Delhi High Court
M/S Mgcpl-Aetpl (Jv) vs The National Highways Authority ... on 10 March, 2021
$~28 (original side)
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ ARB.P. 288/2020 & I.A. 11239/2020
M/S MGCPL-AETPL (JV) ..... Petitioner
Through: Mr. Naresh Markanda, Sr. Adv.
with Mr. Virender Kumar Sharma, Adv.
versus
THE NATIONAL HIGHWAYS AUTHORITY OF INDIA
(NHAI), THROUGH, THE CHAIRMAN, NATIONAL
HIGHWAYS AUTHORITY OF INDIA & ORS.
..... Respondents
Through: Ms. Padma Priya and Ms.
Akansha Das, Advs. for R-1 to R-3
CORAM:
HON'BLE MR. JUSTICE C. HARI SHANKAR
J U D G M E N T (ORAL)
% 10.03.2021
(Video-Conferencing)
1. By this petition under Section 11(6) of the Arbitration and
Conciliation Act, 1996 ("the 1996 Act"), the petitioner seeks reference
of the dispute between the petitioner and Respondent Nos. 1 to 3 to
arbitration and the appointment of an arbitrator, by this Court, for the
said purpose.
2. The facts in brief.
3. Vide Engineering Procurement Construction (EPC) agreement
dated 2nd November, 2015, the work of "Four laning of Kharar-Kurali
Section of NH-21 from Km 15.765 to Km 29.900" in Punjab, was
Signature Not Verified
By:SUNIL SINGH NEGI
Signing Date:12.03.2021
20:16:09
awarded to the petitioner by NHAI (Respondent Nos. 1 to 3 herein).
The petitioner also furnished a Performance Bank Guarantee for ₹
10,61,20,000/- being 5 % of the contract value.
4. The petitioner alleges that the NHAI defaulted in complying
with Clause 4.1.3(a) of the EPC agreement, resulting in delay, on the
part of the petitioner, in completing the work contracted and resultant
loss to the petitioner. It is also alleged that some of the petitioner's
bills, for the work executed by it, are still outstanding.
5. Clauses 26.1 to 26.3 of the EPC agreement provide for
resolution of disputes and read as under:
"26.1 Dispute Resolution
26.1.1 Any dispute, difference or controversy of
whatever nature howsoever arising under or out of or in
relation to this Agreement (including its interpretation)
between the Parties, and so notified in writing by either Party
to the other Party (the "Dispute") shall, in the first instance,
be attempted to be resolved amicably in accordance with the
conciliation procedure set forth in Clause 26.2.
26.1.2 The Parties agree to use their best efforts for
resolving all Disputes arising under or in respect of this
Agreement promptly, equitably and in good faith, and further
agree to provide each other with reasonable access during
normal business hours to all non-privileged records,
information and date pertaining to any Dispute.
26.2 Conciliation
In the event of any Dispute Between the Parties, either Party
may call upon the Authority's Engineer, or such other person
as the Parties may mutually agree upon (the "Conciliator'') to
mediate and assist the Parties in arriving at an amicable
settlement thereof. Failing mediation by the Conciliator or
Signature Not Verified
By:SUNIL SINGH NEGI
Signing Date:12.03.2021
20:16:09
without the intervention of the Conciliator, either Party may
require such Dispute to be referred to the Chairman of the
Authority and the Chairman of the Board of Directors of the
Contractor for amicable settlement, and upon such reference,
the said persons shall meet no later than 7 (seven) business
days from the date of reference to discuss and attempt to
amicably resolve the Dispute. If such meeting does not take
place within the 7 (seven) business day period or the Dispute
is not amicable settled within 15 (fifteen) days of the meeting
or the Dispute is not resolved as evidenced by the signing of
written terms of settlement within 30 (thirty) days of the
notice in writing referred to in clause 26.1.1 or such longer
period as may be mutually agreed by the Parties, either Party
may refer the Dispute to arbitration in accordance with the
provisions of Clause 26.3."
26.3 Arbitration
26.3.1 Any Dispute which is not resolved amicably by
conciliation, as provided in clause 26.1 &26.2, shall be finally
settled by arbitration a set forth below:
(i) The Dispute shall be finally settled by
arbitration in accordance with the Arbitration and
Conciliation Act, 1996, or any statutory amendment
thereof. The Arbitral tribunal shall consist of 3
Arbitrators, one each to be appointed by NHAI and the
Contractor. The third Arbitrator shall be chosen by the
two Arbitrators so appointed by the Parties and shall
act as Presiding Arbitrator. In case of failure of the two
Arbitrators, appointed by the parties to reach upon a
consensus within a period of 30 days from the
appointment of the Arbitrator appointed subsequently,
the Presiding Arbitrator shall be appointed by the
Chairman of the Executive Committee of the Indian
Roads Congress.
(i) Neither party shall be limited in the proceedings
before such Tribunal to the evidence or arguments
before the other party/ Independent consultant.
