Punj Lloyd Ltd. And Another vs National Highway Authority Of ...
2009 Latest Caselaw 5076 Del

*       IN THE HIGH COURT OF DELHI AT NEW DELHI

+               ARBITRATION PETITION NO.173/2008

PUNJ LLOYD LTD. AND ANOTHER            .. APPLICANTS
                   Through: Mr.Dhirendra Negi, Advocate

                                   VERSUS

NATIONAL HIGHWAY AUTHORITY
OF INDIA                                .. RESPONDENT
                    Through: Mr.Sumit Gahlawat, Advocate
CORAM
HON'BLE THE CHIEF JUSTICE

                                   ORDER

% 8.12.2009

1. This is an application under Section 11 of the Arbitration

and Conciliation Act, 1996 to appoint an independent person as

presiding arbitrator and thereby constitute an arbitral tribunal.

2. The facts giving rise to this petition are as follows:

The joint venture formed by applicants in the name of "Punj

Lloyd Ltd. - Progressive Constructions Ltd. JV" had entered into a

contract dated 8th October, 2001 for construction of an access

controlled four lane divided carriageway with six lane structures

of Jaipur Bypass, Phase II, Zone D, 34.7 KM long, KM 220 of NH-8

(Delhi-Jaipur road) at Chandwaji and KM 246 of NH-11 (Jaipur-

Sikar Road) at Harmara.

3. Certain disputes arose in the course of the execution of the

contract and the applicants took recourse to provisions of the Arbitration Petition No.173/2008 page No.1 of 4. arbitration agreement contained in clause 67.3 of the contract.

The relevant portion of clause 67.3 is reproduced below:

"Sub-Clause 67.3: Arbitration This Sub-Clause shall read as below: Any dispute in respect of which the decision, if any, of the Engineer has not become final and binding pursuant to Sub-Clause 67.1, shall be finally settled as set forth below:

i) the dispute with the Contractor, whether Indian or foreigner, shall be finally settled by arbitration in accordance with the Indian Arbitration and Conciliation Act, 1996, or any statutory amendment thereof. The arbitration tribunal shall consist of three arbitrators, one each to be appointed by the Employer and the Contractor; the third arbitrator shall be chosen by the two Arbitrator so appointed by the parties and shall act a presiding Arbitrator. In case of failure of the two Arbitrator, appointed by the parties, to reach upon a consensus within a period of 28 days from the appointment of the Arbitrator appointed subsequently, the Presiding Arbitrator shall be appointed by the President, Indian Road Congress. For the purposes of this Sub-Clause, the term "Indian Contractor" means a Contractor who is registered in Indian and is a juidic person created under Indian Law as well as a joint venture between such a Contractor and a foreign Contractor."

4. On October 16, 2007, the applicants, in accordance with the

above clause, gave notice of commencement of arbitration and

appointed Mr.V.K. Shrotriya as their nominee arbitrator. On

November 13, 2007, the respondent appointed Mr.K.K. Verma as

its nominee arbitrator. As per the agreement, the third arbitrator

was to be chosen by the two arbitrators appointed by the parties

and in case of failure of the two arbitrators appointed by the

Arbitration Petition No.173/2008 page No.2 of 4. parties to reach upon a consensus within 28 days from the

appointment of the arbitrator appointed subsequently, the

presiding arbitrator was to be appointed by the President, Indian

Roads Congress. It is seen from the records that the second

arbitrator Mr.K.K. Verma claimed that one Mr.G.S. Tawarmalani

has been appointed as presiding arbitrator with the consent of

the first arbitrator. The first arbitrator, however, has taken a

consistent stand that he had not given his consent for

appointment of Mr.Tawarmalani as the presiding arbitrator. On

the other hand, according to him during the discussions between

the two nominee arbitrators, he had suggested three other

names to the second arbitrator for appointment of the presiding

arbitrator. It is seen that thereafter a considerable

correspondence was exchanged between the parties. The

applicants had also approached the President, Indian Roads

Congress for appointment of the presiding arbitrator but due to

the objection raised by the respondent - NHAI, the Indian Roads

Congress returned the request for appointment of the presiding

arbitrator.

5. I have heard the counsel appearing for both the parties. A

preliminary objection is raised by the counsel for the respondent

about the maintainability of the petition on the ground that this

Court has no territorial jurisdiction to entertain the petition as the

subject matter of the dispute is situated at Jaipur, Rajasthan and

Arbitration Petition No.173/2008 page No.3 of 4. payments were also made at Rajasthan. This objection is without

any merit inasmuch as the tender for work in question was

floated in Delhi, the pre-bid meeting for the works was held at

Delhi, the letter accepting the bid was also issued from Delhi and

the agreement between the parties was also signed at Delhi.

Thus substantial part of the cause of action has taken place in

Delhi.

6. After hearing the counsel appearing for the parties I am

satisfied that this is a fit case to direct the President, Indian

Roads Congress to appoint the presiding arbitrator in accordance

with the provisions of clause 67.3 of the contract. The President,

Indian Roads Congress, Kama Koti Marg, Sector 6, R.K. Puram,

New Delhi is hereby directed to consider the request of the

applicants for appointment of the presiding arbitrator afresh and

make the appointment of presiding arbitrator within a period of

four weeks from the date of communication of this order.

7. The Registry is directed to forward a copy of this order to

the President, Indian Roads Congress.

8. The petition stands disposed of in terms of the aforesaid

order.

Chief Justice 8th December, 2009 "nm"

Arbitration Petition No.173/2008 page No.4 of 4.