IMPORTANT POINT
Arbitrator – Appointment of – Original agreement containing arbitration clause was overridden by fresh agreement which did not had arbitration clause – Application for appointment of arbitrator dismissed

S.J. Vazifdar, J.

This is an application filed under section 11 of the Arbitration & Conciliation Act, 1996 (for short ‘the Act’) for the appointment of an Arbitrator.

2. The respondent invited tenders for civil construction works. Clause 52 relates to settlement of disputes by way of arbitration. Clause 52.3 in so far as is relevant reads as under:-

“52.3 Subject as aforesaid in clauses 52.1 and 52.2, all disputes and differences whatsoever, which shall at any time hereafter arise between the parties here touching or concerning this agreement or its interpretation of effect or as to the rights, duties, obligations arid liabilities of the parties hereto or either of them under of by virtue of this Agreement or otherwise as to any other matter in any way connected with or arising out of or in relation to the subject matter of this Agreement shall be referred to the Arbitration in accordance with the provisions of Arbitration & Conciliation Act, 1996. The parties agree that the reference of the disputes and differences between the parties would be made to the Sole Arbitrator, to be appointed jointly.

The jurisdiction and arbitration venue shall be at Gurgaon. The procedure for the arbitration shall be determined by the Arbitrator. Costs of such arbitration shall be equally shared between the owner and the contractor. The parties undertake to abide and remain bound by the award of the Arbitrator so rendered.”

3. The petitioner’s tender was accepted and the parties entered into an agreement dated 30.10.2010. Disputes and differences arose between the parties. The petitioner by a letter dated 05.04.2014 claimed that an amount of about Rs. 8.72 crores was due and payable by the respondent to it and invoked the arbitration and settlement clause 52 as also clause 32.5. The question that arises for consideration is whether the arbitration agreement survives in view of what transpired between the parties thereafter.

4. A letter dated 10.12.2014 was addressed by the petitioner to the respondent with the caption “Final Settlement of Claims”. The subject of the letter is ‘Full and final settlement of claim for the execution of the said contract”. The letter refers to various meetings held between the parties to resolve the issue relating to the petitioner’s claim and “the payment finally agreed to be payable”. The letter further states as under:-

“After detailed discussions and deliberations, it has been finally agreed that total sum of Rs.218.15 lacs is quite reasonable and payable. The details of payment found to be payable against the various claims raised by us are brought out as under:-

Sr. No.	Description of claims	Amount claimed by GSDPL (in lacs)	Approved/Payable (in lacs)	Cheque amount being paid now	Cheque No.	Balance payable Due
1.	Final Bill (Full & Final)	75.38	67.07	14.00 32.22	000172 000166	20.85
2.	Service tax on owners supplied stocks & interest on till date Service tax on owners supplied stocks.	42.95 22.37	42.95 7.73	48.51	000081	2.17
3.	Variation in accounts	5.00	0.00	0.00	-	0.00
4.	Co-ordination charges for work got done by other agency and taken out of GSDPL scope (façade work i.e. 5% of Rs. 17163767/- as per schedule of quantities of agreement of façade work)	25.90	8.50	8.50	000167	0.00
5.	Variation in labour & material of work done after stipulated period (3cr) labour+material + fuel	158.04	18.00	18.00	000168	0.00
6.	Retention	37.91	37.90	37.90	000169	0.00
7.	Amount of resale of scrap	14.72	0.00	0.00	-	0.00
8.	Compensation for 9.5 months of delay	340.50	0.00	0.00	-	0.00
9.	Idealing charges for Aug.2010 to Dec.2010 (on account of court order restricting water from borewells and installation of STP during construction) & Mis