1. The petitioner is a registered partnership firm. The petitioner is
engaged in the business of supply, erection, testing and commissioning
of overhead electrification projects for various railway divisions under
the Ministry of Railways. Pursuant to a notice inviting tender dated
October 15, 2020, the petitioner participated in the same. The letter of
acceptance was issued on October 15, 2020 to the successful bidder.
The contract was executed pursuant to the letter of acceptance. The
tender document provided that the same would be governed by Indian
Railway Standard General Conditions of Contract (GCC). Clause 64 of
the GCC provides for settlement of dispute by arbitration which is
quoted below:
"64.(1)(i) In the event of any dispute or difference
between the parties hereto as to the construction or
operation of this contract, or the respective rights and
liabilities of the parties on any matter in question,
dispute or difference on any account or as to the
withholding by the Railway of any certificate to which
the contractor may claim to be entitled to, or if the
Railway fails to make a decision within 120 days, then
and in any such case, but except in any of the "excepted
matters" referred to in Clause 63 of these conditions, the
contractor, after 120 days but within 180 days of his
presenting his final claim on disputed matters shall
demand in writing that the dispute or difference be
referred to arbitration."
2. The jurisdiction of the Court was to be determined by the division or
where the headquarters were situated. It is submitted that in this case
the headquarter is at Garden Reach and the division of South Eastern
Railways is at Kharagpur. Thus, this Court has jurisdiction to entertain
the application.
3. According to the petitioner, due to failure on the part of the respondent
to adhere to the terms and conditions of the contract and failure to offer
clear site, the work could not be executed. Ultimately, this led to
termination of the contract. Disputes have arisen not only on account
of termination, but also on account of non-payment of bills which were
claimed on account of price variation, non-refund of the security deposit
and non-refund of the bank guarantee which was provided by the
petitioner towards performance guarantee.
4. Mr. Tiwari, learned senior advocate for the respondent, raises an
objection with regard to maintainability of this application on the
ground that the denial of the claim was sometime in 2022 and this
application has been filed in February 2026. It is next contended that
the claim of the petitioner falls within the excepted matters and as such,
the dispute is not arbitrable.
5. The tender document refers to the GCC. The GCC contains an
arbitration clause for settlement of disputes between the parties.
Whether the entire claim of the petitioner falls within the excepted
matters or not is a factual dispute, which has to be decided by the
learned arbitrator. The question of maintainability of this application as
raised by Mr. Tiwari is not entertained at this stage as it appears that
the authority had proceeded to take steps for appointment of arbitrator
and had also requested the petitioner by a letter dated January 30,
2025 to sign a waiver clause with regard to non-applicability of the
provisions of Section 12(5) and Section 31A(5) of the Arbitration and
Conciliation Act, 1996. The records further reveal that the
communications between the parties had also continued in the
interregnum. Thus, the issues raised by Mr. Tiwari on the point of
limitation, arbitrability of the dispute, jurisdiction, admissibility of the
claim etc. and whether any claim of the petitioner falls within the
excepted matters can be urged before the learned arbitrator.
6. The application is allowed.
7. Although, the arbitration clause provides for a panel of three
arbitrators, the parties consent to appointment of a sole arbitrator.
Moreover, appointment of an arbitrator from the curated panel of the
respondent is no longer permissible in law.
8. Upon recording such consent, Justice Samapti Chatterjee, former judge
of this Court, is appointed as the arbitrator to arbitrate upon the
disputes between the parties. This appointment is subject to
compliance of Section 12 of the Arbitration and Conciliation Act, 1996.
The learned Arbitrator shall fix her remuneration in terms of the
Schedule of the Act. All questions with regard to arbitrability of the
dispute, admissibility of the claim, limitation etc. are kept open to be
decided by the learned arbitrator, if raised.
9. The application is disposed of.
(SHAMPA SARKAR, J.)
B.Pal/S.Kumar
