Kerala High Court
P & C Projects Pvt Ltd vs M/S. Inkel Limited on 12 November, 2024
2024:KER:83950
A.R.No.114/2024 1
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE G.GIRISH
TUESDAY, THE 12TH DAY OF NOVEMBER 2024 / 21ST KARTHIKA,
1946
AR NO. 114 OF 2024
PETITIONER:
P & C PROJECTS PVT LTD.
P & C TOWERS, 2ND FLOOR 140, PERUNDURAI ROAD, ERODE,
REPRESENTED BY ITS GENERAL MANAGER CONTRACTS AND
AUTHORIZED SIGNATORY MR. M.A SYED SIRAJUDEEN, PIN -
638011
BY ADVS.
NISHA GEORGE
GEORGE POONTHOTTAM (SR.)
RESPONDENT:
M/S. INKEL LIMITED
DOOR NO.7/473 ZA-5 AND 6 AJIYAL COMPLEX, POST OFFICE
ROAD KAKKANAD, COCHIN, REPRESENTED BY ITS MANAGING
PLEADER SHRI. A.MOHAN LAL, PIN - 682030
BY ADV P.U.SHAILAJAN
THIS ARBITRATION REQUEST HAVING COME UP FOR ADMISSION
ON 05.11.2024, THE COURT ON 12.11.2024 DELIVERED THE
FOLLOWING:
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A.R.No.114/2024 2
G.GIRISH, J.
---------------
A.R.No.114 of 2024
------------------------------
Dated this the 12th day of November, 2024
-----------------------------------------------
ORDER
The applicant, a company registered under the Companies
Act, 1956, has filed this application under Section 11(6) of the
Arbitration and Conciliation Act, 1996 (for short 'the Act') for
the appointment of a sole Arbitrator to adjudicate the disputes
between the applicant and the respondent in terms of Clause 25
of Annexure-A3 agreement executed in between them on
06.08.2018.
2. As per Annexure-A3 agreement, the applicant
undertook the work for developing and constructing the flagship
project of Cochin Cancer Research Centre, Ernakulam funded by
the Kerala State Infrastructural Investment Fund Board (KIIFB).
The period initially fixed for the completion of the project was
730 days from the date of handing over of the project site.
However, the applicant was not able to complete the project
within the above stipulated time due to the reasons which,
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according to the applicant, amounted to force majeure. At the
request of the applicant, the period for completion of the
project was said to have been extended to 949 days. Even
after the expiry of the extended period, the applicant was not
able to complete the project as undertaken in the agreement
executed between the parties. Thereafter, the respondent,
pursuant to show cause notices issued to the applicant,
terminated the contract stating the reason that the explanations
offered by the applicant were unsatisfactory. The applicant
challenged the aforesaid termination unsuccessfully by filing
W.P.(C) No.2200/2021 and W.A.No.905/2021 before this Court.
Pursuant to the dismissal of S.L.P (C) No.5672/2022 which the
applicant filed before the Supreme Court against the judgment
in W.A.No.905/2021, Arbitration Request No.115/2022 was filed
before this Court under Section 11(6) of the Act. This Court, as
per Annexure-A28 order dated 10.08.2022 observed that the
final bill submitted by the applicant has to be considered by the
Dispute Redressal Committee as provided under Clause 25 of
Annexure-A3 agreement, and accordingly disposed of the
Arbitration Request without prejudice to the rights of the
applicant to seek the appointment of an Arbitrator at a later
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stage, if so warranted. It is the grievance of the applicant that
even the Dispute Redressal Committee constituted by the
respondent, after much persuasion, did not take any effective
steps to redress his grievance. Accordingly, the applicant
issued Annexure-A49 letter to the respondent invoking the
Arbitration Clause contained in Annexure-A3 agreement
suggesting the respondent to choose one among the three
Arbitrators mentioned in that letter for the resolution of the
disputes which arose in connection with the agreement between
the parties. Alleging non co-operation on the part of the
respondent to have the dispute resolved through the mode of
arbitration provided under Annexure-A3 agreement, the
applicant has filed the present Arbitration Request.
