The arbitration clause becomes operative only when a concluded contract exists, and the absence of a concluded contract renders the application for appointment of an Arbitrator under Section 11 (6) of the Arbitration and Conciliation Act, 1996, not maintainable.

JUDGMENT :

S. MURALIDHAR, J.

1. This is a petition under Section 11 (6) of the Arbitration and Conciliation Act, 1996 (A and C Act) seeking appointment of an Arbitrator to adjudicate the disputes between the Petitioner on the one hand and the Odisha State Medical Corporation (OSMC) [Opposite Party Nos. 1 and 2] on the other, arising out of the bid submitted by the Petitioner for supply of medical drugs, injections etc. pursuant to an e-tender floated on 4th June, 2021.

2. The OSMC floated the above tender which had two components viz. technical and financial. The last date for submission of tender documents was 14th July 2021. The Petitioner was one of the bidders as was Opposite Party No. 4.

3. According to the Petitioner, the technical bids submitted by Opposite Party No. 4 showed that it was in no way qualified to participate for the item for which it had bid. However, according to the Petitioner, the bid of Opposite Party No. 4 was wrongly accepted by the OSMC in violation of the tender conditions. The present Petitioner was L-2 and according to the Petitioner the tender ought to have been awarded to it. A representation was made by the Petitioner to the OSMC on 1st and 2nd September, 2021. However, OSMC did not reply to those letters.

4. By a letter dated 15th September 2021, OSMC called for the Petitioner to give its consent to supply the item quoted as per the L-1 approved rate. By a reply dated 18th September 2021, the Petitioner expressed its willingness to supply the said item at L-1 rates “on the condition that it is awarded the entire quantity mentioned in the item 39 for supply.” The Petitioner submitted a further amended response on 7th October, 2021.

5. OSMC sent a trailing mail dated 20th September 2021 accepting the matching offer of the Petitioner and stating that the purchase order would be issued in its favour as per the terms and conditions of the tender. However, the said letter was silent on whether the Petitioner would be given a purchase order for the entire quantity. Thereafter, no purchase order was placed by OSMC with the Petitioner and there was no communication either.

6. This according to the Petitioner gave rise to the disputes between the parties. Invoking Clause-6.34 of the General Conditions of Contract (Section VI), the Petitioner issued a notice to OSMC on 20th October 2021 seeking the appointment of an Arbitrator, in the event that it was not awarded the tender for the bulk supply in its entirety. With no response forthcoming, the present petition was filed on 1st December, 2021.

7. In response to the notice issued in the present petition, OSMC filed a reply questioning the maintainability of the arbitration petition. According to OSMC, Clause-6.34.1, the dispute or difference could arise only between the tender inviting authority (i.e. OSMC) and the “successful bidder in connection with/or relating to the contract.” It was contended that since Opposite Party No. 4 and not the Petitioner was the successful bidder, the Petitioner could not invoke the above clause. It was pointed out by OSMC that no letter of intent had been issued and no contract/agreement had in fact been executed with the Petitioner as envisaged under Clause 6.25.1 of the tender document. Further, it was submitted that the dispute that had arisen was not in relation to the contract but in relation to the bidding process. It was pointed out that in terms of Clause 6.35.2, dispute arising out of the bid were to be subject to “jurisdiction of courts of law in Bhubaneswar/High Court of Orissa”

8. Mr. Kamal Bihari Panda, learned Senior Advocate for the Petitioner referred to Clause 6.34 and submitted that the applicable procedure in the event of dispute between the parties arising out of the bid document were to be referred to the arbitration in terms of the A and C Act and therefore, this petition was maintainable. He emphasized that the limited/conditional offer made by the Petitioner by its letter dated 18th September 2021was accept