IMPORTANT POINT
The arbitration clause survives the expiration of the main contract, and issues of limitation must be decided by the Arbitral Tribunal.

ORDER :

1. Mr. Paras Kuhad, learned Senior Counsel representing Mr. Tarun G. Reddy, learned counsel for the applicant. Mr. Vedula Venkataramana, learned Senior Counsel representing Mr. P. Sri Harsha Reddy, learned counsel for the respondent.

2. This arbitration application under Section 11(5) and (6) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as, “the Arbitration Act”), has been filed to appoint a nominee arbitrator on behalf of the respondent for adjudication of the claims and disputes between the applicant and the respondent as per Clause 16.2 of Article 16 of the Agreement for Development & Raising Contract between Uranium Corporation of India Limited and SMS Infrastructure Limited (Contractor) for Tummalapalle Project, dated 06.02.2008.

3. Facts leading to filing of this application briefly stated are that the applicant is a Private Limited Company incorporated under the provisions of the Companies Act, 1956. The respondent is also a company registered under the Companies Act, 1956 and is a Public Sector Undertaking under the Department of Atomic Energy, Government of India and has the exclusive rights to undertake activities for mining and processing uranium in India. The respondent has several operating underground mines, processing plants, bi-product recovery plants and plays a significant role in generation of Nuclear Power in India.

4. The parties entered into an agreement dated 06.02.2008 captioned as “the Agreement for Development & Raising Contract between Uranium Corporation of India Limited and SMS Infrastructure Limited (Contractor) for Tummalapalle Project” (hereinafter referred to as, ‘the Agreement’). Under the aforesaid Agreement, the applicant was entitled to undertake mining activities in the area of Tummalapalle as defined in the Agreement for a period of eight years. The total value of the Agreement was determined at Rs.626,04,44,749.53 crores (Rupees six hundred and twenty six crores four lakhs forty four thousand seven hundred and forty nine and fifty three paise only). It is the case of the applicant that even though the respondent asked the applicant to deviate from the terms specified in the Agreement on several occasions, the applicant completed the obligations under the Agreement as per the timelines and specifications provided in the Agreement. However, it is the case of the applicant that while doing so the applicant incurred additional expenditure which was brought to the notice of the respondent.

5. The applicant issued a letter dated 08.06.2023 with regard to its claims which was placed before the Chairman and Managing Director of the respondent, wherein a request was made to settle the claims of the applicant. It was further stated in the aforesaid communication that if disputes are not settled amicably, the applicant reserves the right to initiate arbitration proceedings. Despite receipt of the aforesaid letter, the respondent neither responded to the communication dated 08.06.2023 nor came forward for amicable settlement of the disputes.

6. Thereupon the applicant initiated arbitration proceedings and by notice dated 17.07.2023, Mr. Justice A.K. Sikri, Former Judge of Supreme Court, was appointed as its nominee for Arbitral Tribunal and called upon the respondent to nominate its nominee arbitrator within a period of thirty days so that the arbitration proceedings could be initiated. The respondent neither responded to the aforesaid notice nor nominated its nominee arbitrator as required under Clause 16.2 of Article 16 of the Agreement. Thereupon the applicant approached this Court by filing this application under Section 11(5) and (6) of the Arbitration Act.

7. Learned Senior Counsel for the applicant submitted that Section 11 of the Arbitration Act confines the jurisdiction of the Court for examination of the existence of arbitration agreement and the applicant is only required to furnish prima facie proof of existence of arbitration agreement. It is further submitted