Delhi High Court
Gbk Project Pvt. Ltd vs Union Of India Through The General ... on 22 November, 2021
$~9(2021)
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision: 22.11.2021
+ ARB.P. 1055/2021
GBK PROJECT PVT. LTD. ......Petitioner
Through: Mr. S.W. Haider, Advocate
Versus
UNION OF INDIA THROUGH THE GENERAL
MANAGER ......Respondent
Through: Mr. Ashok Singh, Advocate
CORAM:
HON'BLE MR. JUSTICE SURESH KUMAR KAIT
J U D G M E N T (oral)
1. By Way of present petition, petitioner is seeking appointment of an
independent Arbitrator under the provisions of Section 11 of the Arbitration
and Conciliation Act, 1996 read with Section 151 CPC.
2. Petitioner-company claims to be involved in the business of
construction and Railway contracts, who vide acceptance letter dated
26.09.2016 of respondent was awarded work pertaining to "Balance work of
quarters at Asoati Faridabad, construction of station building, power cabin,
RRI and other station building, extension of platforms, retaining wall,
development of circulating area, drainage arrangements in yards and other
allied works at different location in between AST and Jn cabin TKD in C/W
4th line" for Rs. 12,64,61 ,022.97 (Rupees Twelve Crore Sixty Four Lac
Sixty One Thousand Twenty Two and Ninety Seven Paise only). The work
was to be completed within stipulated period of 15 months i.e. 25.12.2017.
3. According to petitioner, petitioner had made all necessary
arrangements, however, work could not be completed by the stipulated time
i.e. 25.12.2017 due to several failures on the part of the respondent and so,
the period for completion of work was last extended upto 01.12.2019.
However, during execution of the work, various claims, clarifications and
disputes arose between the parties, which were brought to the notice of
concerned department of respondent, but instead of finding out any solution
and acting oblivious to the genuine difficulties faced by the petitioner,
respondent issued several notices to the petitioner with a view to
escape/wriggle out from its contractual obligations and vide notice dated
23.09.2019 the respondent terminated the contract.
4. It is averred by the petitioner that respondent was under the obligation
to serve 48 hours notice upon the petitioner before terminating the contract
as mandated and so, petitioner vide its letter dated 23.07.2021, invoked the
arbitration clause as contained under clause 64 of the General Conditions of
the Contract.
5. At the hearing, learned counsel for the petitioner has submitted that
petitioner claims amount to Rs.4,76,34,485/- (Rupees Four Crore Seventy
Six Lac Thirty Four Thousand Four Hundred Eighty Five Only) against the
respondent and therefore, the present petition be allowed.
6. On the other hand, learned counsel appearing for respondent has
disputed the averments made by the petitioner and has submitted that in
response to petitioner's letter dated 23.07.2021 invoking arbitration,
respondent in its reply dated 23.08.2021 had sought waiver of Section 12(5)
of the Act, however, it was not replied to by the petitioner. Further submits
that in terms of Clause-64(3) of the General Conditions of Contract, if the
total value of claim does not exceed Rs.25,00,000, , the Arbitral Tribunal
shall consist of a Sole Arbitrator who shall be a Gazetted Officer of Railway
not below JA Grade, nominated by the General Manager otherwise, the
Arbitral Tribunal shall consist of a Panel of three Gazetted Railway Officers
not below JA Grade or 2 Railway Gazetted Officers not below JA Grade and
a retired Railway Officer, retired not below the rank of SAG Officer, as the
arbitrators.
7. Both sides have been heard and record of this case has been perused.
8. Pertinently, invocation of arbitration vide letter dated 23.07.2021 by
the petitioner is not disputed. Though the present petition has been opposed
by learned counsel for respondent, however, it is not disputed that any
dispute inter se parties has to be resolved through arbitration in terms as
contained under clause 64 of the General Conditions of the Contract.
However, contention of learned counsel for respondent that appointment of
Arbitrator has to be made in terms of Clause-64(3) of the General
Conditions of Contract, is rejected in view of Hon'ble Supreme Court's
decision in Perkins Eastman Architects DPC & Anr. vs. HSCC (India) Ltd.
2019 SCC Online SC 1517, wherein it has been categorically stated that no
single party can be permitted to unilaterally appoint the Arbitrator, as it
would defeat the purpose of unbiased adjudication of dispute between the
parties. The aforesaid decision in Perkins (Supra) has been followed by a
Coordinate Bench of this Court in Proddatur Cable TV Digi Services Vs.
Citi Cable Network Limited: (2020) 267 DLT 51. Thus, the Arbitrator either
has to be appointed with the consensus of the parties or by this Court.
9. In view of the above, the present petition is, therefore, allowed and
Mr. Justice (Retd) I.S.Mehta, former Judge of Delhi High Court
(Mobile: 9910384616) is appointed the Sole Arbitrator to adjudicate the
dispute between the parties.
10. The arbitration shall be conducted under the Delhi International
Arbitration Centre (DIAC). The fee of the Arbitrator shall be in accordance
with the Schedule of Fees prescribed under the Delhi International
Arbitration Centre (DIAC) (Administrative Cost and Arbitrators Fees)
Rules, 2018.
11. The learned Arbitrator shall ensure compliance of Section 12 of
Arbitration and Conciliation Act, 1996 before commencing the arbitration.
12. A copy of this order be sent to learned Arbitrator for information.
13. With aforesaid directions, the present petition is accordingly disposed
of.
(SURESH KUMAR KAIT)
JUDGE
NOVEMBER 22, 2021
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