3. The respondent appeared through their counsel and
filed a counter affidavit strongly disputing the entitlement of the
applicant to seek the appointment of an Arbitrator. According to
the respondent, the applicant was delaying the work from the
very beginning itself, and it could not be completed even after
the respondent granted extension of period to 949 days from
the initial period of 730 days originally fixed. It is also alleged
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that the work carried out by the applicant was of poor quality.
According to the respondent, the contract was terminated due
to the failure of the respondent to complete even a substantial
portion of the work within the extended period. The respondent
also stated in the counter affidavit that all the issues raised by
the applicant in connection with the claim for arbitration had
already been considered and rejected by this Court in the writ
petition and the writ appeal filed by the applicant. It is further
contended that the petitions filed by the applicant before the
Commercial Court, Ernakulam in C.M.A (Arb) No.546/2021 were
dismissed by the said court accepting the contentions of the
respondent in the counter affidavit filed by them. As regards
the proceedings of the Dispute Redressal Committee, the
respondent stated that the said Committee had conducted five
meetings with a view to redress the grievance of the applicant.
It is thus stated that in the last sitting of the DRC held on
02.12.2023, it was resolved that all the claims placed by the
applicant in the final bill, as well as the statutory deductions
and compensation payable to the respondent for the delay in
the completion of the project etc., are to be determined at the
time of final settlement, and that there shall be no further
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claims from the applicant in connection with the
materials/plant/equipments lying in the project site since the
applicant has been allowed to take such
materials/plant/equipments etc. at its own risk and cost. By
adverting to Clause 25 of Annexure-A3, the respondent would
contend that there is no scope for appointment of Arbitrator
since the Dispute Redressal Committee had already dealt with
the issue and resolved that the claims of the applicant are to be
considered at the time of final settlement. Thus, it is stated
that the Arbitration Request is premature since it could be
resorted to only after the DRC takes a final decision.
4. Heard the learned Senior Counsel Adv.Mr.George
Poonthottam appearing for the applicant under instructions
from Adv.Mrs.Nisha George, and Adv.Mr.P.U.Shailajan, the
learned counsel for the respondent.
5. The fact that the applicant and the respondents had
entered into Annexure-A3 agreement which provides for the
resolution of the disputes arising between the parties in
connection with the said agreement by resorting to arbitration
as provided under Clause 25 of the said agreement, is not in
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dispute. The contention of the respondent is that the provisions
contained in Clause 25 regarding the appointment of Arbitrator
could be resorted to only when the DRC fails to give its decision
within the period prescribed thereunder or when any of the
parties are dissatisfied with the decision of the DRC. Thus, it is
stated that the DRC constituted in this case had rendered
Annexure-R1(ad) decision to have the claims raised by the
applicant determined at the time of final settlement after the
completion of the project. Accordingly, it is contended that the
applicant is entitled to seek the appointment of an Arbitrator
only after the completion of the project by the new company
entrusted with the task by the respondent. It is the further
contention of the respondent that Annexure-A49 letter cannot
be considered as a valid notice since even after the said letter
of the applicant, two sittings were conducted by the DRC, which
the applicant had suppressed in this proceedings.
