerala
THE HONOURABLE MR. JUSTICE K.T. SANKARAN
M/S. Kaikkara Construction Company, Rep. by Its Managing Partner A. Abdul Salam
Versus
State Of Kerala, Represented By The Secretary to Government & Others
Arbitration Request No.39 of 2009
Decided on : 19-07-2010

Advocates Appeared:For the Petitioner:K. Babu Thomas, Advocate. For the Respondents: Government Pleader, T.P.M. Ibrahim Khan, Asst. S.G. Of Indi.

Headnote:

Arbitration and Conciliation Act, 1996 - Section 7 - Tenders were invited for construction of Railway Over bridge and accepted - Though the period for completion of the contract was 24 months, even then the work was not completed, which adds to the misery of the travelling public - Applicant prays for appointing an arbitrator for resolving the dispute mentioned in the Arbitration Request - The respondents contended that going by the terms of the contract, the dispute is not an arbitrable dispute - Held, There is no provision in the Standard Bidding Document or any other law prohibiting the State from stipulating a condition that arbitration shall not be a dispute resolution mechanism - Arbitration Request is dismissed.

Judgment :

1. The Arbitration Request relates to the dispute in respect of construction of Edappally Railway Over bridge between km. 436/380 and km. 438/350 of National Highway 47. Though the tenders were invited and accepted in 2005 and though the period for completion of the contract was 24 months, even now the work is not completed, which adds to the misery of the travelling public. The applicant prays for appointing an arbitrator for resolving the dispute mentioned in the Arbitration Request. The respondents contend that going by the terms of the contract, the dispute is not an arbitrable dispute.

2. On 27.1.2005, the applicant submitted tender, above 25.95% of the estimate rate based on 1999 PWD schedule of rates. The tender was accepted as per Annexure A1 letter of acceptance dated 21.7.2005. According to the applicant, the possession of the work site was handed over on 2.9.2005. The period for completion of the contract expired on 1.9.2007. According to the petitioner, he has done a major part of the work.

This is denied by the respondents. According to them, only 41% of the work was completed as on 22.12.2007, based on the original contract price. Based on the revised contract price, the progress achieved was only 30% as on 22.12.2007. According to the respondents, the work carried out from 22.12.2007 to 1.3.2009 was only 12% as against 70% target.

3. A supplemental agreement was executed between the parties. According to the applicant, a sum of Rs.1,18,87,265/-payable to him was withheld by the opposite parties and as a condition for releasing the amount, he was compelled to execute the supplemental agreements. The applicant sought extension of the period for completion of the work. It is stated by the learned counsel for the applicant that extension was granted up to 1.3.2009. On 7.3.2009, the applicant requested for appointment of a Dispute Review Expert as stipulated in Clause 24 of the General Conditions of Contract. On 9.5.2009, the applicant again made a request for appointment of Dispute Review Expert and also for extension of the "intended completion period". In the letter dated 10.6.2009 issued by the applicant to the Chairman of the Council of Indian Roads Congress, it was stated thus:

"In the letter of acceptance of the tender issued on 21.7.2005. Dispute Review Expert is not appointed. We have repeatedly requested from 9.10.2008 onwards to the Superintending Engineer, to supply panel of Engineers to select one of them for joint appointment of Dispute Review Expert, but there is no response and the contract is illegally terminated on 28.5.2009, without allowing extension of intended completion period sought by us in lieu of 375 days of suspension of the works caused and the time required for carrying out the extra items and variation items introduced to the tune of 26% of the initial contract price and disputes arose are not resolved.

In the circumstances we request the Hon. Chairman of the Council of the Indian Roads Congress, to appoint a Dispute Review Expert as stipulated in clause 36.1 of ITB forming part of the agreement without any delay, with due intimation to us in writing."

4. On 7th August, 2009, the Indian Roads Congress addressed a letter to the Chief Engineer, PWD National Highways, Thiruvananthapuram to inform about the appointment of Dispute Review Expert as early as possible. On 6th October, 2009, the Indian Roads Congress wrote to the Chief Engineer, Ministry of Road Transport & Highways, New Delhi requesting him to inform about the appointment of Dispute Review Expert. The applicant states that there was no reply to the letters sent by him for appointment of a Dispute Review Expert.

5. The applicant relies on Clauses 24 and 25 of the Standard Bidding Document which forms part of the contract. Clauses 24 and 25 read as follows:

"24. Disputes

24.1 If the Contractor believes that a decision taken by the Engineer was either outside the authority given to the Engineer by the Contract or that th















































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