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2014 Supreme(Ker) 376

High Court of Kerala
T.R. RAMACHANDRAN NAIR & P.V. ASHA, JJ.

Coastal Engineering, Konthuruthy
Versus
Southern Railway represented by its Managing Partner K.J. John & Others
A.R. Nos. 20 & 39 of 2010 & 28 of 2013
Decided on: 07-07-2014

Advocates Appeared:
For the Appearing Parties:M/s. K.S. Babu, N. Sudha, M.K. Aswathi, K.C. Eldo, Jijo Thomas, Advocates, C.S. Dias, Standing Counsel for Railway.

Headnote:

Arbitration and Conciliation Act, 1996 - Section 11(6) - Appointment - Right of - Findings of - Held, Court is of view that finding in paragraph 14 of said judgment which Court have quoted already, will govern as far as situation envisaged under Section 11(6) - Where an appointment procedure is agreed to by parties - Appointment has to be made before former files an application under Section 11 seeking appointment of an arbitrator and only then right of opposite party ceases

Judgment :

Ramachandran Nair. J.

1. These Arbitration Requests have been referred to the Division Bench by the learned Single Judge. The respective applicants have filed the Arbitration Requests beyond 30 days from the demand, to appoint an Arbitrator and before the expiry of the period provided by the General Conditions of Contract. The common respondents are the General Manager, Southern Railway and other Railway officials.

2. We will refer to the bare facts necessary for the disposal of the Arbitration Requests and A.R. No.28/2013 is taken as the leading case. The respondents tendered the work, viz. "bulk right for commercial publicity for the notified area and media" at different railway stations under the Southern Railway, Kollam Junction, Ernakulam Junction and Thrissur Railway Stations. Exts.A1 to A3 are the agreements executed by the petitioner and the fourth respondent dated 26.10.2011. Clauses 26 and 27 are relevant in the context of the issues raised in these cases. Clause 26 is extracted below:

"In the event of any difference of opinion or dispute between the Railway Administration and the contractor as to the respective rights and obligations of the parties hereunder or to the true intentions of conditions, such difference of opinion shall be referred to the sole arbitrator who shall be a Gazetted Railway Officer appointed by the General Manager, Southern Railway, Chennai."

By the same, any dispute between the Railway Administration and the contractor with regard to the rights and obligations of the parties shall be referred for arbitration by a sole arbitrator. Clause 27 and its applicability has also arisen for consideration. Therefore, we extract the same:

"Except as otherwise provided herein any arrangements or agreement oral or written varying or supplementing this contract or any of the terms thereof shall be no effect and shall not be valid or binding or enforceable on the Government unless and until the same is endorsed on this contract or incorporated in a formal agreement in writing and signed by the parties hereto. These instructions and specification should be read in addition to the General Conditions of Contract."

Going by the same, the terms and conditions should be read in addition to the general conditions of the contract.

3. According to the petitioner, what is relevant is only clause 26 whereas the respondents have taken a stand that the relevant clauses contained in the general conditions of the contract concerning arbitration are also relevant.

4. In the counter affidavit filed by the respondents, the above contention has been taken. Annexure R4(7) contains the general conditions, viz. clauses 63 and 64(1)(i) which are extracted hereinbelow:

"63. Matters finally determined by the Railway -All disputes and differences of any kind whatsoever arising out of or in connection with the contract, whether during the progress of the work or after its completion and whether before or after the determination of the contract shall be referred by the contractor to the Railway and the Railway shall within 120 days after receipt of the contractor's representation make and notify decisions on all matters referred to by the contractor in writing provided that matters for which provision has been made in clauses 8(a), 18, 22(5), 39, 43(2), 45(a), 55, 55-A(5), 57, 57A, 61(1), 61(2) and 62(1)(b) of General Conditions of Contract or in any clause of the special conditions of the contract shall be deemed as 'excepted matters' and the decisions of the Railway authority, thereon shall be final and binding on the contractor provided further that 'excepted matters' shall stand specifically excluded from the purview of the arbitration clause and not be referred to arbitration.

64(1)(i) - Demand for Arbitration -

In the event of any dispute or difference between the parties hereto as to the construction or operation of this contract, or the respective rights and liabilities of the parties on any matter in question, disput
























































































































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