Delhi High Court
Montecarlo Limited vs Regal Emporia Infratech Pvt Ltd on 6 October, 2021
$~2
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision: 06.10.2021
+ ARB.P. 787/2021
MONTECARLO LIMITED ..... Petitioner
Through Mr. Pratyush Prasanna, Adv.
versus
REGAL EMPORIA INFRATECH PVT LTD ..... Respondent
Through Mr. Alok K. Aggarwal,
Ms. Anushruti and Mr. Raj Duggal,
Advs.
CORAM:
HON'BLE MR. JUSTICE SURESH KUMAR KAIT
J U D G M E N T (oral)
1. Petitioner- M/s Montecarlo Limited has preferred the present petition
under Section 11(6) of the Arbitration and Conciliation Act, 1996 seeking
appointment of Arbitrator to adjudicate the dispute with respondent.
2. According to petitioner, respondent- Regal Emporia Infratech Pvt Ltd,
registered under the Companies Act, 1956, had invited tender for erection,
construction, execution and completion of works relating to Civil &
Structural including but not limited to other services related to civil and
structure works from start to completion for a mix use project known as
"Regal Emporia" situated at Plot No. C-02, Sector-4, Greater Naida, Gautam
Budh Nagar and petitioner, having substantial experience in the civil work
and construction activities, approached respondent and showed interest in
various services to the respondent for the said project. Respondent vide
Letter of Intent dated 11.03.2015 awarded the said work to petitioner and so,
the parties entered into an agreement dated 07.04.2015. The execution of
work commenced on 10.04.2015, which was to be completed on 10.04.2018.
3. According to petitioner, it suffered various losses due to the lapses on
the part of respondent like delay in handing over of the drawings, delay in
receipt of free issue of materials, delay in payments etc. and also due to
situation beyond the control of the petitioner like Covid pandemic.
Therefore, vide e-mail dated 04.06.2020, petitioner sent an email to the
respondent seeking extension for completion of project which was granted
and the date of completion was extended to 05.04.2021. The petitioner vide
its letter dated 18.03.2021 claims to have submitted interim claim of
Rs.41,03,45,815.15/- to respondent due to prolongation of project upto
01.03.2021. Since respondent failed to reply to the aforesaid letter dated
18.03.2021 and make payment of interim claim, petitioner issued a notice of
dispute dated 30.03.2021 regarding the underutilized claim amounting to
Rs.41,03,45,815.15/- for a period of July 2016 till March 2021.
4. It is further averred in the petition that several joint discussions
between representative of both the sides to amicably resolve the disputes
took place like on 09.10.2020 and 28.01.2021, however, parties could not
resolve it. Therefore, in accordance with General Conditions of the Contract
as well as Clause- 21 of the Contract Agreement, petitioner vide Notice
dated 30.03.2021 referred the dispute to Managing Director of the
respondent. Once again vide letter dated 03.04.2021, petitioner sought
extension of time for completion of the project till 03.08.2021 citing reasons
for Force Majeure, however, respondent vide its letter dated 05.04.2021
refused to grant any further extension and also referred to Clause 20 (b) and
20 (c) of the Contract Agreement, which provides for termination of
Contract Agreement by giving 30 days' time in writing. Thereafter,
petitioner vide letter dated 13.04.2021 requested respondent to clear all dues
and reimburse the claims.
5. Petitioner further claims to have sent letter dated 26.06.2021
informing respondent of commencement of arbitration and proposed name
of a former Judge of Supreme Court of India as sole Arbitrator and sought
respondent's consent. In reply to the aforesaid, vide letter dated 01.07.2021
respondent declined to the proposed name of Arbitrator by the petitioner and
further, vide letter dated 28.07.2021 issued a letter to the petitioner
informing that it is under the process of selecting an Arbitrator.
6. The stand of petitioner is that since respondent is an interested party,
against which petitioner has raised claims, therefore, respondent has no right
to propose or appoint the Arbitrator. In support of aforesaid averment,
reliance is placed upon decision in Perkins Eastman Architects DPC v.
HSCC (India) Ltd. 2019 SCC Online SC 1517. Next, since respondent has
not yet proposed/nominated any name of Arbitrator pursuant to Clause -21
of the Contract Agreement, therefore, the present petition deserves to be
allowed.
7. At the hearing, learned counsel appearing on behalf of respondent
disputed the claims raised by the petitioner, however, very fairly conceded
that the disputes inter se parties can be resolved through arbitration and
prayed this Court that this Court may appoint sole Arbitrator.
8. This Court has heard the submissions advanced by both the sides.
9. Upon hearing, this Court finds that counsel representing both the sides
have not disputed existence of Contract Agreement dated 07.04.2015 and
also that there are disputes inter se parties, which could not since be
resolved through conciliation, therefore, are required to be resolved through
arbitration. Reliance placed by petitioner's counsel upon Hon'ble Supreme
Court's decision in Perkins Eastman (Supra) to submit that respondent has
vested rights and so, be not permitted to appoint its Arbitrator, does not
appeal to this Court, as in the said decision it has been categorically stated
that "in cases where one party has a right to appoint a sole arbitrator, its
choice will always have an element of exclusivity in determining or charting
the course for dispute resolution. Naturally, the person who has an interest
in the outcome or decision of the dispute must not have the power to appoint
a sole arbitrator." Therefore, though it does not meet the contention so
raised above by petitioner's counsel but is very well placed upon in the
present case. The afore-noted dictum of Hon'ble Supreme Court in Perkins
Eastman (Supra), has been followed by Coordinate Benches of this Court in
Proddatur Cable Tv Digi Services Vs. Siti Cable Network Limited 2020
SCC OnLine Del 350 and VSK Technologies Private Limited and Others
Vs. Delhi Jal Board 2021 SCC OnLine Del 3525 and also in various
decisions passed by this Court in unequivocal terms. Thus, concurring with
the decision in Perkins Eastman (Supra), the present petition is allowed.
10. Accordingly, Mr. Justice (retd.) A. Ramalingeswara Rao (Mobile:
8330969969 & 9391002170) is appointed sole Arbitrator to adjudicate the
disputes between the parties.
11. The fees of the learned Arbitrator shall be according to Fourth
Schedule of the Arbitration and Conciliation Act, 1996.
12. The learned Arbitrator shall ensure compliance of Section 12 of
Arbitration and Conciliation Act, 1996 before commencing the arbitration.
13. The present petition is accordingly disposed of.
14. A copy of this order be sent to the learned Arbitrator for information.
(SURESH KUMAR KAIT)
JUDGE
OCTOBER 6, 2021
rk/r