6. The first contention of the respondent that the
applicant has to wait till the completion of the project by the
new entity entrusted by the respondent, to have its claim
resolved at the instance of the DRC, prima facie defeats the
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purpose of the Arbitration and Conciliation Act, 1996 enacted
for speedy and efficacious remedy to be rendered to the parties
to commercial disputes. It is to be noted that the DRC is only
an in-house mechanism provided by the respondent itself, with
its members chosen at the discretion of the respondent. There
is no point in arguing that the applicant has to wait till the
Project Work of the respondent is completed by the present
company entrusted with the task, and the DRC again convened
to delve upon the final settlement of the bills, for getting the
payment of amounts lawfully entitled to them. Therefore the
objection raised by the respondent in the above regard is bereft
of merit. The contention of the respondent about the
suppression of facts by the applicant on the decisions taken by
the DRC in the two sittings conducted after Annexure-A49
notice, is also totally untenable since it could be seen from
Paragraph 31 of the Arbitration Request that the applicant has
disclosed the details pertaining to the efforts made by them to
remove their materials lying at the site, and Annexures-A50 and
A52 letters issued by the respondent consequent to the decision
of DRC to permit the applicant to remove the materials, plant,
equipments etc., from the Project site. The mere fact that the
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applicant co-operated with the respondent in the two DRC
meetings held after Annexure-A49 notice, cannot be termed as
a circumstance which would vitiate or nullify the sanctity of
Annexure-A49 notice. A reading of the said letter issued by the
applicant would reveal that it contains the essential
requirements envisaged under law as prerequisites for invoking
the Arbitration Clause in an agreement between the parties.
7. Another argument advanced by the respondent is that
the present application filed, without KIFB in the party array, is
prima facie not maintainable due to non joinder of necessary
parties. I find no merit in the above argument since there is
absolutely no requirement to arraign persons outside Annexure
A3 agreement as parties to this Arbitration Request, which is to
be decided on the basis of the contract inter-se between the
parties to that agreement.
8. As a conclusion to the aforesaid discussion, I find
that the applicant is entitled to invoke Section 11(6) of the Act,
and seek the appointment of an Arbitrator at the instance of
this Court.
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In the result, the application stands allowed, and an order
is passed as follows:
i) Mr. Justice M. Sasidharan Nambiar, 'Swapnam',
Amritha Lane, Near Puthenkulangara Temple,
Eroor North P.O., Kochi- 682 306 is nominated as
the sole Arbitrator to arbitrate upon the disputes
that have arisen between the petitioner and the
respondent within the purview of Annexure-A3
agreement.
ii) The learned Arbitrator is at liberty to rule on all
issues between the parties in connection with the
said agreement, including his own jurisdiction if
the parties raise such a dispute.
iii) The Registry is directed to communicate a copy of
this order to the learned Arbitrator within a period
of ten days from today and to obtain a Statement
of Disclosure from the learned Arbitrator as
provided under Section 11(8) read with
Section12(1) of the Act.
iv) Once the Disclosure Statement is obtained from
the learned Arbitrator, the Registry shall issue the
certified copy of this order to the learned
Arbitrator, with a copy of the said statement
appended to it, retaining the original of the same
by this Court.
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v) The fees of the learned Arbitrator shall be
governed by the Fourth Schedule of the Act.
vi) The learned Arbitrator shall decide the manner in
which the fees and expenses of the arbitration
proceeding has to be paid by the parties.
vii) The parties will appear before the learned
Arbitrator on such date and place as decided by
the learned Arbitrator.
(sd/-)
G.GIRISH, JUDGE
jsr
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PETITIONER ANNEXURES
Annexure A1 A COPY OF THE NOTICE INVITING TENDER DOCUMENT
NO. NIT/INKEL/ KIIFB/2018-19/010 DATED
05.04.2018 ISSUED BY THE RESPONDENT
Annexure A2 A COPY OF THE LETTER ACCEPTANCE NO. INKEL/
CE/LOA/HEALTH/ 2018/037 DATED 13.06.2018
ISSUED BY THE RESPONDENT
Annexure A3 A COPY OF THE AGREEMENT NO.
04/KIIFB/INKEL/2018-19 DATED 06.08.2018
ENTERED BETWEEN THE RESPONDENT AND THE
APPLICANT
Annexure A4 TRUE COPY OF THE LETTER RELATED TO BILL DATED
03.06.2019
Annexure A4(a) COPY OF THE LETTER RELATED TO BILL DATED
17.06.2019
Annexure-A5 TRUE COPY OF THE LETTER RELATED TO LABOUR
UNION ISSUES DATED 10.09.2018
Annexure-A5(a) TRUE COPY OF THE LETTER DATED 11.09.2018
Annexure A5(b) TRUE COPY OF THE LETTER DATED 17.03.2020.
