Maytas-Rithwik (Jv) vs Konkan Railway Corporation Ltd.
2016 Latest Caselaw 3585 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                        Order delivered on: 13th May, 2016

+              O.M.P. (T) No.31/2015 & I.A. No.15343/2015

       MAYTAS-RITHWIK (JV)                                       ..... Petitioner
                     Through                  Mrs.Kiran Suri, Sr.Adv. with
                                              Mr.Purvesh Buttan, Mr.Gautam
                                              Kumar & Mr.Fahad Imtiaz, Advs.

                              versus

       KONKAN RAILWAY CORPORATION LTD.         ..... Respondent
                    Through   Ms.Kiran Bhagalia, Adv. Mr.Vinay
                              Navare & Mr.Keshav Ranjan,
                              Advs.

+              Arb. P. No.392/2015 & I.A. No.14314/2015

       MAYTAS-RITHWIK (JV)                                       ..... Petitioner
                     Through                  Mrs.Kiran Suri, Sr.Adv. with
                                              Mr.Purvesh Buttan, Mr.Gautam
                                              Kumar & Mr.Fahad Imtiaz, Advs.

                              versus

       KONKAN RAILWAY CORPORATION LTD.         ..... Respondent
                    Through   Ms.Kiran Bhagalia, Adv. Mr.Vinay
                              Navare & Mr.Keshav Ranjan,
                              Advs.

       CORAM:
       HON'BLE MR.JUSTICE MANMOHAN SINGH

MANMOHAN SINGH, J. (ORAL)

1. By this order, I propose to decide the abovementioned two petitions. The first petition being O.M.P. (T) No.31/2015 has been filed by the petitioner under Sections 14 and 15 of the Arbitration and Conciliation Act, 1996 with the prayer that the mandate of the

Arbitral Tribunal be terminated and a retired Judge of this Court be appointed as a presiding Arbitrator in the facts and circumstances of the case. The second petition being Arb. P. No.392/2015 has been filed by the same petitioner under Section 11(6) of the Act for appointment of a retired Judge of this Court as Presiding Arbitrator.

2. Earlier, the Presiding Arbitrator in the matter was Mr.B.P. Awasthi, Chief Engineer, Office of GM Northern Railway, Room-430, Annexe-I, Baroda House, New Delhi-110001.

3. Notices of both the petitions were issued to the respondent.

4. Brief facts as stated in the petitions are that the contract for construction of civil works including major bridges (RCC Sub Structure Only, RCC Box Culverts, RCC arch bridges), earthwork in embankment and cutting, feeder roads, protection and allied works between 30/000 Km. to 50/400 Km. of single B G Line on the Katra- Laole section under USBRL project was awarded by the respondent to the petitioner viz. M/s. CEC-Maytas-Rithwik (JV), a Joint Venture of M/s. Continental Engineering Corporation, Taipi, Maytas Infra Private Limited, Hyderabad and Rithwik Projects Limited, Hyderabad, vide letter No.KR/PD/J&K/CONT/MB/Km 30-50.4/7/2006 dated 21st October, 2006 at the total cost of Rs.227,90,81,048/- and with the stipulated completion time of 28 months from the date of issue of the acceptance letter i.e. 26th October, 2006 and the contract agreement was signed on 11th November, 2006.

5. During the continuance of the project, there arose certain disputes and differences amongst the petitioner and the respondent. Thus, the petitioner submitted its first claim for Rs.162.86 Crores vide letter dated 26th February, 2010. However, the respondent

rejected the claim vide letter dated 27th February, 2010 alleging that claims are not admissible.

6. On 30th July, 2010, the Arbitral Tribunal was constituted with three Arbitrators namely, Sh.Shyam Lal Verma, Sh.S.P. Virdi and Sh.Alok Kansal by the respondent to resolve the disputes arising in and out of the contract. The petitioner submitted statement of facts and claims along with the copy of the Contractual Agreement before the Arbitral Tribunal by letter dated 23rd May, 2011. After six months thereof, the Presiding Arbitrator Sh.Shyam Lal Verma tendered his resignation from the Arbitral Tribunal, thus, the first Arbitral Tribunal lost its existence. Thereafter, the Arbitral Tribunal was reconstituted by the respondent on 24th January, 2012 and Sh.Jitender Kumar was appointed as the Presiding Arbitrator in place of Sh.Shyam Lal Verma who had resigned. Sh.Jitender Kumar, the Presiding Arbitrator also tendered his resignation from the Arbitral Tribunal on 15th February, 2012 without conducting any hearing. Thereafter, on 9th May, 2012 the respondent once again reconstituted the Arbitral Tribunal and appointed Sh.S.B. Ninave as Presiding Arbitrator, who also tendered his resignation on 25th May, 2012. Thereafter, Sh.Malkiat Singh Lakha was appointed by the respondent as Presiding Arbitrator by letter dated 9th June, 2012. On 24th August, 2012 the first preliminary hearing of the said Arbitral Tribunal was held at Delhi in the chamber of the Presiding Arbitrator besides one another meeting on 21st December, 2012. The third hearing of the arbitration was scheduled to be held on 18th January, 2013 but the same was postponed till further orders by letter dated 27th December, 2012. Later on, Sh.Malkiat Singh Lakha also tendered his resignation on 3rd April, 2013. Yet once again the

Arbitral Tribunal was reconstituted by the respondent by letter dated 25th April, 2013 and Sh.B.P. Awasthi was appointed as the Presiding Arbitrator.

