Delhi High Court
Amr-Bbb Consortium vs Bharat Coking Coal Ltd. on 13 January, 2022
$~6
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision: 13.01.2022
+ ARB.P. 1247/2021
AMR-BBB CONSORTIUM ..... Petitioner
Through Mr.Rajeeve Mehra, Sr. Adv. with
Mr.Keshav Sehgal, Adv.
versus
BHARAT COKING COAL LTD. ..... Respondent
Through Mr.Amit Sharma, Adv.
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 under Section 11(6) read with
Section 10(2) of the Arbitration and Conciliation Act, 1996 seeking
appointment of sole Arbitrator to adjudicate the disputes inter se the parties.
2. Petitioner is a Consortium comprising of two companies i.e. AMR
India Limited, a company registered under the Companies Act, 1956 {AMR
Construction Limited} and Building Business Bridges UK Limited {BBB}
and the Consortium Agreement was entered into between AMR and BBB on
16.09.2011 and 12.12.2012 for participating in the tender process and
development, mining and extraction of the Kapuria Block. As per clause 5 &
6 of the agreement dated 16.09.2011, AMR was the lead partner of the
petitioner consortium.
3. According to the petitioner, respondent is a public sector undertaking
and a subsidiary of Coal India Limited and engaged in the business of
mining of cooking coal and operating the Jharia and Raniganj coalfields in
the State of Jharkhand and produces bulk of cooking coal mined in the
country.
4. As per the averments made in the present petition, vide letter of
acceptance dated 10.09.2011 by the respondent, petitioner was awarded to
undertake the work under Contract for the "Development of Kapuria Block
& extraction of coal by mass production technology package for a minimum
guaranteed production of 2.0 million ton per Year on turnkey basis'', for the
amount of Rs. 798.82 crores as capital cost for development phase-I, and Rs.
1427.25 crores as Revenue cost for phase-II. Accordingly, in terms of
Clause 4.1.l(xxxiii) of the Contract, the scope of Work included preparation
of a Detailed Project Report ("DPR") & EMP by the Petitioner for the
development and extraction of coal from the mine for commercial
production period of nine (9) years (APP). The Geological Reports were
provided by the respondent to the petitioner for preparation of DPR as per
scope of work and in return, petitioner prepared a comprehensive DPR and
submitted to the respondent for approval. The aforementioned DPR was
examined over a period of 8 months and communicated to the petitioner
vide letter dated 11.07.2013 with the directions to start the work as per this
approved DPR after getting the Environmental clearance and other statutory
approvals. Consequent to the approved DPR, petitioner furnished a
Performance Bank Guarantee ("PBG") equivalent to 1 % of the Contract
Value, in terms of Clause 4.1.4 of the Agreement dated 18.04.2012
amounting to Rs. 12,78,49,970/- drawn on Oriental Bank of Commerce;
prepared the Mining Plan for extraction of coal reserves; and conducted an
Environmental Impact Assessment and the Environmental Management Plan
and submitted to the respondents through various communications.
Moreover, the Petitioner sought approvals including but not limited to
mining plans, Environmental Clearance, shaft sinking plans and also
furnished Bank guarantees for import of Plant and Machinery, which are as
follows:
i. Bank Guarantee dated 25.09.2014 for Rs. 6,40,75,203/- issued by
ICICI bank
ii. Bank Guarantee dated 29.09.2014 for Rs. 20,00,00,000/- issued by
SBI Bank;
iii. Bank Guarantee dated 30.09.2014 for Rs. 14,79,00,000/- issued by
Bank of Baroda.
5. However, respondent failed to establish letters of credit in favour of
petitioner to import plant and machinery for the purpose of extraction of
coal and also failed to clear the payments under different invoices. Many
other disputes arose between the parties and in order to resolve the issues,
various communications took place between the parties, but those were of
no avail. Thereafter, petitioner vide letter dated 10.11.2020 invoked
arbitration in terms of clause 4.1.31.2 of the Contract.
6. Learned counsel further submits that petitioner approached
International Chambers of Commerce, Paris on 18.12.2020 to appoint an
arbitrator in accordance with the contract but the institution has also failed
to act in accordance with Clause 4.1.43 .2 of the Contract. ICC vide payment
request dated 02.09.2021 demanded to deposit $ 78,000 from all parties i.e.,
Petitioner as well as Respondent and the additional parties. Since there was
no compliance, therefore the ICC, on 14.09.2021 treated the claims as
withdrawn and eventually petitioner also withdrew its claims. However,
petitioner made another attempt to amicably resolve the disputes and called
upon the respondent to join in the appointment of Arbitrator by its letter
dated 29.09.2021, which was not responded to by the Respondent. Hence,
the present petition has been filed.
7. On the other hand learned counsel for respondent has opposed the
present petition submitting that petitioner- Consortium has deliberately and
mala fidely suppressed certain material and relevant facts from this Court.
Learned counsel has pointed out that the Notice dated 10.07.2020 for
cancellation of the Contract was sent to petitioner, as it had prepared DPR
based on limited data available and had not taken up additional exploration
work and rather granted 15 days' time to come up with its submissions,
failing which the contract shall be cancelled. In response to the aforesaid,
petitioner vide letter dated 23.07.2020, sought settlement of the disputes
through 'Conciliation'. Thereafter, vide communication dated 10.11.2020,
respondent asked the petitioner to submit specific disputes, questions,
differences upon which conciliation was intended. However, instead of
replying to said communication, petitioner invoked arbitration. According to
learned counsel for respondent, even after a chain of communications,
petitioner did not come forward for conciliation. In the meantime,
respondent was informed by the Secretariat of the International Court of
Arbitration of the International Chamber of Commerce (ICC) that on
18.12.2020 it had received a request from petitioner for arbitration.
However, due to default of payment to ICC International Court of
Arbitration by the petitioner despite repeated communications, ICC sought
the parties to pay the balance amount. However, again petitioner gained time
from ICC to make payment. Lately, respondent received a communication
dated 29.09.2021 from the petitioner wherein it was informed that petitioner
had withdrawn request for arbitration before the ICC and now, petitioner has
filed the present petition seeking appointment of Arbitrator. Learned counsel
submitted that having approached the ICC, petitioner has already exhausted
its arbitral remedy and therefore, the present petition deserves to be rejected.
8. On the asking of this Court, learned counsel for respondent fairly
submitted that disputes are arbitrable and it has no objection if this Court
appoints an Arbitrator.
9. In view of above, the present petition is allowed. Accordingly, Mr.
Justice (Retd.) T.S. Thakur, former Chief Justice of India (Mobile:
8800309969) is appointed sole Arbitrator to adjudicate the dispute between
the parties.
10. The learned Arbitrator shall ensure compliance of Section 12 of
Arbitration and Conciliation Act, 1996 before commencing the arbitration
The learned Arbitrator shall decide the fee after consulting with he parties.
11. The present petition stands disposed of accordingly.
12. A copy of this order be sent to the learned Arbitrator for information.
(SURESH KUMAR KAIT)
JUDGE
JANUARY 13, 2022/ab
