Technocrats Advisory Services ... vs Union Of India Through The ...
2021 Latest Caselaw 2496 Del

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*       IN THE HIGH COURT OF DELHI AT NEW DELHI
%                                                Date of decision: 13.09.2021
+       ARB.P. 799/2021
        TECHNOCRATS ADVISORY SERVICES PRIVATE LIMITED
                                              ..... Petitioner
                    Through: Mr. Mani Gupta, Advocate

                           Versus

        UNION OF INDIA THROUGH THE MINISTRY OF ROAD
        TRANSPORT AND HIGHWAYS                   ..... Respondent
                      Through: Mr. Ruchir Mishra, Advocate

        CORAM:
        HON'BLE MR. JUSTICE SURESH KUMAR KAIT

                           J U D G M E N T (oral)

1. Present petition has been preferred under the provisions of Section 11

(6) of Arbitration and Conciliation Act, 1996 seeking appointment of sole

Arbitrator.

2. Petitioner-company stated to be incorporated under the provisions of

Companies Act, is engaged in the business of consultancy in the area of

road, highways, expressways, bridges, flyovers, tunnels, railway

infrastructure, tramways, metro and rapid rail system, canals, dams,

irrigation systems and projects, drinking water, water storage reservoirs,

water supply, sewerage & sanitations power generation including solar

energy, transmission of powers, hotels, buildings including public buildings

etc. Respondent- Ministry of Road Transport, Highways and Shipping of the

Union of India is entrusted with the task of Central Ministries/Department,

State Governments/UT Administrations, organisations and individuals,

policies for Road Transport, National Highways and Transport Research to

increase the mobility and efficiency of the road transport system in the

country.

3. According to petitioner, the respondent awarded the contract for

"Consultancy Services for Authority's Engineer for supervision of NH(O)

Works in the State of Bihar (Package No.8) on EPC" to MC Consulting

Engineers Private Limited and entered into a Consultancy Services

Agreement dated 03.12.2014 in respect of Consultancy Services for

Authority's Engineer for supervision of NH(O) Works in the State of Bihar

(Package No.8) on EPC. The role of the selected consultant was to act as the

Authority's Engineer in EPC agreements entered into with road-developers

for the relevant state.

4. Petitioner further avers that by way of a scheme of demerger cum

arrangement, consultancy division relating to roads, highways and bridges of

MC Consulting stood vested into petitioner-Company. Thereafter, petitioner

and respondent entered into a substituted agreement dated 10.02.2017,

where-under petitioner was substituted for MC Consulting and it continued

to performance the services.

5. Thereafter, during the execution of the Consultancy Contract some

disputes and differences arose between the parties. Petitioner claims that the

mandate of the petitioner was to render consultancy services to supervise the

projects sanctioned by the respondent for the financial year 2014-15 and

total 19 projects were entrusted by the respondent to the petitioner for

supervision. Further claimed that in terms of Clause 2.4 of Special

Conditions of the consultancy services contract, the time period of

construction of all contracts was 24 months, however, maintenance period

was raised by respondent to 48 months (04 years).

6. Petitioner has averred that besides the delay in starting construction of

18 projects, there was delay in completion of 10 projects and thereby,

petitioner suffered huge losses, for which respondent refused to pay extra

consultancy fee. Also respondent is alleged to have made unauthorized

deductions from remunerations of Team Leader and Deputy Team Leader;

refused to refix their remunerations after 02 years and further refused to pay

the petitioner the due consultancy fee on price adjustment and maintenance

cost paid to civil work contractors.

7. It is further claimed by petitioner that vide letter dated 05.11.2019,

petitioner requested the respondent to amicably settle the disputes. Further,

vide letter dated 27.11.2019 petitioner requested the respondent for

adjudication of the disputes through Arbitrator. Respondent vide letter dated

16.12.2019 assured the petitioner for an amicable settlement, but did not

take any further action. Thereafter, vide letter dated 28.05.2021 petitioner

informed the respondent that upon its failure to respond to petitioner's

request to amicably settle the disputes, in terms of Clause 8.2.1 (b) of

Special Conditions of the Contract, petitioner appointed its nominee

Arbitrator and requested respondent to form a 03 members arbitration

tribunal. Since respondent failed to nominate its Arbitrator to form a

arbitration panel within 30 days from the date of receipt of letter dated

28.05.2021, having expired on 27.06.2021, petitioner vide letter dated

01.07.2021 approached the Secretary, Indian Council of Arbitration, for

appointment of an Arbitrator.

8. Respondent vide its letter dated 19.07.2021 informed petitioner of

appointment of Mr. V. Velayutham as its nominee Arbitrator and vide letter

dated 24.07.2021 requested the Indian Council of Arbitration for

condonation of delay in nominating its Arbitrator, for appointment of 03

members of arbitration panel.

9. According to petitioner, the said appointment of Mr. V. Velayutham

as respondent's nominee Arbitrator, is contrary to the terms of Clause 8.2.1

(b) of Special Conditions of the Contract. Also submitted that upon failure

of the respondent to appoint its nominee Arbitrator within 30 days from

receipt of the request dated 28.05.2021, the disputes inter se parties have to

be adjudicated by sole Arbitrator.

10. At the hearing, learned counsel for petitioner emphasized that

appointment of a sole Arbitrator would be efficient both in costs as well as

administratively.

11. The present petition is opposed by learned counsel appearing on

behalf of respondent, however, existence of arbitration Clause 8.2 in the

Agreement in question as well as procedure for appointment of Arbitrator in

terms of Clause 8.2.4 of the Special Condition of the Contract is not

disputed. Invocation of arbitration vide letter dated 28.05.2021 by the

petitioner is also not disputed. Pertinently, respondent had failed to nominate

its Arbitrator within stipulated period of 30 days pursuant to letter dated

19.07.2021.

12. Accordingly, Mr. Justice (Retd.) Madan B. Lokur, former Judge

of Hon'ble Supreme Court (Mobile: 9868219007) is appointed the Sole

Arbitrator to adjudicate the dispute between the parties.

13. The fee of the learned Arbitrator shall be governed by the Fourth

Schedule of the Arbitration and Conciliation Act, 1996.

14. The learned Arbitrator shall ensure compliance of Section 12 of

Arbitration and Conciliation Act, 1996 before commencing the arbitration.

15. A copy of this order be sent to the learned Arbitrator for information.

16. With aforesaid directions, these petitions and pending application, if

any, are accordingly disposed of..

(SURESH KUMAR KAIT) JUDGE SEPTEMBER 13, 2021 r