IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD
J.Sreenivas Rao, J.
Sri Sai Krishna Construction - Appellant
Versus
Harvins Constructions Pvt.Ltd. - Respondent
Arbitration Application No. 186 of 2022
Decided On : 04-07-2023
The applicant, a partnership firm, sought the appointment of a sole arbitrator to adjudicate disputes with the respondent, a private limited company, regarding various civil engineering works. The respondent denied the claims and counter-claimed for a separate amount. The court considered whether a single arbitration application for 9 sub-contract agreements was maintainable and concluded that it was not, as the contracts were separate and distinct, and did not arise from a single commercial project. The application was dismissed on the ground of maintainability.
JUDGMENT
J.SREENIVAS RAO, J. - The applicant filed this application under Sec. 11(5) and (6) of the Arbitration and Conciliation Act, 1996 read with Scheme for Appointment of Arbitrator, 1996 (for short, 'the Act') to appoint a sole arbitrator to adjudicate the claims and disputes between the applicant and the respondent. Factual matrix
2. The applicant is a partnership firm registered with Registrar of Firms, Hyderabad, under Indian Partnership Act, 1992. The applicant firm is in the business of civil engineering and undertakes and executes all kinds of contracts for civil engineering works with specialization in irrigation projects. The applicant submits that the respondent is a private limited company doing the business of procuring civil engineering works by obtaining tenders from the public works departments and get the work executed by engaging specialists in the field on sub-contract basis or on the basis of independent contractor. The applicant further submits that her husband and managing director of the respondent company are close relatives, with that rapport respondent engaged the applicant to execute various irrigation contract works numbering 10 procured through tenders since 2011. The respondent entrusted the said contract works to the applicant on a back-to-back basis. The respondent has engaged the applicant as a sub-contractor by duly executing sub-contract agreements for nine works out of ten works. For one work viz., Telugu Ganga Project granted by erstwhile Andhra Pradesh Government, the sub- contract between respondent and the applicant is established by correspondence and business communication between applicant firm and respondent company and with the concerned irrigation department.
2.1. The details of the works entrusted by the respondent to the applicant as below:
a) Gajuladinee Project under Sub-contract agreement dtd. 3/10/2011. Nature of the work is modernization of SanjiviahSagar (GajulaDinne) Medium Irrigation Project in Kurnool district under JICAprogramme. The cost of project or value of the contract is Rs.43,19,23,482.00. b) Kanchi Project - Ranchi under Sub-contract agreement dtd. 18/7/2013. The nature of the work is restoration work including lining of main canal and Restoration work of Baranda&Adradih Branch Canal under Kanchi Weir Scheme. The cost of the project or value of the contract is Rs.37,12,66,519.00.
c) Kokro project - Ranchi under Sub-contract agreement dtd. 18/7/2013. The nature of the work is restoration work including lining and repair of structures of Kudadih Branch Canal and Sonahatu Distributaries under KOKRO irrigation scheme. The cost of the project or value of the contract is Rs.8,38,96,566.00.
d) Jamshedpur-Reach-1 under Sub-contract agreement dtd. 19/3/2014. The nature of the work is Construction of earth work. P.C.C. Lining, WBM Road and all structures from Km.29.35 to Km.36.00 of Gulidih Left Main Canal. The cost of the project or value of the contract is Rs.36,95,05,498.00.
e) Jamshedpur-Reach-2 under Sub-contract agreement dtd. 19/3/2014. The nature of the work is Construction of earth work. P.C.C. Lining, WBM Road and all structures from Km.36.00 to Km.42.60 of Gulidih Left Main Canal. The cost of the project or value of the contract is Rs.37,00,99,149.00. f) Jamshedpur-Reach-3 under Sub-contract agreement dtd. 19/3/2014. The nature of the work is Construction of earth work. P.C.C. Lining, WBM Road and all structures from 42.60 to 49.30 km of Gulidih Left Main Canal. The cost of the project or value of the contract is Rs.36,54,75,955.00.
g) Jamshedpur-Reach-4 under Sub-contract agreement dtd. 19/3/2014. The nature of the work is Construction of earth work. P.C.C. Lining, WBM Road and all structures from 49.30 Km to 56.00 Km of Gulidih Left Main Canal. The cost of the project or value of the contract is Rs.44,14,54,166.00. h) LMC& RMC - Karim Nagar - package-1 under Sub- contract agreement dtd. 3/10/2011. The nature of the work is investigation, Design and executio
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A single arbitration application for multiple sub-contract agreements is not maintainable when the contracts are separate and distinct, and do not arise from a single commercial project.
The main legal point established in the judgment is that while a single petition under Section 11 (6) of the Arbitration and Conciliation Act, 1996 may be maintainable when the work of the parties is....
The main legal point established in the judgment is the determination of the permissibility of a composite arbitral reference for disputes arising from two separate contracts under the Arbitration an....
The court emphasized the importance of adopting a simple, unambiguous, and uncomplicated procedure for dispute resolution through arbitration in respect of inter-related contracts with different part....
The Court's decision emphasizes the need to examine each agreement independently for the existence of an arbitration agreement, and the importance of demonstrating the intention of the parties regard....
The main legal point established in the judgment is that the venue of arbitration specified in the contract determines the jurisdiction of the court to entertain applications for the appointment of a....
Disputes arising from separate contracts necessitate distinct arbitration references as mandated by rules; failure leads to award invalidation.
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