O.M.P(T)(COMM) 28/2020

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IN THE HIGH COURT OF DELHI AT NEW DELHI

Date of Decision:- 10.07.2020

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O.M.P(T)(COMM) 28/2020

RAIL VIKAS NIGAM LTD.

.....Petitioner

Through:

Mr.Udit Seth, Adv.

versus

SIMPLEX INFRASTRUCTURES LTD

.....Respondent

Through:

Ms.Aanchal Mullick, & Mr.Pranjit

Bhattacharya, Advs.

CORAM:

HON'BLE MS. JUSTICE REKHA PALLI

REKHA PALLI, J (ORAL)

1.

The present petition preferred under Section 14 of the

Arbitration and Conciliation Act, 1996 (hereinafter referred to as ‘the

Act’) seeks termination of the mandate of the 3-member Arbitral

Tribunal constituted to adjudicate the disputes between the parties, on

the ground that the Tribunal has willfully disregarded the ceiling

provided in Schedule IV of the Act while fixing its fee.

2.

The petitioner Rail Vikas Nigam Limited is a public sector

undertaking engaged in the business of railway construction projects

for the Indian Railways. On 27.09.2010, the petitioner issued an

Invitation to Bid for construction of Viaduct and related works for

4.748 km length in Joka-BBD Bag Corridor of Kolkata Metro Railway

Line, excluding the station areas from Ch.1250 to Ch.4128.00 between

Joka to Behala Chowrasta including Depot Approach at Joka. In

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response thereto, the respondent submitted its bid which was accepted

by the petitioner by way of the letter dated 28.12.2010. Shortly

thereafter, on 28.01.2011, the parties executed a formal contract to

carry out the work, however the date of commencement was taken as

the date on which the Letter of Acceptance was issued, i.e.,

28.12.2010.

3.

Initially, as per the terms of the contract, the project was

earmarked for completion on 27.06.2013, but for various reasons the

original schedule could not be adhered to and the project completion

date kept being extended. Finally, on 20.11.2017, the respondent

completed the construction work as outlined in the Scope of Work in

the contract dated 28.01.2011. However, since the respondent claimed

that the petitioner’s failure to discharge its obligations under the

contract in a timely manner delayed the contract from a 30-month long

to an 84-month long project, it sought cost escalation from the

petitioner. Since repeated claims in this regard went unanswered, the

respondent invoked arbitration under Clause 17.3 of the General

Conditions of Contract (GCC) but the petitioner failed to appoint its

nominee arbitrator. Resultantly, the respondent approached this Court

by way of Arb. Pet. 519/2018 which was allowed on 11.12.2018. This

Court appointed Hon’ble Mr. Justice Swatanter Kumar (Retd.) as the

nominee arbitrator on behalf of the petitioner herein with a specific

direction that the fee of the learned arbitrator would be fixed as per

Schedule-IV appended to the Act.

4.

In its first sitting which took place on 15.01.2019, the learned

Tribunal recorded that its fee would be assessed as per Schedule IV to

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the Act. The parties completed all pleadings thereafter and made part

payment towards fees. On 09.01.2020, in its 8th sitting, the Tribunal

extended the time for rendering an award by six months with the

consent of the parties, and after observing that only two installments of

Rs.5 lakh each had been paid towards arbitrators’ fee, directed the

parties to pay the outstanding dues which, in terms of Schedule IV to

the Act, was observed as Rs.49,87,500/-. Consequently, the parties

were granted four weeks’ time to pay the fee.

5.

Aggrieved by the fixation of fee, the petitioner preferred an

application before the learned Tribunal on 27.02.2020 averring that the

fee fixed exceeds the statutory ceiling limit of Rs.30,00,000/-

prescribed in Schedule IV of t