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IN THE HIGH COURT OF JUDICATURE AT MADRAS
M. SUNDAR, J.
Siemens Limited Seethakathi Business Centre, Rep by its Manager - PD LD Project Management Gurubaran Senthurpandian, Chennai - Petitioner
Versus
M/s. Marg Limited, having its Registered Office at “Marg Axis”, 4/138, Chennai – Respondent
O.P. No. 535 of 2017
Decided On : 09-04-2019
Arbitration and Conciliation Act, 1996 - Section 34 and 21 - Limitation Act, 1963 - Section 3 - Agreement - Work order - Manufacture and supply - Petitioner in instant O.P and learned counsel on behalf of sole respondent in instant O.P were before this Court - Petitioner in instant O.P was sole claimant before AT and respondent in instant O.P was lone respondent before AT also - Therefore petitioner shall be referred to as claimant and sole respondent in instant O.P shall be referred to as respondent for convenience - Entire agreement between petitioner/claimant and respondent for supply of said switch yard - To be noted there was an undated contract which according to petitioner/claimant is described to be in February of - It is admitted by both sides that this contract was never signed and therefore same may not be looked into - It is submitted without any disagreement by both sides that petitioner / claimant raised running account bills RA Bills for brevity and that same were paid from time to time by respondent - There is also no disagreement that staggered payment qua RA Bills was in three parts namely as advance payable against bank guarantee against proforma invoice for each of equipments / materials and after completion of supply against performance bank guarantee – Held, Court refrains from expressing any view regarding Full Bench judgment of High Court as it was on reference and more facts become necessary to examine if said judgment would apply to instant case - However on facts of instant case even if date of completion is taken as the reckoning date it comes to light that it does not help petitioner / claimant owing to its own statemen - Except energisation and commissioning of said switch yard and therefore is not reckoning date - However it is nobodys case that petitioner / claimant completed energisation and commissioning of said switch yard - There is no dispute that it was ultimately energised and commissioned by respondent by engaging third parties - Court is not going into the question of who is responsible - What comes out very clearly is petitioner / claimant did not do energisation and commissioning of said switch yard - Therefore as it is admitted position of petitioner / claimant that it completed supply and works on same has to be taken as date of completion of work - On a demurrer even if this date of completion of work is taken as reckoning date the arbitral proceedings commenced only on and therefore it is hit by limitation - AT instant OP fails and same is dismissed.
1. Instant 'Original Petition' ('O.P' for brevity) has been filed under section 34 of 'The Arbitration and Conciliation Act, 1996' ('A and C Act' for brevity), assailing an arbitral award dated 20.04.2017 ('impugned award' for brevity) made by an 'Arbitral Tribunal' ('AT' for brevity) constituted by a Sole Arbitrator, who is a Former Judge of this Hon'ble Court.
2. Mr. Jose John, learned counsel of M/s. King & Partridge (Law Firm) on behalf of petitioner in instant O.P and Mr. V.J. Arul Raj, learned counsel on behalf of sole respondent in instant O.P were before this Court. Petitioner in instant O.P was sole claimant before AT and respondent in instant O.P was lone respondent before AT also. Therefore, petitioner shall be referred to as 'claimant' and sole respondent in the instant O.P shall be referred to as 'respondent' for convenience.
3. The entire matter turns on a very narrow compass. Subject matter of instant O.P is a 110/33 KV outdoor switch yard (hereinafter 'said switch yard' for brevity) for 'Karaikal Port Private Limited' (hereinafter 'Karaikal Port' for brevity). In the light of the narrow compass on which the entire matter turns, it is not necessary to delve into those aspects.
4. Suffice to say that respondent issued one purchase order and two work orders (one work order and an additional work order) for design, manufacture and supply of said switch yard. The work order is dated 02.08.2010, value is Rs.2,01,27,998.01 and it is Ex.C.3 before AT. Purchase order is dated 04.08.2010, value is Rs.3,48,98,313.18 and this purchase order is Ex.C.4 before AT. Additional work order is dated 12.6.2012, value is Rs.5,80,438.00 and this additional work order is Ex.C.5 before AT. There is no dispute or disagreement before this court that this work order, purchase order and additional work order, namely Exs.C.3, C.4 and C.5 respectively constitute the entire agreement between petitioner/claimant and respondent for supply of said switch yard. To be noted, there was an undated contract, which according to the petitioner/claimant, is described to be in February of 2010. It is admitted by both sides that this contract was never signed and therefore, the same may not be looked into. In this view of the matter, it was agreed by both sides that it would be appropriate to refer to aforesaid work order, purchase order and additional work order (Exs.C.3, C.4 and C.5 respectively) collectively as 'said contract' for convenience and clarity. To be noted, wherever necessary and proper, individual and specific reference to these three documents, namely Exs.C.3, C.4 and C.5, will be made.
5. With regard to the manner in which said contract operated, it is submitted without any disagreement by both sides that petitioner / claimant raised 'running account bills' ('RA Bills' for brevity) and that the same were paid from time to time by respondent. There is also no disagreement that staggered payment qua RA Bills was in three parts, namely, 10 % as advance payable against bank guarantee, 75% against proforma invoice for each of equipments / materials and 15% after completion of supply against performance bank guarantee. The third part of staggered payment, namely 15% is being referred to as 'retention money'.
6. Crux and gravamen of the arbitrable dispute between petitioner claimant and respondent is that petitioner / claimant had raised a total of 16 RA Bills for cumulative value of Rs.5,33,89,246.00, but the respondent had paid only Rs.4,34,73,784.00 leaving a balance of Rs.99,15,462.00. However, it is also the petitioner / claimant's case that out of 16 RA Bills, with regard to RA Bills 1 to 10, respondent had not released retention money and in respect of RA Bills 11 to 16, respondent defaulted in payment of both retention money as well as value payable for supply or execution of work. On this basis, petitioner / claimant raised an arbitrable dispute, AT was constituted, arbitral proceedings commenced and claim statement dated 04.03.201
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