7. On 28th June, 2013, the petitioner requested the Arbitral Tribunal to expedite the hearings and to resume and finalise the arbitration proceedings at the earliest possible time. The C.E. Works and Planning of the respondent on 3rd July, 2013 also made the same request. Since nothing was heard and no action was taken on the earlier request letter, the petitioner once again by its letter dated 16th August, 2013 requested the Arbitral Tribunal to resume the proceedings and finalize the same.

8. On 23rd August, 2013, the petitioner received a communication from the Presiding Arbitrator, intimating that the proceedings would be held on 5th September, 2013 at N.R. HQ. Baroda House, New Delhi and in the said meeting, the petitioner presented in brief the history of the work covered by the Contract and the next hearing was proposed to be held at the same venue for 18th and 19th of October, 2013 at 10:30 a.m. and 2:30 p.m. On the said dates, the petitioner amongst other submissions also started claim-wise arguments but could not complete his arguments as it was proposed that the arguments would continue on the next date of hearing proposed to be held on 10th and 11th of December, 2013 at 10:30 am on both the days. However, on 22nd November, 2013, the petitioner received a letter whereby it was informed that the arbitration hearing fixed for 10th and 11th December, 2013 stood cancelled due to the non-availability of the Arbitrator without their being any indication for the next date of hearing and till the date of filing of the petition, the next date of hearing was awaited.

9. The petitioner submits that the arbitration initiated in 2010 is a non-starter till date. The petitioner has waited for five years for the completion of the arbitration by the Arbitrators appointed under the appointment procedure which requires the serving officers to be appointed. The Arbitral Tribunal has failed to act without undue delay and are unable to perform their functions. Thus, the present petition has been preferred for seeking declaration of termination of mandate of Arbitral Tribunal and for appointment of an independent Arbitrator.

10. The respondent was duly served. Learned counsel for the respondent has made her submissions only on the issue of territorial jurisdiction. Her submission is that prior to these petitions, the petitioner has also filed a petition under Section 9 of the Act before the High Court of Judicature at Bombay, in order to secure subject matter of arbitration proceedings being the contract dated 11 th November, 2006. Therefore, the present two petitions were supposed to be filed in the same Court, i.e. High Court of Judicature at Bombay, otherwise it would violate Section 42 of the Act. But counsel fairly stated upon instructions that once this Court finds that it has jurisdiction, then the prayer made in the petitions be allowed.

11. Learned Senior counsel appearing on behalf of the petitioner submits that the reliefs sought in the present petitions are different than the prayer made in the above said petition filed under Section 9 of the Act. Section 14 petition is filed by the petitioner, mainly, on the reason that five times the Arbitral Tribunal was constituted at the instance of the respondent but no effective proceedings were conducted for the last more than 4 years. The second petition is for appointment of a retired Judge as the Presiding Arbitrator.

12. As per settled law, Section 42 would not apply in the execution applications. The same also would not have any application in the petition filed under Section 11 of the Act as per the scheme of the Act, once it is agreed by the parties in the agreement that the arbitration proceedings shall be conducted in Delhi, coupled with the fact that if there is cause of action arisen in favour of the petitioner.

13. In the present case, as per Clause 6.3.5 of the Contract Agreement dated 11th November, 2006, it was agreed between the parties that the Arbitral Tribunal would conduct the arbitration proceedings at Mumbai/Delhi/any convenient place. Learned counsel for the respondent is agreeable for the same. As a matter of fact, few meetings were also held at Delhi. It is also settled law that Section 42 would not apply to the execution application. Section 11 is an independent proceeding than Section 9 of the Act.

14. Under these circumstances, the prayer made in the petition under Section 11(6) is allowed. Justice B.N. Srikrishna, retired Judge of the Supreme Court (Phone No.022-24096488/24096537) is appointed as the Presiding Arbitrator. It is agreed that the Arbitral Tribunal shall continue the proceedings from the stage from where the earlier Arbitrator has left the same. It will be the option of the Arbitral Tribunal to conduct the arbitration proceedings either in Mumbai or Delhi, as agreed by the parties. The fee of the Presiding Arbitrator shall be paid as per the schedule of the amended Act.

15. Liberty is granted to the parties to move an application for an interim measure before the Arbitral Tribunal who will decide the same in accordance with law.

16. Both the petitions are accordingly disposed of.

17. The Registry to hand over the record already submitted by the earlier Presiding Arbitrator Mr.B.P. Awasthi by letter dated 21st September, 2015 to the new Presiding Arbitrator appointed by this Court.

18. Copy of this order be given dasti to the learned counsel for the parties and a copy thereof be delivered to the learned Presiding Arbitrator forthwith.

(MANMOHAN SINGH) JUDGE MAY 13, 2016