Delhi High Court
Vivaan Solar Pvt. Ltd. vs Northern Central Railways & Anr. on 9 September, 2021
$~1
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision: 09.09.2021
+ ARB.P. 191/2021
VIVAAN SOLAR PVT. LTD. ..... Petitioner
Through: Mr. Arun Doodawat, Advocate
Versus
NORTHERN CENTRAL RAILWAYS & ANR. ..... Respondents
Through: Mr. Jagjit Singh, Senior Standing
Counsel, Mr. Preet Singh &
Mr. Vipin Chaudhary, Advocates
CORAM:
HON'BLE MR. JUSTICE SURESH KUMAR KAIT
J U D G M E N T (oral)
The hearing has been conducted through video conferencing.
1. The present petition has been filed by petitioner seeking appointment
of a Sole Arbitrator under the provisions of Section 11(6) of the Arbitration
and Conciliation Act, 1996.
2. Petitioner, a private limited company, claims to have vast experience
in development of Solar Power Park, Roof Top Plants and in generation of
renewable source of energy in solar, having been registered under the Micro,
Small and Medium Entrepreneurs Department and claims to be entitled to all
the benefits and privileges available under the provisions of Micro, Small
and Medium Entrepreneurs Act 2006. Petitioner had submitted a bid with
respondents towards a tender bearing No. No. NR/SPV/RFP/01/2015 to
execute design, manufacture, supply, erection, testing and commissioning of
5 MWP of Solar Rooftop Project including operation and maintenance for a
period of 25 years at Railway Stations of Northern Railways under PPP
Model.
3. According to petitioner, vide letter dated 28.10.2016, respondents
awarded the work in question to petitioner, which was accepted by petitioner
vide letter dated 28.10.2016. A Power Purchase Agreement dated
16.11.2016 was entered into between the parties, wherein terms and
conditions of work ancillary thereto, were recorded. The petitioner had
concluded the work/project on 09.11.2017 and respondents after due
satisfaction had issued completion certificate on 22.11.2017.
4. It is further averred that during execution of the work, several
grievances were raised by petitioner, however, respondents failed to meet
out the same such like regular generation loss, providing security of the
equipment for rooftop solar plant, which was within the ambit of
respondents, which resulted in regular thefts and ultimately causing loss to
the petitioner and thereby, respondents failed to fulfil its part of contractual
obligations in terms mentioned in Article-19.1.4 of the Power Purchase
Agreement in question.
5. At the hearing, learned counsel for petitioner has submitted that
respondents has also failed to comply with the Article- -30.1 towards change
of law in GST; 15.1.7 towards repairs of the roof of the premises; 16.5
toward supply of electricity besides other over heads e.g. module removal;
shifting ACDB panel, cables and modules etc.
6. It is further averred in Para-21 of the petition that out of total CFAS
amount of Rs.5.6175 crores, an amount of Rs.5.37 crores have already been
paid by the respondents and amount of Rs.24,75,000/- is still unpaid towards
CFA to petitioner, which is claimed with 15% interest from respondents.
Petitioner has further claimed a termination payment of Rs.43,23,72,000/-
vide Notice dated 24.08.2020 with a further letter dated 17.09.2020 to Chief
Electrical General Engineer of the Northern Railways under the provisions
of Article-33.2 of the Power Purchase Agreement. However, no steps have
been taken by the respondents to resolve the grievances. Therefore,
petitioner has invoked Article-33.4 of the Power Purchase Agreement
invoking arbitration vide its communication dated 15.10.2020 and since no
reply was received thereto, petitioner has filed the present petition seeking
appointment of an Arbitrator to adjudicate the disputes between the parties.
7. On the contrary, the present petition is opposed by learned senior
standing counsel appearing on behalf of respondents, who submits that in
terms of Clause- 33.1 and 33.2 of the Power Purchase Agreement, the
disputes can be amicably resolved under the aegis of Railway Arbitrator
appointed by the General Manager and the petitioner without making an
attempt to resolve the dispute amicably and following the due procedure, has
approached this Court rather than fulfilling it's part of obligations.
8. Learned senior standing counsel for respondents further submits that
respondents have already made the payments as per tariff of the Power
Purchase Agreement in question. In addition, to submit that the appointment
of Arbitrator at the behest of respondent is as per law, reliance is placed
upon a decision of the Hon'ble Supreme Court in Central Organization for
Railway Electrification vs. M/s. ECI-SPIC-SMO-MCML (JV) A Joint
Venture Company 2020(14) SCC 712 wherein it has been held that
Railways has an expressed power to constitute the arbitral tribunal. Further
submits that in the case in hand, since the purported Notice dated 17.09.2020
has not been received by the respondents, they have a right to appoint the
Arbitrator.
9. The aforesaid submission of learned senior standing counsel for
respondents is refuted by learned counsel for petitioner who submits that the
decision in Central Organization for Railway Electrification (Supra) has
been referred to the Larger Bench and is thus, not applicable to the present
case.
10. This Court has heard learned counsel for the parties and has gone
through the petition and written submissions filed on behalf of both the sides
as well as decisions relied upon. During the course of hearing, learned senior
standing counsel appearing on behalf of respondents has not disputed
existence of the Power Purchase Agreement entered between the parties and
arbitration clause mentioned therein.
11. Further, the submission of learned senior standing counsel for
appearing on behalf of respondents that the respondents have a right to
appoint the Arbitrator does not stand, as the Hon'ble Supreme Court in
Perkins Eastman Architects DPC & Anr. Vs. HSCC (India) Ltd. 2019 SCC
Online SC 1517 has 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."
12. 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 in unequivocal terms.
13. Concurring with the decisions as noted above, the present petition is
allowed.
14. Accordingly, Justice Ajit Prakash Shah, former Chief Justice of
Delhi High Court (Mobile: 9910160007) is appointed sole Arbitrator to
adjudicate the dispute between the parties. The arbitration shall be
conducted under the Delhi International Arbitration Centre (DIAC).
15. 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.
16. A copy of this order be sent to the learned Arbitrator as well as Delhi
International Arbitration Centre (DIAC) for information.
17. With aforesaid directions, the present petition is accordingly disposed
of.
(SURESH KUMAR KAIT)
JUDGE
SEPTEMBER 09, 2021/r