(ii) Arbitration may be commenced during or after
the Contract Period, provided that the obligations of
NHAI and the Contractor shall not be altered by reason
Signature Not Verified
By:SUNIL SINGH NEGI
Signing Date:12.03.2021
20:16:09
of the arbitration being conducted during the Contract
Period.
(iii) If one of the parties fails to appoint its
Arbitrator in pursuance of Sub-Clause (i) above, within
30 days after receipt of the notice of the appointment
of its Arbitrator by the other party, then the Chairman
of the Executive Committee of the Indian Roads
Congress, shall appoint the Arbitrator. A certified
Copy of the order of the Chairman of the Executive
Committee of the Indian Roads Congress making such
an appointment shall be furnished to each of the
parties.
(iv) Arbitration proceedings shall be held at Delhi,
India, and the language of the Arbitration Proceedings
and that of all documents and communications between
the parties shall be English."
6. In accordance with the protocol envisaged in the afore-extracted
clauses of the EPC agreement, the petitioner wrote to the
Engineer/Conciliator (Respondent No. 4 herein), on 26th September,
2019, to mediate and settle the dispute.
7. Mediation proceedings, however, failed to result in any
resolution of the controversy, as was confirmed by Respondent No. 4
vide letter dated 14th October, 2019.
8. In the circumstances, the petitioner invoked Clause 26.3 of the
EPC agreement, providing for arbitration, vide letter dated 2nd
November, 2019, addressed to NHAI, and also named its nominee
arbitrator in the said communication.
9. NHAI was, therefore, requested to appoint its nominee
Signature Not Verified
By:SUNIL SINGH NEGI
Signing Date:12.03.2021
20:16:09
arbitrator within a period of 30 days.
10. No response having been received from NHAI within the
aforesaid period of 30 days, the petitioner, in accordance with Clause
26.3.1(iii) of the EPC Agreement, wrote to the Indian Road Congress
(IRC) - Respondent No. 5 herein - on 6th December, 2019, requesting
the IRC to appoint a nominee arbitrator for the respondent.
11. While the request of the petitioner to IRC was so pending, the
NHAI, vide letter dated 27th February, 2020, appointed a learned
retired Judge of the High Court of Allahabad as its nominee arbitrator.
12. On coming to know of this fact, the petitioner wrote to said
nominee arbitrator of NHAI on 12th March, 2020, contesting the
legitimacy of his appointment, as, on the expiry of 30 days from the
receipt of the notice invoking arbitration issued by the petitioner, the
NHAI had lost its right to appoint its nominee arbitrator.
13. On 17th April, 2020, the IRC wrote to the petitioner, forwarding
a copy of a letter, dated 17th March, 2020, received by the IRC from
NHAI, informing the IRC that NHAI had appointed its nominee
arbitrator on 27th February, 2020.
14. The petitioner, thereupon, wrote to NHAI on 5th May, 2020,
stating that the appointment of the nominee arbitrator by the NHAI
was void ab initio, as the NHAI had lost its right to appoint its
arbitrator on the expiry of 30 days from the receipt of notice invoking
Signature Not Verified
By:SUNIL SINGH NEGI
Signing Date:12.03.2021
20:16:09
arbitration by the petitioner.
15. It is in these circumstances that the petitioner has approached
this Court, seeking the intervention of the court to appoint a nominee
arbitrator on behalf of NHAI, so that the arbitrator appointed by the
petitioner and the nominee arbitrator of NHAI appointed by this court
could proceed to appoint the third, presiding arbitrator, and the arbitral
proceedings could take off.
16. Mr. Naresh Markanda, learned Senior Counsel for the
petitioner, submits that this issue stands covered, in the petitioner's
favour, by a judgment dated 6th November, 2020 passed by this Court
in Arb. P. 208/2020 (M/s Larsen & Toubro Ltd. v. N.H.A.I.).
17. Ms. Padma Priya, with commendable fairness, agrees to this
position of law.
18. In view thereof, this Court proceeds to appoint Hon'ble
Mr.Justice S. P. Garg (Mob. No.9910384627 and E-mail ID :
[email protected]), a learned retired Judge of this Court, as the
nominee arbitrator on behalf of NHAI.
19. The NHAI may contact the nominee arbitrator within 48 hours
of receipt of a certified copy of this order.
20. The nominee arbitrator of the petitioner and the nominee
arbitrator of the NHAI, appointed by this Court, thereafter may
Signature Not Verified
By:SUNIL SINGH NEGI
Signing Date:12.03.2021
20:16:09
proceed to appoint a presiding arbitrator in accordance with the
provision of the EPC agreement between the parties.
21. The petition stands disposed of in the aforesaid terms, with no
order as to costs.
C. HARI SHANKAR, J.
MARCH 10, 2021
dsn
Signature Not Verified
By:SUNIL SINGH NEGI
Signing Date:12.03.2021
20:16:09
