The court emphasized the importance of adopting a simple, unambiguous, and uncomplicated procedure for dispute resolution through arbitration in respect of inter-related contracts with different parties in the same project.

JUDGMENT :

(Prayer: Petition filed under Section 11 (6) of the Arbitration and Conciliation Act, 1996, to appoint a suitable person as nominee Arbitrator of the respondent as per the Arbitration clauses in the Agreements dated 04.02.2005 and 10.09.2004 to decide the disputes which have arisen between the petitioner and the respondents.)

1. The petition has been filed invoking the provisions of section 11 (6) of the Arbitration and Conciliation Act, 1996, herein after called the Act. The petitioner who is the Tamilnadu Road Sector Project II, Highways Department had entrusted to the 1st respondent herein the Civil constructions work relating to the upgradation of the road from Nagapatinam to Kattumavadi and the new bypass roads at, Nagapattinam, Thiruthuraipundi and Muttupet, which was being financially assisted by a loan from the International Bank for Reconstruction and Development in the year 2005.

2. The 1st respondent was entrusted with the civil construction work and an agreement to this effect was entered into on 04.02.2005. Prior to this agreement, the petitioner had engaged the services of the 2nd respondent as the Supervision Consultant, to supervise and administer the contract for which an agreement was entered into on 10.09.2004 between the petitioner and the 2nd respondent.

3. The petitioner would submit that the 1st respondent who had commenced the contract in the year 2005 had concluded the same in the year 2011 and the defects liability period also came to an end in the year 2012.

4. The petitioner would contend that on 03.04.2017 when the inspection was conducted by the Director, Highways Research Station, several defects were found in the work undertaken and a letter dated 01.07.2017 was addressed to the respondents directing them to inspect the defects and give the actual cost estimate for the repair and rehabilitation of the ROB. The 1st respondent did not submit any response. However, the 2nd respondent had issued a reply dated 21.07.2017.

5. Thereafter, since the repair works were not effected the same was undertaken by the petitioner through the Chief Engineer, Construction and Maintenance Department by reason of which the petitioner had incurred huge costs. Thereafter, on 29.08.2019, the petitioner had issued separate legal notices to the respondents to make good the loss. The petitioner had called upon the respondents to treat the said notice as an invocation of the arbitration clause under Section 21 of the Act. They had nominated one Mr.V.Thamilselvam, Chief Engineer (Retd) as their arbitrator. The petitioner had invoked clause 67.3 of the General Conditions of contract of the agreement dated 04.02.2005 entered into with the 1st respondent, for ease of understanding hereinafter referred to as the 2nd Contract, and clause 8.2 of the Special Conditions of Contract dated 10.09.2004 entered into with the 2nd respondent, for ease of understanding hereinafter referred to as the 1st Contract.

6. To this notice, the 1st respondent had sent a reply dated 01.10.2019 and the 2nd respondent had sent a reply dated 07.10.2019. Both the respondents had denied the liability and they had contended that the 2nd contract contemplated an arbitral tribunal consisting of three members, and clause 8.2 of the Special Conditions of the 1st Contract contemplated an arbitral tribunal consisting of a sole arbitrator. They would also contend that the agreement having come to an end in the year 2012 the invocation of the arbitral clause was not maintainable. The petitioner contended that since the contracts related to the same work they were filing a single petition under Section 11 (6) of the Act for appointing an arbitrator.

7. The 2nd respondent has filed a counter in and by which they would contend that there is no arbitral dispute between the parties since the 2nd respondent has completed its services under the supervision consultancy contract. Further, the 2nd respondent would contend that the grounds on which the reliefs are sought