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2025 Supreme(Online)(Cal) 2838

CALCUTTA HIGH COURT
RAVI KRISHAN KAPUR, J
THE EXECUTIVE ENGINEER, NATIONAL HIGHWAY DIVISION NO. IX – Appellant
Versus
M/s. DILIP KUMAR DAS AND SONS – Respondent
CO/76/2024|OC Execution no. 70/2017



Advocates:
For the Appellants/Petitioners: Mr. Joyjit Choudhury, Mr. Nabankur Paul
For the Respondents: Ms. Suman Sehanabis(Mandal)

The decision of a Dispute Review Expert cannot be treated as an arbitral award; thus, its enforcement through execution proceedings lacks jurisdiction.

Headnote:(A) Arbitration and Conciliation Act, 1996 - Sections 2(1)(a), 7, 31, and 36 - Jurisdictional issue - The execution of a decision made by a Dispute Review Expert cannot be treated as an arbitral award under the Act - The impugned decision fails to constitute an arbitral reference, rendering it unenforceable as a decree. (Paras 10, 11, 12)

(B) Arbitration Agreement - The contract’s dispute resolution clause does not equate to an arbitration agreement, thereby preserving the binding nature of the arbitration process. (Paras 12, 13)

Facts of the case:
The respondents, a successful bidder for a construction contract with the petitioner, initiated execution proceedings based on a decision by the Dispute Review Expert directing payment, which is contested on jurisdictional grounds by the petitioner.

Findings of Court:
The enforcement of the Dispute Review Expert's decision as an arbitral award undermines the statutory process, and such an attempt is legally untenable.

Issues: The core issue pertains to whether the decision of the Dispute Review Expert qualifies as an arbitral award under the Arbitration and Conciliation Act.

Ratio Decidendi: The court determined that the decision made by the Dispute Review Expert, lacking the essential features of arbitration and judicial adjudication, is unenforceable, and the execution proceedings initiated by the respondent were unsustainable.

Result: The impugned order dated 22 March, 2023 is set aside, and OC Execution case no. 70/2017 stands dismissed.

In the High Court at Calcutta Circuit Bench at Jalpaiguri CO/76/2024 THE EXECUTIVE ENGINEER, NATIONAL HIGHWAY DIVISION NO. IX AND ANR VS M/s. DILIP KUMAR DAS AND SONS Mr. Joyjit Choudhury, Mr. Nabankur Paul, ….for the petitioner.

Ms. Suman Sehanabis(Mandal), ….for the respondent.

The challenge in this revisional application is directed against an order dated 22 March, 2023 passed by the District Judge at Jalpaiguri in OC Execution no. 70/2017 “Arb”.

By the impugned order the District Judge has on an issue of maintainability, inter alia, directed that the decision of the Dispute Review Expert (Board) is to be treated as an arbitral award and has proceeded to execute the same. In this background, the applicant assails the impugned order dated 6 May, 2024 and raises a jurisdictional issue which goes to the root of maintainability of the Main Execution Case i.e EC No. 70/2017.

Briefly, the petitioner published a notice inviting offers for construction works in respect of National Highway-31. The respondent being the successful bidder was awarded the contract.

The mechanism for dispute resolution as contemplated under the contract is stipulated hereinunder: “24. Disputes “24.1. If the Contractor believes that a decision taken by the Engineer was either outside the authority given to the Engineer by the Contract or that the decision was wrongly taken, the decision shall be referred to the Dispute Review Expert within 14 days of the notification of the Engineer's decision.”

The general conditions of the tender also provide as follows:

ARBITRATION The procedure for arbitration will be as follows:

25.3 (a) In case of Dispute or difference arising between the Employer and a domestic contractor relating to any matter arising out of or connected with this agreement, such disputes or difference shall be settled in accordance with the Arbitration and Conciliation Act, 1996 . The parties shall make efforts to agree on a sole arbitrator and only if such an attempt does not succeed and the Arbitral Tribunal consisting of 3 arbitrators one each to be appointed by the Employer and the Contractor and the third Arbitrator to be chosen by the two Arbitrators so appointed by the Parties to act as Presiding Arbitrator shall be considered. In case of failure of the two arbitrators appointed by the parties to reach upon a consensus within a period of 30 days from the appointment of the arbitrator appointed subsequently, the Presiding Arbitrator shall be appointed by the Council, Indian Roads Congress.

(b) The Arbitral Tribunal shall consist of three Arbitrators one each to be appointed by the Employer and the Contractor. The third Arbitrator shall be chosen by the two Arbitrators so appointed by the Parties, and shall act a presiding arbitrator. In case of failure of the two arbitrators appointed by the parties to reach upon a consensus within a period of 30 days from the appointment of the arbitrator appointed subsequently, the Presiding arbitrator shall be appointed by the Council, Indian Roads Congress.

(c) If one of the parties fails to appoint its arbitrator in pursuance of sub-clause (a) and (b) above within 30 days after receipt of the notice of the appointment of its arbitrator by the other party, then the Council, Indian Roads Congress shall appoint the arbitrator. A certified copy of the order of the Council, Indian Roads Congress, making such an appointment shall be furnished to each of the parties.

(d) Arbitration proceedings shall be held in India, and the language of the arbitration proceedings and that of all documents and communications between the parties shall be English.

(e) The decision of the majority of arbitrators shall be final and binding upon both parties. The cost and expenses of Arbitration proceedings will be paid as determined by the arbitral tribunal. However, the expenses incurred by each party in connection with the preparation, presentation, etc. of its proceedings as also the fees and expenses paid to the arbitrator appointe

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