IN THE HIGH COURT OF JUDICATURE AT PATNA

REQ. CASE No.20 of 2009

HINDUSTAN CONSTRUCTION CO.LTD.

Versus

UNION OF INDIA

with

REQ. CASE No.19 of 2009

HINDUSTAN CONSTRUCTION CO.LTD.

Versus

UNION OF INDIA

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For the Petitioner: Mr Jayanta Mitre, Senior Advocate

Mr P.K.Dutte, Senior Advocate

Mr. Subhro Sanyal, Advocate

For the Respondent: Mr Mahesh Prasad

Standing Counsel Railways

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02/

13.11.2009

Both the matters arise out of the same agreement

between the same parties who are also parties in these two cases.

2. Heard learned counsel for the petitioner and the

respondent.

3. Request case no. 20 of 2009 has been filed on behalf of

the petitioner, which is a construction company, under section 11(6)

of the Arbitration and Conciliation Act,1996 (hereinafter referred to

as >the Act? for the sake of brevity) for appointment of Arbitrator for

determining the disputes and differences which have arisen between

the parties and were covered under the Arbitration Clause contained

in the contract between the parties and which are as follows:

<(i) What is the correct and proper

interpretation of the Price Variation Clause, being Clause

20 of the Special Conditions of the Contract (General)?

(ii) Whether it was the intention of the

parties, which intention can be inferred from the different

clauses of the contract, that in respect of abnormal and

unusual rise in the prices of the said materials, which

could not be covered by the Price Variation Clause, was to

be absorbed by the petitioner?

(iii) In a true and proper interpretation of

the contractual provisions, it could be contended that

whether to supply or not to supply the said materials was

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within the absolute discretion of the Respondent-

Railways?

(iv) Is the petitioner right in its contention

that on a correct interpretation of the relevant clauses of

the contract an obligation was cast upon the Respondent-

Railway to supply the said materials, when the same were

available with the Railways?

(v) Whether the petitioner is entitled to

claim a sum of Rs 3.78 crores from the respondent on

account of the escalation of steel as demanded in its letter

dated 8th September, 2005 and further sums till the

completion of the contract?

(vi) To that relief, if any, is the petitioner

entitled against the respondent?=

4. Learned counsel for the petitioner submits that clause 64

of the agreement which is detailed at page 228 of the brief is the

clause with regard to arbitration. Hence when there was abnormal

rise in the steel prices, not forseen at the time of bidding by any

means which has resulted in enormous additional cost to the

petitioner, the petitioner sent a letter dated 08.09.2005 (Annexure 13)

notifying its intention to commence arbitration on the matter of

dispute and requested the respondent to initiate necessary procedures

for constitution of arbitral tribunal.

5. The respondent vide their letter dated 28.02.2007

(annexure 15) sending a panel of four names, out of whom two were

to be selected by the petitioner. It transpires that the petitioner did

not make his choice and instead sent letter dated 30.04.2007

(annexure 14 ) to the respondent stating that since they had given

notice to the railway in that regard, they requested to amicably

resolve the matter under dispute.

6. The Respondent replied vide letter dated 25.09.2007

(annexure 16) stating that since the petitioner had not chosen any

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person from the panel sent by the respondent they had appointed a

tribunal of three persons and the petitioner