THE HON’BLE SRI JUSTICE T. VINOD KUMAR ARBITRATION APPLICATION No. 158 of 2022

ORDER

1. The present Arbitration Application is filed under Section 11(5) & (6) of the Arbitration and Conciliation Act, 1996 (hereinafter 'the Act, 1996') for appointment of a sole arbitrator to resolve the disputes between the parties.

2. Heard Mr. G Purushotham Reddy, learned Counsel for the Applicant and Mr. S. Keshava Rao, learned Counsel for Respondent.

3. Case of the Applicant:

i. The Respondent is the main contractor for execution of project Kalwakurthy Lift Irrigation Scheme Package No.29, employed by the erstwhile state of Andhra Pradesh. The respondent herein vide Agreement No. MPL/CA/HYD/ KLIS/3/PRC/2007/0027 dated 06.09.2007 had allotted part of the work relating to package No.29 to the applicant herein. Subsequently, balance work vide amendment dated 17.09.2012 was also allotted to the applicant. The initial term of the agreement was 10 months under the agreement dated 06.09.2007 and 12 months under the amended agreement dated 17.09.2012.

ii. The stipulated timeline was delayed due to failure in handing over possession of land due to delays in land acquisition.

iii. Since, the contract is a piece rate contract, the applicant was required to submit interim bills for work done every month to the respondent. On receiving the same, the respondent was to make payment within seven (7) working days from the date of receipt of payment from the main employer. However, the respondent was always irregular in making payments to the applicant.

iv. That as the respondent had completely stopped making payments after 25.09.2018, the applicant herein had raised a dispute. In answer to the same it is contended that the respondent had for the first time raised the issue regarding delays in completing the work.

v. Ultimately, the respondent herein vide letter dated

27.05.2019 had terminated the contract without clearing the arrears due for the work done. As a result, the applicant herein had issued a demand notice dated 27.07.2020 for the said dues. In reply to the same the respondent herein had issued a legal notice vide 10.08.2020 denying the claims of the applicant.

vi. It is contended that on the applicant requesting the respondent to resolve the disputes as per the dispute resolution clause in the agreement dated 06.09.2007, the respondent herein vide letter dated 20.08.2020 had appointed one Mr. Vijay Shankar, hailing from Patna, Bihar as sole arbitrator to resolve the disputes between the parties.

vii. The present arbitration application is filed aggrieved by the unilateral appointment of the arbitrator by the respondent.

4. Case of the Respondent:

i. Per contra, learned Counsel for the respondent contends that after the respondent vide letter dated 27.05.2019 had terminated the agreement, there was no further communication between the parties. Thus, it is contended that as the present arbitration application was preferred in August, 2022, the same are ex-facie barred by limitation.

ii. Learned Counsel for the respondent further contends that the petitioner had initially filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016 before the National Company Law Tribunal, Hyderabad (for short ‘NCLT’) vide CP IB(No) 391/9/HDB/2020; that though the said application was ultimately withdrawn by the applicant on 16.06.2022, the applicant herein having approached the NCLT despite being aware of the arbitration clause cannot now claim any waiver of the time period spent before a wrong forum. Thus, it is contended that the present application is hopelessly barred by limitation and vitiated by latches. In support of his case, reliance is placed on the decision of this Court in Terra Infra Development Limited Vs. NCC Limited iii. Learned Counsel for the respondent further contends that Clause 21.3 in the agreement dated 06.09.2007 authorizes

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the respondent alone to appoint an arbitrator; and that the applicant herein having agreed t