Annexure-A6 TRUE COPY OF THE LETTER RELATED TO DRAWINGS
DATED 01.09.2018.
Annexure-A6(a) TRUE COPY OF THE LETTER DATED 06.07.2019.
Annexure-A6(b) TRUE COPY OF THE LETTER DATED 16.08.2019
Annexure -A7 TRUE COPY OF THE CO-ORDINATION LETTERS DATED
24.09.2018.
Annexure-A8 TRUE COPY OF THE LETTER WITH RESPECT TO
OVERALL DELAY EVENTS DATED 28.03.2019.
Annexure-A8(a) TRUE COPY OF THE LETTER DATED 30.05.2019
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Annexure-A8(b) TRUE COPY OF THE LETTER DATED 04.07.2019.
Annexure-A8(c) TRUE COPY OF THE LETTER DATED 10.07.2019
Annexure-A8(d) TRUE COPY OF THE LETTER DATED 18.11.2019
Annexure-A8(e) TRUE COPY OF THE LETTER DATED 25.06.2020
Annexure-A8(f) TRUE COPY OF THE LETTER DATED 08.01.2021
Annexure-A9 TRUE COPY OF THE LETTER RELATED TO FLOODS
DATED 11.10.2018.
Annexure-A9(a) TRUE COPY OF THE LETTER DATED 16.10.2018
Annexure-A10 TRUE COPY OF THE LETTER RELATED TO E-PASS
DATED 13.07.2020
Annexure-A10(a) TRUE COPY OF THE LETTER DATED 27.07.2020
Annexure-A10(b) TRUE COPY OF THE LETTER DATED 18.07.2020.
Annexure -A11 TRUE COPY OF THE LETTER RELATED TO COVID
– 19 DATED 10.08.2020
Annexure-A11(a) TRUE COPY OF THE LETTER DATED 18.08.2020
Annexure-A11(b) TRUE COPY OF THE LETTER DATED 20.08.2020
Annexure-A11(c) TRUE COPY OF THE LETTER DATED 25.07.2020
Annexure-A11(d) TRUE COPY OF THE LETTER DATED 29.07.2020.
Annexure-A12 TRUE COPY OF THE LETTER RELATED TO EOT DATED
23.11.2018.
Annexure-A12(a) TRUE COPY OF THE LETTER DATED 09.03.2019.
Annexure -A12(b) TRUE COPY OF THE LETTER DATED 23.07.2019
Annexure-A12(c) TRUE COPY OF THE LETTER DATED 24.07.2019
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Annexure-A12(d) TRUE COPY OF THE LETTER DATED 10.07.2019.
Annexure-A12(e) TRUE COPY OF THE LETTER DATED 20.07.2020.
Annexure-A12(f) TRUE COPY OF THE LETTER DATED 23.11.2018.
Annexure-A12(g) TRUE COPY OF THE LETTER DATED 25.06.2020.
Annexure-A13 TRUE COPY OF THE LETTER DATED 11.06.2020
Annexure -A14 TRUE COPY OF THE LETTER DATED 23.07.2020
Annexure-A15 TRUE COPY OF THE LETTER DATED 15.09.2020
SUBMITTED BY THE APPLICANT.
Annexure-A16 TRUE COPY OF THE SUPPLEMENTARY AGREEMENT
DATED 24.09.2020 EXECUTED BETWEEN THE
APPLICANT AND THE RESPONDENT.
Annexure-A17 TRUE COPY OF THE SHOW CAUSE NOTICE DATED
26.12.2020 ISSUED BY THE RESPONDENT.
Annexure-A18 TRUE COPY OF THE LETTER DATED 04.01.2021
ISSUED BY THE APPLICANT.
