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IN THE HIGH COURT OF ORISSA, CUTTACK
Dr. S. Muralidhar, J.
United Construction - Appellant
Versus
The Chief General Manager & Ors. - Respondents
ARBP No. 69 of 2018
Decided On : 01-10-2021
Arbitration - Appointment of Arbitrator - Section 11(6) of the Arbitration and Conciliation Act, 1996 - Clause-64 of the General Conditions of Contract (GCC) - Amendment to the Act in 2015 - Section 12(5) of the Act
Fact of the Case:
The petitioner sought appointment of an Arbitrator to adjudicate disputes arising from a work award. The petitioner claimed that the disputes were to be referred to a sole Arbitrator or a panel of Railway Officers as per the General Conditions of Contract (GCC) and the amended Act. The respondent disputed the claims, citing time-barred demands.
Finding of the Court:
The Court found that the petitioner's claims appeared ex facie time-barred and declined to refer the dispute to arbitration, dismissing the arbitration petition.
Issues: The issues involved the appointment of an Arbitrator under Section 11(6) of the Act, the applicability of Clause-64 of the GCC, and the effect of the 2015 amendment to the Act. The delay in the petitioner's fresh claim and the time-barred nature of the demands were also key issues.
Ratio Decidendi: The Court held that the claims of the petitioner were ex facie time-barred and therefore could not be referred to arbitration. The Court also emphasized the need for the petitioner to satisfactorily explain the delay in the fresh claim.
Final Decision: The arbitration petition was dismissed, and no order as to costs was made.
ORDER
Dr. S. Muralidhar, ACJ. - This petition under Section 11(6) of the Arbitration and Conciliation Act, 1996 ('Act') seeks appointment of an Arbitrator to adjudicate the disputes between the Petitioner and the Opposite Parties East Coast Railways (ECR) arising from the award of work in favour of the Petitioner on 19th April, 2010 for replacement of the existing steel channel sleepers with new galvanized fastenings.
2. The case of the Petitioner is that under Clause-64 of the General Conditions of Contract (GCC), governing the award of the above work, as amended on 11th November, 2016, the disputes involving claims of total value not exceeding One Crore were to be referred to the sole Arbitrator who shall be a Gazetted Officer of the Railway not below the rank of J.A. cadre nominated by the General Manager, who shall be appointed within 60 days from the date of demand. In other cases, the disputes were to be referred to a panel of three Gazetted Railway Officers not below the J.A. cadre or two Railway Gazetted Officers not below the J.A. cadre and a retired Railway Officer not below the rank of an SAG Officer.
3. The Petitioner states that in view of the amendment made to the Act in 2015, an option was given to the parties to waive of the applicability of Section 12 (5) of the Act. According to the Petitioner he prayed for extension of time for completion of the work but this request was not accepted. Therefore, by a letter dated 12th November 2012 he requested the ECR to close the work and release the funds.
4. The Petitioner by letter dated 25th June, 2018 is stated to have raised a demand and sought the appointment of an Arbitrator. In paragraph 6 of the petition it is stated by the Petitioner that by a letter dated 6th July, 2018 he was advised by the General Manager, Arbitration, of the ECR to sign a letter exempting the applicability of the Section 12 (5) of the Act. The Petitioner declined and wrote back on 21st July, 2018 asking the General Manager to suggest a panel of Arbitrators. It is stated that on 4th September, 2018 the Chief General Manager (CGM) wrote to the Petitioner disputing the correctness of the demand and declined the request.
5. On 14th September, 2018 the Petitioner's request for the appointment of Arbitrator was rejected. The ECR stated in the said letter that the claim of the Petitioner was baseless and would not be required to be referred to arbitration. It is in the above circumstances, the present petition was filed on 21st December, 2018.
6. The ECR has filed a reply to the petition on 24th July, 2019.It is stated therein that the work was completed within the extended date, i.e., 31st March, 2013. The final bills (one each for Asst. Divisional Engineer/Bhubaneswar and Dhenkanal) had been passed and the contractor submitted 'No Claim Certificate' (NCC) on both the final bills. Thereafter, the final bills were passed and the security deposit was released on the Petitioner submitting the NCC.
7. In its reply the ECR has pointed out how five years after the release of the money, the Petitioner applied by a letter dated 25th June, 2018 for the appointment of an Arbitrator. The claim was time-barred and was accordingly rejected.
8. At the hearing of the present petition on 5th July, 2021 the Court noticed that the NCC had been signed by the Petitioner on 16th November, 2013 whereas the fresh notice by the Petitioner to the ECR making a claim was sent on 25th June, 2018. The Petitioner was asked to explain the gap of over four years between these dates. Mr. Rao, learned Senior counsel appearing for the Petitioner then sought time for instructions regarding the delay.
9. The Court heard the submissions of Mr.S.S. Rao, learned Senior counsel appearing for the Petitioner and Mr. A.K. Mishra, learned counsel appearing for the ECR.
10. Mr. Rao referred to the decision dated 10th March, 2021 of the Supreme Court of India in Civil Appeal Nos. 843-844 of 2021 (Bharat Sanchar Nigam Ltd. v. M/s. Nortel Networks Indi
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