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RAJASTHAN HIGH COURT BENCH AT JAIPUR
Manindra Mohan Shrivastava, J.
M/s Sharma Engineering - Appellant
Versus
The Executive Engineer - Respondent
S.B. Arbitration Application No. 167 of 2021
Decided On : 03-11-2023
Arbitration - Dispute Resolution - Arbitration and Conciliation Act, 1996 - Sections 11(5), 11(6) - The court interpreted the provisions for appointing an arbitrator in disputes arising from contracts, emphasizing the necessity of arbitration when claims are denied and disputes exist.
Fact of the Case:
The applicant firm sought the appointment of an arbitrator due to disputes arising from a construction contract, including delays and non-acceptance of escalated bills, after the respondent failed to act on the arbitration clause.
Finding of the Court:
The court found that there was a prima facie case for arbitration as the respondent denied the applicant's claims, and the arbitration clause was valid and applicable.
Issues: Whether there exists a valid dispute warranting the appointment of an arbitrator under the Arbitration and Conciliation Act, 1996.
Ratio Decidendi: The court held that the existence of a dispute, as evidenced by the respondent's denial of claims, justified the appointment of an arbitrator under the arbitration clause of the contract.
Result: The court appointed Hon'ble Mr. Justice Dalip Singh (Retired) as the sole arbitrator for the dispute.
ORDER
Manindra Mohan Shrivastava, J. - Present is an application filed under Section 11(5) read with Section 11(6) of the Arbitration and Conciliation Act, 1996 (for short 'the Act') for appointment of arbitrator in the matter of dispute between the parties.
2. In the application, the applicant has stated that the applicant firm was awarded work of construction, strengthening, widening of re-construction of C.D. work on Baroni Shiwar Adalwara Sawai Madhopur Bhoori Pahari Kurgaon Road and an agreement bearing No.74/2010-11 came to be executed between the Executive Engineer, P.W.D Division, Sawai Madhopur and the applicant firm. A work order was thereafter issued on 24.09.2010 for execution of work of Rs.8,40,59,838/- in favour of the applicant firm. However, during the course of execution of contract dispute arose between the parties as according to the applicant on account of nonfulfillment of obligations on the part of the non-applicant department, the completion of work was delayed by 466 days. Though, extension was granted, dispute with regard to bill arose because the contractor had submitted bill based on escalated prices in case of delay. As the claim for escalated bill was not accepted by the respondent, despite various representations made by the applicant, a legal notice raising dispute and for appointment of arbitrator in terms of the arbitration clause was given on 15.03.2021. As respondent did not proceed to act in accordance with the terms of the arbitration clause towards appointment of arbitrator but only disputed the claim of the applicant, present application has been filed.
3. Learned counsel for the respondent referring to reply would submit that the claim of the applicant is not tenable in law. He would submit that the applicant did not complete the work as per the terms and conditions of the contract. Therefore, in these circumstances present is not a case of an arbitral dispute warranting appointment of an arbitrator.
4. Learned counsel for the applicant has placed on record copy of the agreement which contains an arbitration clause which reads as below:-
The procedure for arbitration will be as follows:
25.3 (a) In case of Dispute or difference arising between the Employer and a domestic contractor relating to any matter arising out of or connected with this agreement, such disputes or difference shall be settled in accordance with the Arbitration and Conciliation Act, 1996. The parties shall make efforts to agree on a sole arbitrator and only if such an attempt does not succeed and the Arbitral Tribunal consisting of 3 arbitrators one each to be appointed by the Employer and the Contractor and the third Arbitrator to be chosen by the two Arbitrators so appointed by the Parties to act as Presiding Arbitrators shall be considered. In case of failure of the two arbitrators appointed by the parties to reach upon a consensus within a period of 30 days from the appointment of the arbitrator appointed subsequently, the Presiding Arbitrator shall be appointed by the Council, Indian Roads Congress.
(b) The Arbitral Tribunal shall consist of three Arbitrators one each to be appointed by the Employer and the Contractor. The third Arbitrator shall be chosen by the two Arbitrators so appointed by the Parties, and shall act a presiding arbitrator. In case of failure of the two arbitrators appointed by the parties to reach upon a consensus within a period of 30 days from the appointment of the arbitrator appointed subsequently, the Presiding arbitrator shall be appointed by the Council, Indian Roads Congress.
(c) If one of the parties fails to appoint its arbitrator in pursuance of sub clause (a) and (b) above within 30 days after receipt of the notice of the appointment of its arbitrator by the other party, then the Council, Indian Roads Congress shall appoint the arbitrator. A certified copy of the order of the Council, Indian Roads Congress, making such an appointment shall be furnished to
The main legal point established is that once an application is filed under Section 11(6) of the Arbitration and Conciliation Act 1996, the right of the opposite party to appoint the arbitrator cease....
An application for appointment of an arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996 is maintainable despite previous delays, as no arbitral proceedings were initiated un....
The court's authority to appoint an arbitrator in cases where the parties are unable to agree, in accordance with the law laid down by the Supreme Court and the provisions of the Arbitration & Concil....
The court has jurisdiction to appoint an arbitrator when parties cannot agree, reaffirming the necessity to comply with provisions of the Arbitration and Conciliation Act, 1996.
The court's power to appoint an arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996 and the arbitrability of disputes under the agreement's Clause 25.
Disputes arising under an agreement concerning construction are arbitrable, and a court may appoint an arbitrator as per the Arbitration and Conciliation Act, 1996.
The court affirmed the necessity of timely appointment of an adjudicator as per the arbitration agreement and relevant statutory guidelines.
The court's decision emphasized the arbitrability of disputes and the appointment of a sole arbitrator under the Arbitration and Conciliation Act, 1996.
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