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2023 Supreme(All) 2899

IN THE HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH
JASPREET SINGH, J.
Omex Autos Ltd. Thru. Mr. Anand Kumar Tiwari - Appellant
Versus
Hi-Tech Competent Builders Pvt. Ltd. - Respondent
Civil Misc. Arbitration Application No. 4 of 2023
Decided on : 20-11-2023

Advocates Appeared:
For the Appellant : Divyanshu Bhatt,Shashwat Singh
For the Respondent: Ashok Kumar Singh

The court must dismiss a petition for arbitration if the arbitration clause is not properly invoked as specified in the agreement.

Headnote:(A) Arbitration and Conciliation Act, 1996 - Section 11(6) - Appointment of Arbitrator - Disputes arising from an agreement dated 01.06.2019 concerning construction work - The petitioner sought to appoint an arbitrator when the respondent invoked NCLT jurisdiction instead of arbitration - Petition dismissed for failure to appropriately invoke arbitration clause as required by the contract. (Paras 1, 28)

(B) Preliminary objections - Jurisdiction - Dispute over the appropriateness of the court's jurisdiction based on the agreement terms; the court found no exclusionary clause ousting its jurisdiction. (Paras 7, 18)

(C) Obligations under arbitration clause - The agreed procedure requires the invocation of the Architect’s decision before escalating to arbitration. The petitioner did not follow this. (Paras 22-27)

(D) Principle of dispute - The existence of a dispute is established despite ongoing negotiations, thereby necessitating adherence to the arbitration clause's terms. (Paras 20, 21)

Table of Content
1. request for arbitration based on contract. (Para 1 , 2 , 3 , 4)
2. disputed jurisdiction and proper invocation of arbitration clause. (Para 5 , 6 , 7 , 8 , 9 , 10 , 11 , 12)
3. court analysis on jurisdiction and arbitration clause adherence. (Para 13 , 14 , 15 , 16 , 17 , 18 , 19 , 20 , 21 , 22 , 23 , 24 , 25 , 26 , 27)
4. court dismisses petition; future arbitration options remain open. (Para 28 , 29)

JUDGMENT :

JASPREET SINGH, J.

1. The instant petition has been preferred under Section 11 (6) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as "the Act of 1996", for short) for seeking appointment of an arbitrator to adjudicate the disputes having arisen between the parties arising out of an agreement dated 01.06.2019.

2. Shri Divyanshu Bhatt, learned counsel for the petitioner submits that the parties had entered into an agreement dated 01.06.2019 and the scope of work was largely relating to shed-large span, all miscellaneous civil/ structural work relating to setup of building, RCC Building and utilities, underground tanks, site plumbing works, road and development works and other enabling works. It is stated that the said agreement contained an arbitration clause in Clause 2.23 which read as under:-

"2.23 SETTLEMENT OF DISPUTE: ARBITRATION

All disputes and differences of any kind whatever arising out of or in connection with the Contract or the carrying out of the works (whether during the progress of the works or after their completion and whether before or after the determination, abandonment or breach of the Contract) shall be referred to and whether before or after the determination, abandonment or breach of the Contract) shall be referred to and settled by the Architects who shall state his decision in writing. Such decision may be in the form of a final Certificate or otherwise. The decision of the Architects with respect to any of the excepted matters shall be final and without appeal as stated in the preceding Clause. But if either the Owner or the Contractor be dissatisfied with the decision of the Architects or any matter, question or dispute of any kind (except any of the excepted matters) or as to the withholding by the Architects of any Certificate to which the Contractor may claim (the owner of the Contractor) may within twenty-eight days after receiving notice of such decision give a written notice to the other party through the Architects requiring that such matters in dispute be arbitrated upon. Such written notice shall specify the matters which are in dispute and such dispute or difference of which such written notice has been given and no other shall be and is hereby referred to the Arbitration and final decision of a single Arbitration being a Fellow of the Indian Institute of Architects to be agreed upon and appointed both by the parties or in case of disagreement as to the appointment of a single Arbitrator to the Arbitration of two Arbitrators both being fellows of the Indian Institute of Architects, one to be appointed by each party, which Arbitrator shall before taking upon themselves the burden of reference appoint an Umpire.

The Arbitrator, the Arbitrators or the Umpire shall have power to open up, review and revise any Certificate, opinion, decision, requisition or notice, save in regard to the excepted matters in dispute which shall be submitted to him or them and of which notice shall have been given as aforesaid.

Upon every or any such reference in the cost of and incidental to the reference and Award respectively shall be in the direction of the Arbitration, or arbitrators or the Umpire who may determine the amount thereof, or direct the same to be taxed as between attorneys and client or between attorneys and client or as between party and party, and shall direct by whom and to whom and in what manner the same shall be borne and paid. This submissions shall be deemed to be submission to Arbitration within the meaning of the Indian Arbitration Act 1940 or any

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