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2022 Supreme(Jhk) 787

IN THE HIGH COURT OF JHARKHAND AT RANCHI
Sujit Narayan Prasad, J.
Gram Tarang Employability Training Services Private Limited - Petitioner
Versus
Jharkhand Skill Development Mission Society represented through its Mission Director, Department of Labour, Employment, Training and Skill Development - Respondent
Arbitration Application No. 33 of 2022
Decided On : 23-12-2022

Advocates:
Advocate Appeared:
For the Petitioner:Mr. Mayank Mohit Sinha, Advocate
For the Respondent:Mr. Prem Mardi, Advocate

The main legal point established in the judgment is the Court's authority to appoint an arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996 based on the arbitration clause in the agreement.

Headnote:

Arbitration - Appointment of Arbitrator - Arbitration and Conciliation Act, 1996, Section 11(6)

Fact of the Case:

The petitioner/applicant entered into a Concession Agreement with the respondent for setting up a Mega Skill Training Centre. Disputes arose regarding the implementation of the agreement, including the pause in activities due to the Lok Sabha elections and the COVID-19 pandemic, non-payment of invoices, and invocation of the Force Majeure Clause. The petitioner sought appointment of an arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996.

Finding of the Court:

The Court found that the arbitration clause in the Concession Agreement allowed for the appointment of an arbitrator if the parties failed to resolve their dispute through mutual consultations. The Court exercised its power under Section 11(6) of the Act and appointed an arbitrator to resolve the dispute.

Issues: The main issue was the appointment of an arbitrator to resolve the dispute between the petitioner and the respondent.

Ratio Decidendi: The Court relied on the arbitration clause in the Concession Agreement, which provided for the appointment of an arbitrator if mutual consultations failed to resolve the dispute. The Court exercised its power under Section 11(6) of the Arbitration and Conciliation Act, 1996 based on the arbitration clause.

Final Decision: The Court allowed the arbitration application and appointed Mr. Ashok Kumar Pathak, Principal District Judge (retd.), as the arbitrator for resolution of the dispute.

JUDGMENT :

1. The instant application is under Section 11 (6) of the Arbitration and Conciliation Act, 1996 seeking a direction for appointment of Arbitrator for resolution of dispute.

2. The case as per the pleading made on behalf of the petitioner-applicant reads as under :

It is the case of the applicant/petitioner that the respondent had invited bids from the eligible bidders vide request for proposal (RFP) dated 22nd March, 2018 for setting up Mega Skill Training Centre, Ranchi and the petitioner in terms of the RFP submitted its Expression of Interest (EOI) dated 18th April, 2018, based on the technical evaluation score and technical presentation score, the Tender Committee constituted by the respondent finding the petitioner to be bidder, awarded the contract to the petitioner and subsequently, a Concession Agreement dated 11.10.2018 was executed between the petitioner and the respondent. The respondent, vide letter dated 08.03.2019 issued work order for various training services that can be provided by the petitioner and also mentioned the tentative training fee of INR 3589.48 Lakhs for the period of 5 years.

It is the further case of the petitioner that on 12.03.2019, the Election Commission of India vide its order dated 12.03.2019 enforced a code of conduct during the Lok Sabha elections and consequently, the respondent vide its letter dated 12.03.2019 paused the implementation of all its activities and projects, including the project granted to the petitioner. Thereafter, the petitioner has submitted the requisite performance security vide bank guarantee amounting to INR 35,89,550 in order to perform the work allotted to the petitioner at Ranchi Centre.

The respondent granted approval to the petitioner for sewing machine operator training. Due to onset of Corona Virus Pandemic, the department of Higher, Technical Education and Skill Development, Govt. of Jharkhand vide its notice dated 16th March, 2020 ordered to vacate all training institutions including the petitioner and further ordered such institutions to remain shut at least upto 16th April, 2020. Thereafter, the petitioner/applicant raised a total number of 18 invoices from December, 2019 to September, 2020 amounting to INR 25,82,284. Out of 18 invoices, 14 invoices were approved by the Account Officer and 4 invoices are MIS verified as per the details received from the portal. As per the Clause 14 of the Concession Agreement and Clause 1.2 of Schedule II of the Concession Agreement, the respondent was required to make the payment of the invoices raised within 60 days. The respondent, vide email dated 16.09.2020 sought the petitioner’s willingness to re-open. The petitioner/applicant vide email dated 19.09.2020 indicating its willingness to open the center and outlined the training programs. Thereafter, no response was received from the respondent to the petitioner’s email dated 19.09.2020.

Since, no response was received from the respondent regarding conduct of counseling for the previous batches and for approval of the new batches coupled with no payments, the petitioner/applicant invoked the Force Majeure Clause under Clause 20 of the Concession Agreement thereby requesting the respondent to accept the termination of the Concession Agreement and further, sought for the release of the performance guarantee and sought payment for services already provided under the Agreement in terms of Clause 26.3.4 (Termination Payment) of the Concession Agreement. Thereafter, the petitioner also sent a follow up letter dated 19.11.2020 intimating the vacation of the Mega Skill Centre and requesting the release of the bank guarantee and the pending payments and also notified that all future communications may be made to the corporate office as it was in the process of leaving their training centre/premises in Ranchi.

The petitioner/applicant has made several communications/notices for resolution of the dispute between the parties and for appointment of arbitrator but the responde

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