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2021 Supreme(Online)(KER) 13642
HIGH COURT OF KERALA
P.V.ASHA, J
MARYMATHA INFRASTRUCTURE PVT. LTD – Appellant
Versus
STATE OF KERALA – Respondent
WP(C)/13396/2020
SRI.P.SHANES METHAR
The judgment established the principle that adjudicator decisions are binding unless legally challenged through defined arbitration processes, emphasizing adherence to contractual dispute resolution mechanisms.
Headnote:
Jurisdiction - Contractual Disputes - General Conditions of Contract Sections 24-26 - The court reinforced the binding nature of adjudicator decisions as per contractual provisions, emphasizing the enforcement of dispute resolution mechanisms before arbitration, along with emphasizing fair conduct and compliance with set timeframes for decisions.
Fact of the Case:
The petitioner, a contractor, challenged the appointment of a new adjudicator for disputes previously addressed, arguing that the existing adjudicator's decision was final unless overturned via arbitration, based on contract provisions outlining timelines and procedures for adjudication.
Finding of the Court:
The court noted that the adjudicator's past decisions were accepted without objection, affirming that the new appointment contradicted contractual terms. It emphasized that any challenges to an adjudicator's decision must follow arbitration procedures as stipulated in the contract.
Issues: Whether the appointment of a new adjudicator was permissible given the previous adjudicator's decision was contested and whether the court should intervene in contractual matters covered by specific dispute resolution procedures.
Ratio Decidendi: The decision underscored that contractual terms must be adhered to, particularly regarding adjudicator appointments and disputes, reinforcing that judicial review should not substitute the established arbitration processes defined in contract conditions.
Final Decision: The writ petition was dismissed, leaving all contentions raised open for future consideration.
JUDGMENT
The Writ Petition is filed seeking the following reliefs:
"i. Issue a writ of certiorari or other appropriate writ, order or direction calling for the original of Ext.P14 and quash the same.
OR
ii. Issue a writ of mandamus or other appropriate writ, order or direction commanding the respondents that the scope of new adjudicator appointed in terms of Ext.P14 will be limited to decide the disputes not covered by Ext.P10 and a further direction that the adjudicator appointed under Ext.P14 has no jurisdiction to re-agitate the disputes/matters covered by Ext.P10.
iii. Issue a writ of mandamus or other appropriate writ, order or direction commanding the respondents that the remedy against Ext.P10 shall be only in accordance with terms of Ext.P1 agreement.
iv. Issue such other appropriate writ order or direction that may be deemed to be just and equitable in the facts and circumstances of the case.”
2. The petitioner is a contractor, who was awarded the work of construction of a new bridge for diversion of traffic for safety of old barrage at Bhoothathankettu based on which Ext.P1 agreement was executed on 18.05.2016. The issue arising in the case relates to the award passed by an adjudicator appointed in terms of the provisions contained in the agreement. The conditions of contract which forms part of Ext.P1 agreement in clauses 24 to 26 provide that if the contractor disputes the decision of the Engineer it shall be referred to an Adjudicator within 14 days; the adjudicator shall give his decision within 28 days and either party can refer the decision of the Adjudicator to Arbitrator within 28 days and if not referred within 28 days, the adjudicator's decision would be final and binding. Clause 26 provides for appointment of a new adjudicator in the event of resignation, death or on agreement by both parties and on disagreement by one party by the appointing authority.
3. The details regarding the petitions submitted by the petitioner and the decisions on it by the Adjudicator as stated by the petitioner are as follows: On 04.01.2018 the petitioner submitted Ext.P5 petition before the Adjudicator, alleging delay in approval, changes in design, extra items, quantity, rate etc. The 2nd respondent filed Ext.P5(A) objection on 30.1.2018 and the adjudicator decided the issue on 12.2.2018 as per Ext.P5(B). Thereafter, the petitioner submitted Ext.P6 claim petition on 12.4.2018 and an updated statement Ext.P6(A) on 18.5.2018 and another updated claim statement Ext.P6(B) on 18.6.2018. After the adjudicator called for objections as per his letter dated 29.06.2018, the 2nd respondent filed objection on 15.09.2018. The adjudicator gave Ext.P8 decision on 03.12.2018 which was followed by Ext.P8(A) decision on 15.12.2018. On Ext.P9 updated petition submitted on 12.01.2019, the respondent submitted Ext.P9(A) objection on 02.03.2019 to which the adjudicator, after calling for supporting documents on 11.04.2019 and 12.04.2019 and after conducting a site visit on 17.12.2019 with intimation to both sides and conducting a hearing on 21.12.2019, gave his Ext.P10 decision on 20.01.2020.
4. Whileso, the 2nd respondent as per Ext.P11 letter dated 29.01.2020 informed the petitioner that they are appointing another adjudicator to decide the disputes. The petitioner objected to the same stating that a new adjudicator cannot be appointed on disputes covered by Ext.P10. However, the 2nd respondent, as per Ext.P13 letter dated 13.02.2020 requested the appointing authority to appoint a new adjudicator. According to the petitioner, the proceedings for appointment of a new adjudicator was contrary to the provisions contained in the agreement and even if the decision of the adjudicator is wrong, the remedy available for the respondent was to move for arbitration and not appointment of a new adjudicator. As per Ext.P14 letter dated 24.2.2020 the respondent intimated the appointment of new adjudicator. The petitioner objected to the same as per Ext.P15 letter on 10
