J U D G M E N T

% 05.08.2024

1. The Municipal Corporation of Delhi1 invited tenders for widening and improvement of the carriageway of roads passing between Blocks 8, 9 and 10, Phase-II, Kirti Nagar Industrial Area. The work was awarded to the respondent R & T Enterprises vide work order dated 23 November 2001. The period of the contract was ten months. It was to start on 3 December 2001 and was scheduled to complete on 2 October 2002, but was admittedly completed in December 2003.

2. Vide letter dated 18 July 2006, the respondent sought reference of the dispute to arbitration in terms of the Clause 25 of the

1MCD Agreement under which the work was carried out, which reads thus:

“CLAUSE 25 SettlementofDisputes &Arbitration Except where otherwise provided in the contract all questions anddisputes relatingtothemeaningofthespecifications, design, drawings and instructions here-in-before mentioned and as to the quality of workmanship or materials as used on the work or as to any other question, claim, right, matter or thing whatsoever in any way arising out of or relating to the contract, designs. drawings, specifications, estimates, instructions, orders or these conditions or otherwise concerning the works or the execution or failure to execute the same whether arising during the progress of the work or after the cancellation, termination, completion or abandonment thereofshall bedealt withas mentionedhereinafter:

(i) If the contractor considers any work demanded of him to be outside the requirements of the contract, or disputes any drawings, record or decision given in writing by the Engineer-in-Charge on any matter in connection with or arising out of the contract of carrying out of the work, to be unacceptable, he shall promptly within 15 days request the Superintending Engineer in writing for written instruction or decision. Thereupon, the Superintending Engineer shall give his written instructions or decision within a period of one month from the receipt of the contractor’s letter.

If the Superintending Engineer fails to give his instructions or decision in writing within the aforesaid period or if the contractor is dissatisfied with the instructions or decision of the Superintending Engineer, the contractor may within 15 days of the receipt of Superintending Engineer's decision, appeal to the Chief Engineer who shall afford an opportunity to the contractor to be heard, if the latter so desires, and to offer evidence in support of his appeal. The Chief Engineer shall give his decision within 30 days of receipt of contractors appeal. If the contractor is dissatisfied with this decision, the contractor shall within a period of 30 days from receipt of the decision, give notice to the Commissioner M.C.D. for appointment or arbitrator failing which said decision shall be final binding and conclusive andnot referableto adjudicationbythearbitrator.

(ii) Except where the decision has become final, binding and conclusive in terms of Sub Para (i) above disputes or difference shall be referred for adjudication through arbitration a sole arbitrator appointed by the Commissioner M.C.D. If the arbitrator so appointed is unable or unwilling to act or resigns his appointment or vacates his office due to any reason whatsoever another sole arbitrator shall be appointed in the manner aforesaid. Such person shall be entitled to proceed with the reference from thestageat whichit was left byhis predecessor.

It is a term of this contract that the party invoking arbitration shall give a list of disputes with amounts claimed in respect of each such dispute along with the notice for appointment of arbitrator and giving reference to the rejection by the Chief Engineerofthe appeal.

It is also a term of this contract that no person other than a person appointed by such Commissioner M.C.D. as aforesaid should act as arbitrator and if for any reason that is not possible, themattershall not bereferredtoarbitrationat all.

It is also a term or this contract that if co