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2021 Supreme(Telangana) 239

IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD
Challa Kodanda Ram, J.
M/s Sri Avantika Contractors (I) Ltd. – Applicant
Versus
M/s National Buildings Construction Corporation Limited - Respondent
ARB.APPL Nos.85, 86 and 87 of 2019
Decided On : 30-07-2021

Advocates:
Advocate Appeared:
For the Applicant : Sri K.C. Reddy
For the Respondent: Sri T. Anand Subramaniam, for Vakil Associates

Headnote:

Arbitration and Conciliation Act, 1996 - Section 8, 2(1)(b), 2(1)(h), 61, 74, 30, 11 - Indian Evidence Act, 1872 - Code of Civil Procedure, 1908 - Section 89 - Arbitration Agreement - Appointment of independent Sole Arbitrator - Sole Arbitrator - Whether any arbitration agreement is said to have been come into existence merely on account of respondent seeking to resolve disputes amicably with respect to claims made by applicant by referring claims to a Conciliator - Whether, in facts of present case and in light of Agreement between parties, this Court has no jurisdiction to entertain an application made by applicant under Section 8 of Conciliation Act – Held, Court is concerned, argument of learned counsel for applicant that certain actions i.e., letter of award of contract was received by applicant at Hyderabad, same was accepted by signing and dispatching to registered office of applicant, men and machinery was mobilized from Hyderabad, bank guarantee was provided from a Bank at Hyderabad, all being within jurisdiction of Courts at Hyderabad, a part of cause of action is said to arise at Hyderabad and thus High Court of Telangana at Hyderabad has jurisdiction, is liable to be rejected in view of specific agreement between parties restricting jurisdiction to Court(s) at Delhi - Judgments relied on by learned counsel for respondent are squarely on point and same do not require much discussion - Arbitration applications are dismissed.

ORDER :

ARB.APPL No.85 of 2019 is filed seeking appointment of independent Sole Arbitrator for adjudication of dispute under LOA.No.NBCC/SBGINFRA/CIVIL/IDCT-RIHAND/2010/LOA-2228-1160/D.No.2226 dated 17/08/2010. ARB.APPL No.86 of 2019 is filed seeking appointment of independent Sole Arbitrator for adjudication of dispute under LOA.No.NBCC/SBG-I/CIVIL/IDCT-VINDHYACHA/2010/LOA-2228-1136/D.No.1405 dated 14.05.2010. ARB.APPL No.87 of 2019 is filed seeking appointment of independent Sole Arbitrator for adjudication of dispute under LOA.No.NBCC/SBG-I/CIVIL/IDCT-MOUDA/2010/LOA-2228-1129/D.No.1445 dated 19.04.2010.

2. As the applications are connected, they are taken up for disposal by this Common Order. At the request of the applicant’s counsel, the facts contained in ARB.APPL No.86 of 2019 are taken for discussion.

3. The brief facts which are not in dispute are that pursuant to the notice inviting tender for carrying out “Civil, Structural and Misc. Civil Works of Induced Draught Cooling Towers 11A, 11B, 12A, 12B, 2 Nos. Auxiliary tower and 1 No. Switch Gear Room Vindhyachal-STPP Stage-IV, (2x500 MW), Singrauli District, Madhya Pradesh”. The applicant was issued with a Work Order on 19.05.2010 followed with an entering into an Agreement on 22.11.2010. Disputes arose between the applicant and respondent in the course of, and in relation to, execution of the contract resulting in cancellation of the work order by letter dated 10.04.2013 and certain claims have been made by the applicant on the respondent under various Heads. In an effort to settle the disputes amicably, the respondent appointed one Sri K.B.Dubey, Former Director (Projects) NTPC, (hereinafter referred to as ‘conciliator’) on 09.12.2013, as sole conciliator to review the disputes/claims raised by the applicant in relation to the contract between the parties and to assist the parties in their attempt to reach an amicable settlement in an independent and impartial manner, and to submit a report to the respondent. The appointed conciliator submitted his report on 09.07.2014 opining certain claims to be admissible and certain other claims as not admissible. In relation to the claims which were not admitted by the conciliator and also certain other claims, the applicant vide letter dated 27.11.2017 requested the respondent to appoint a sole arbitrator under the Arbitration and Conciliation Act, 1996. The same was rejected by the respondent vide letter dated 17.11.2017 specifically refuting the claims. It was asserted that there being no provision for settlement of disputes through Arbitration, the demand for appointment of Arbitrator is not tenable; that condition No. 21 read with condition No.15 of Work Order dated 19.05.2010 and Article 5 read with Article 2 of the Agreement dated 22.11.2010 with regard to settlement of legal disputes, excludes jurisdiction of any other Court other than Courts at Delhi. In General Conditions of Contract which were made part of the letter of Award and the Agreement, Clause 76 providing for Arbitration specifically stands deleted.

4. Learned counsel Sri K.C. Reddy in an innovative and brief manner while making references to various documents/correspondence filed with the application, contends that notwithstanding there not being an Arbitration Clause in the Agreement, the fact that the disputes were referred to Conciliation invoking part-III of the Arbitration and Conciliation Act (for short, ‘the Act’), and the Conciliator had conducted the proceedings and submitted a report by making specific reference to the provisions of the Act more specifically Section 61 of the Act, and the same has resulted in an Arbitration Agreement coming into existence. As the conciliation which was conducted under the Act has failed, the natural consequence of such failure would result in the unsettled disputes to be settled through arbitration. Learned counsel would contend by making a reference to Section 74 of the Act, just like the settlement reached before the

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