THE HON’BLE SRI JUSTICE T. VINOD KUMAR ARBITRATION APPLICATION No. 33 of 2021

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 an arbitrator to resolve the disputes between the parties.

2. Heard Sri. T. S. Anirudh Reddy, learned Counsel for the Applicant and Smt. K. Mamatha, learned Counsel for the Respondent.

3. The applicant is a company engaged in manufacture of Silt Flushing Tunnel (SFT). The Respondent herein was awarded ‘Construction of Barrage and Desilting Chamber (Balance Work) package for Tapovan Vishnugad Hydro Electric Power Project’, vide agreement No.CS5505905(RI)-2-CS-COA-5786 dated 27.08.2012 by the National Thermal Power Corporation Limited (NTPC). Subsequently, the respondent and the applicant herein entered into a “Sub Contract” agreement dated 26.04.2013.

4. It is contended by the applicant herein that disputes have arisen between the parties as the respondent herein apart from failing to adhere to its contractual obligations and clearing the outstanding bills raised by the applicant herein, had not only unilaterally issued the notice of termination dated 12.02.2014, but had also illegally encashed the bank guarantee of Rs. 87 Lakhs given by the applicant herein on the very same day i.e., 12.02.2014. 5. It is contended that, the applicant herein had then approached the High Court of Uttarakhand vide W.P. No.256 of 2017 for release of machinery and payment of dues; that the respondent herein in its counter to the aforesaid Writ Petition had raised a plea that it was appropriate to refer the disputes to arbitration as there existed a valid arbitration clause between the parties.

6. It is contended by the applicant that pursuant to the aforesaid Writ Petition, the applicant herein vide notice dated 06.07.2017 had invoked the arbitration clause inviting the respondent herein to appoint their arbitrator; that consequently, the applicant herein had filed Arbitration Application No.42 of 2018 before the High Court of Uttarakhand under Section 11 of the Act, 1996; and that the said application was dismissed as premature, granting liberty to the parties to make a fresh application as per Section 11 of the Act, 1996.

7. The applicant herein contends that subsequently, it had issued letter dated 07.11.2019 conveying that they had appointed Mr. Lakshmikanth Reddy Desai, Advocate as their arbitrator and had invited the respondent herein to appoint an arbitrator on their behalf. It is contended that the present arbitration application is filed since the respondent herein had failed to reply to the notice dated 07.11.2019.

8. Per Contra, the respondent herein raised the following preliminary objections apart from the other factual objections:

i. Firstly, though the respondent herein had terminated the Sub Contract agreement dated 26.04.2013 on 12.02.2014, the applicant herein had only chose to request the respondent to appoint an arbitrator after the lapse of three (3) years i.e., on 06.07.2017; that even assuming the notice of arbitration dated 06.07.2017 was issued within limitation, as the present arbitration application was filed only on 17.02.2021, the disputes are ex-facie time barred and moonshine.

ii. Secondly, it is contended that the instant arbitration application is not maintainable, as the applicant herein had initiated the instant proceedings without adhering to the waterfall mechanism contemplated under Clause 28 of the Sub Contract Agreement dated 26.04.2013.

iii. Lastly, it is contended that there are no arbitrable disputes as the applicant failed to submit his statement of issues before the conciliator, as a result of which the conciliation proceedings were closed on 08.10.2014.

9. In support of the above contention, reliance is placed on the decisions in Bharat Sanchar Nigam Ltd. and Ors. Vs. Nortel Networks India Pvt. Ltd, [(2021)5SCC738], Ravindra Kumar Verma Vs. BPTP Ltd., [(2015) 147 D