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2015 Supreme(MP) 357
MADHYA PRADESH HIGH COURT AT JABALBUR BENCH
Sanjay Yadav, J.
Unitech Limited - Appellant
Versus
Madhya Pradesh Rural Road Development Corporation - Respondent
Writ Petition Nos. 11029-13, 11201-13, 13482-13, 13488-13, 6405-13 and 7643-2013
Decided On : 09-02-2015
Important Points
Subject
Arbitration Law - Jurisdiction
Act Referred
CONSTITUTION OF INDIA : Art.1
Headnote
Arbitration - Jurisdiction - Arbitration and Conciliation Act, 1996 - Section 14(2), 16 - Madhya Pradesh Madhyastham Adhikaran Adhiniyam, 1983 - [Section 14(2), 16]
Fact of the Case:
The dispute arose from an agreement relating to a road construction project. The petitioner invoked the Arbitration Clause after failing to resolve the dispute amicably. The respondent objected to the jurisdiction of the arbitral tribunal under the 1996 Act, seeking termination of the tribunal's mandate.
Finding of the Court:
The court found that the objection to jurisdiction should have been raised before filing the defense and that the respondent's application for termination of the tribunal's mandate under Section 14(2) of the 1996 Act was not tenable. The court set aside the order and directed the matter to be decided by the arbitrator.
Issues: The main issue was whether the court had jurisdiction to terminate the authority of the arbitral tribunal under Section 14(2) of the 1996 Act, considering the earlier ruling in favor of continuation of the proceedings under Section 16(2) of the Act.
Ratio Decidendi: The court held that objections to the jurisdiction of the tribunal must be raised before filing the defense, and an application for termination of the tribunal's mandate under Section 14(2) of the 1996 Act was not tenable.
Final Decision: The court set aside the order and directed the matter to be decided by the arbitrator. The petitions were allowed to the extent mentioned, and no costs were awarded.
For the Petitioner: Dilip Parihar, learned counsel.
For the Respondents:Purushaindra Kaurav, learned Additional Advocate General along with Aditya Khandekar, G.S. Chauhanand Tabrej Sheikh, Advocates.
Sanjay Yadav, J.
1. Additional documents filed vide I.A. No. 1542/15 and I.A. No. 1543/15 in W.P. No. 11201/2013 and W.P. No. 11029/2013 respectively, are taken on record.
2. Arguments heard.
3. These batch of writ petitions are directed against an order dated 10.12.2012 passed by the Tenth Additional District Judge, Bhopal, entertaining an application under Section 14(2) of the Arbitration and Conciliation Act, 1996 (for brevity 1996 Act') and terminating the mandate of the Arbitrator holding that the dispute can only be resolved by the Tribunal constituted under the Madhya Pradesh Madhyastham Adhikaran Adhiniyam, 1983.
4. Relevant facts are taken from W.P. No. 6405/2013.
5. It being a matter of fact borne out from the record that the dispute between the parties emanates from the agreement relating to Package No. 5 : Rehabilitation and Strengthening of Vidisha-Korwai Section of SH 19 [Project Road No. 11].
6. The Agreement in question contains Arbitration Clause 67.4, which envisages -
"Any dispute in respect of which :
a) the decision, if any, of the Board has not become final and binding pursuant to sub-clause 67.2, and
b) amicable settlement has not been reached :
(i) In the case of dispute arising between the Employer and a domestic Contractor or between the Employer and a foreign Contractor who opts for the application of the Indian Arbitration and Conciliation Act, 1996 related to any matter arising out of or connected with this Contract, such disputes shall be referred to the award of two arbitrators (one each to be appointed by each party) and an Umpire to be appointed by the Arbitrators, or if there is no agreement, to be appointed by the Arbitration Committee of the Indian Council of Arbitration. The Indian Arbitration and Conciliation Act, 1996 the rules thereunder and any statutory modification or re-enactment thereof, shall apply to these arbitration proceedings; or (2) in the case of dispute arising between the Employer and a Foreign Contractor, by application of the UNCITRAL Arbitration Rules related to any matter arising out of or connected with this contract, such dispute shall be referred to the award of two Arbitrators (one each to be appointed by each party) and an Umpire to be appointed by the Arbitrators or if there is no agreement, to be appointed by the International Centre for Alternative Dispute Resolution (ICADR). The UNCITRAL Arbitration Rules shall apply to these arbitration proceedings.
(ii) Neither party shall be limited in the proceedings before the arbitrators to the evidence or arguments already put before the Engineer, for the purpose of obtaining his said decision. No such decision shall disqualify the Engineer from being called as a witness and giving evidence before the arbitrators or any matter whatsoever relevant to the dispute.
(iii) The reference to arbitration may proceed notwithstanding that the Works shall not then be or be alleged to be complete, provided always that the obligations of the employer, the Engineer and the Contractor shall not be altered by reason of the arbitration being conducted during the progress of the Works. Neither party shall be entitled to suspend the works and payment to the contractor shall be continued to be made as provided by the contract.
(vi) If one of the parties fail to appoint its arbitrators in pursuance of sub para (i) and (ii) above, within 60 days after receipt of the notice of the appointment of its arbitrators by the other party, then the Secretary General of the Permanent Court of Arbitration, the Hague, in the case of foreign contractors opting for the application of the UNCITRAL Arbitration Rules or the Ministry of Road Transport and Highways in the case of Indian Contractors, and the foreign contractors who opt for the application of Indian Arbitration and Conciliation Act, 1996, as the case may be, shall appoint the arbitrator. A certified copy of the Secretary General's order or Ministry of Road Transport and Highways order, as the case m
