Delhi High Court
Innovators Facade Systems Pvt Ltd vs Airport Authority Of India on 30 October, 2017
$~20
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ ARB.P.211/2017
Date of decision : 30th October, 2017
INNOVATORS FACADE SYSTEMS PVT LTD .....Petitioner
Through Mr. S.Ravi Shankar, Ms.
Yamunah Nachiar and
Ms.Bhanu Kapoor, Advs.
versus
AIRPORT AUTHORITY OF INDIA ....Respondent
Through Mr. Digvijay Rai and Mr. Pulkit
Tyagi, Advocates
CORAM:
HON'BLE MR. JUSTICE NAVIN CHAWLA
NAVIN CHAWLA, J. (Oral)
1. The dispute between the parties have arisen under the work
order dated 14.11.2011. The said work order contains a dispute
resolution clause/arbitration work order in form of Clause 25. The
same is reproduced hereinbelow:-
"CLAUSE 25
Except where otherwise provided in the contract, all
questions and disputes relating to the meaning of the
specifications, design, drawings and instruction here-in
before mentioned and as to the quality of workmanship
ARB.P 211/2017 Page 1
or materials used on the work or as to any other
question, claim, right, matter or thing whatsoever, in any
way arising out of or relating to the contract, designs,
drawings, specifications, estimates, instructions, orders
or these conditions or otherwise concerning the work or
the execution or failure to execute the same whether
arising during the progress of the work or after the
cancellation, termination, completion or abandonment
thereof shall be dealt with as mentioned hereinafter:
(i) Through Dispute Resolution Committee: Any dispute
as stated above shall be referred in the first place to the
Dispute Resolution Committee (DRC) appointed by the
Executive Director/Member (Planning)/Chairman,
Airports Authority of India.
It is also a term of contract that fees and other expense if
payable to DRC shall be paid equally by both the parties
i.e. AAI and Contractor.
Unless the contract has already been repudiated or
terminated, the contractor shall, in every case, continue
to proceed with the work with all due diligence.
It is also a term of contract that if the contractor does
not make any demand for Dispute Resolution Committee
in respect of any claim in writing within 90 (Ninety) days
of receiving the intimation from the AAI that the bill is
ready for payment, the claim of contractor(s) will be
deemed to have been waved and absolutely barred and
the AAI shall be discharged and released of all liabilities
under the contract in respect of these claims.
ARB.P 211/2017 Page 2
(ii) Adjudication through Work order:- Except where
the decision has become final, binding and conclusive in
terms of Sub Para (i) above, disputes or differences shall
be referred for adjudication through arbitration by a
sole arbitrator appointed by the Member
(Planning)/Chairman, AAI. If the arbitrator so appointed
is unable or unwilling to act or resigns his appointment
or vacates his office due to any reason whatsoever,
another sole arbitrator shall be appointed in the manner
aforesaid. Such person shall be entitled to proceed with
the reference from the stage at which it was left by his
predecessor.
It is also a term of contract that if the contractor does
not make any demand for appointment of Arbitrator in
respect of any claim in writing within 120 (One Hundred
Twenty) days of receiving the decision/award from
Dispute Resolution Committee, the claim of contractor(s)
will be deemed to have been waved and absolutely
barred and the AAI shall be discharged and released of
all liabilities under the contract in respect of these
claims.
It is term of this contract that the party invoking
arbitration shall give a list of disputes with amounts
claimed in respect of each such disputes along with the
notice for appointment of arbitrator and giving reference
to the rejection of their claims by the Dispute Resolution
Committee.
It is also a term of this contract that no person, other
than a person appointed by above mentioned appointing
authority, should act as arbitrator and if for any reason
that is not possible, the matter shall not be referred to
arbitration at all.
ARB.P 211/2017 Page 3
The arbitration shall be conducted in accordance with
the provisions of the arbitration and Conciliation Act,
1996 (26 of 1996) or any statutory modification or re-
enactment thereof and the rules made thereunder and for
the time being in force shall apply to the arbitration
proceeding under this clause.
It is also a term of this contract that the arbitrator shall
adjudicate on only such disputes as are referred to him
by the appointing authority and give separate award
against each dispute and claim referred to him and in all
cases where the total amount of the clams by any party
exceeds Rs. 1, 00,000/-, the arbitrator shall give reasons
for the award.
It is also a term of the contract that if any fees are
payable to the arbitrator, these shall be paid equally by
both the parties.
It is also a term of the contract that the arbitrator shall
be deemed to have entered on the reference on the date
he issues notice to both the parties calling them to
submit their statement of claims and counter statement of
claims. The venue of the arbitration shall be such place
as may be fixed by the arbitrator in his sole discretion.
The fees, if any, of the arbitrator shall, if required to be
paid before the award is made and published, be paid
half and half by each of the parties. The cost of the
reference and of the award (including the fees, if any, of
the arbitrator) shall be in the discretion of the arbitrator
who may direct to any by whom and in what manner,
such costs or any part thereof shall be paid and fix or
settle the amount of costs to be so paid."
ARB.P 211/2017 Page 4
2. It is the stand of the respondent that after execution of the work,
the final bill of the petitioner in respect of BOQ Items stood paid to
the petitioner by the respondent on 3rd March, 2014. It was only vide
letter dated 21st April, 2015 i.e. after the period of 90 days that the
petitioner raised the dispute and sought reference to the arbitration.
3. It is, therefore, contended that in terms of Clause 25(i) of the
work order, the claim of the petitioner has to be deemed to be waived
and cannot be referred to work order.
4. On the other hand, the petitioner submits that there was no
'intimation from the respondent' that the final bill is ready for
payment and therefore, invoking the provisions of clause 25(i) of the
agreement, is not correct.
5. Be that as it may, the respondent does not deny the existence of
the Arbitration Agreement as also the invocation thereof by the
petitioner.
6. The question as to the effect of clause 25(i), the legal validity
thereof and whether the same debarred the petitioner from maintaining
its claims in the facts of the present case, are matters left to be best
decided by the arbitrator.
7. Counsel for the respondent has brought to my notice that earlier
orders of this Court in Work order Petition Nos. 360/2016 titled B.L.
Kashyap & Sons Ltd. vs. Airport Authority of India and 620/2016
titled M/s KMB-ERA(JV) vs. Airport Authority of India, taking
similar view, have been challenged by the respondent before the
ARB.P 211/2017 Page 5
Supreme Court by way of Special Leave Petition (Civil) No. 4924-
4925/2017 titled Airport Authority of India vs. M/s KMB-ERA(JV)
and the said proceedings are pending disposal. He further submits that
these petitions are likely to be listed on 29 th November, 2017. It is
however, admitted that there is no stay granted by the Supreme Court
on the arbitration proceedings pursuant to the order passed by this
Court.
8. In view of the above, I see no merit in the contention raised by
learned counsel for the respondent and direct the parties to appear
before the Delhi International Arbitration Centre (DAC) on 14th
November, 2014 at 2.00 PM. The DAC shall appoint a sole Arbitrator
for adjudication of the dispute between the parties. The proceedings
and fee of the learned Arbitrator will be in terms of the Rules of DAC.
9. The present petition is disposed of in the above terms with no
order as to costs.
NAVIN CHAWLA, J
OCTOBER 30, 2017
sd
ARB.P 211/2017 Page 6