Annexure-A19 TRUE COPY OF THE LETTER DATED 06.01.2021
ISSUED BY THE APPLICANT
Annexure-A20 TRUE COPY OF THE LETTER DATED 08.01.2021
ADDRESSED TO THE HEALTH AND FAMILY WELFARE
DEPARTMENT BY THE APPLICANT.
Annexure -A21 TRUE COPY OF THE LETTER DATED 18.01.2021
ISSUED BY THE RESPONDENT TO THE APPLICANT
Annexure -A22 TRUE COPY OF THE JUDGMENT DATED 26.04.2021 IN
W.P(C) NO.2200 OF 2021 PASSED BY THIS HON'BLE
COURT.
Annexure-A23 . TRUE COPY OF THE JUDGMENT DATED 13.10.2021
IN W.A. NO. 905 OF 2021 PASSED BY THIS
HON'BLE COURT.
Annexure-A24 TRUE COPY OF THE ORDER OF THE HON'BLE SUPREME
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COURT OF INDIA DATED 13.4.2022 IN SLP (C)
NO.5672 OF 2022.
Annexure-A25 TRUE COPY OF THE LETTER DATED 11.02.2022
ISSUED BY THE APPLICANT
Annexure-A26 TRUE COY OF THE LETTER DATED 15.03.2022
ISSUED ON BEHALF OF THE RESPONDENT.
Annexure-A27 TRUE COPY OF THE ARBITRATION REQUEST NO. 115
OF 2022 FILED BEFORE THIS HON'BLE COURT ON
07.05.2022, WITHOUT ITS ANNEXURES.
Annexure-A28 TRUE COPY OF THE ORDER OF THIS HON'BLE COURT
IN ARBITRATION REQUEST NO. 115 OF 2022 DATED
10.08.2022.
Annexure-A29 TRUE COPY OF THE LETTER NO. INKEL/LEGAL/
LETTER/7475 DATED 19.08.2022 ISSUED BY THE
RESPONDENT.
Annexure-A30 TRUE COPY OF THE LETTER DATED 02.09.2022
ISSUED BY THE RESPONDENT.
Annexure-A31 TRUE COPY OF THE LETTER DATED 27.09.2022
ISSUED BY THE RESPONDENT
Annexure -A32 TRUE COPY OF THE LETTER DATED 18TH OCTOBER
2022 ISSUED BY THE RESPONDENT.
Annexure-A33 TRUE COPY OF THE LETTER DATED 12.12.2022
ISSUED BY THE APPLICANT.
Annexure-A34 TRUE COPY OF THE LETTER DATED 22.10.2022
ISSUED BY THE APPLICANT
Annexure-A35 TRUE COPY OF THE LETTER DATED 16.11.2022
ISSUED BY THE RESPONDENT.
Annexure-A36 TRUE COPY OF THE LETTER DATED 22.12.2022
ISSUED BY THE RESPONDENT.
Annexure -A37 TRUE COPY OF THE LETTER DATED 19.04.2023
ISSUED BY THE APPLICANT .
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Annexure-A38 TRUE COPY OF THE LETTER DATED 17.06.2023
ISSUED BY THE APPLICANT
Annexure-A39 TRUE COPY OF THE LETTER DATED 10.07.2023
ISSUED BY THE RESPONDENT, ALONG WITH
ENCLOSURE
Annexure-A40 TRUE COPY OF THE LETTER DATED 20.07.2023
ISSUED BY THE RESPONDENT
Annexure -A41 TRUE COPY OF THE MINUTES OF THE MEETING DATED
04.08.2023
Annexure-A42 TRUE COPY OF THE MINUTES OF THE MEETING DATED
07.09.2023
Annexure-A43 TRUE COPY OF THE MINUTES OF THE MEETING DATED
20.09.2023
Annexure A44 TRUE COPY OF THE MINUTES OF THE MEETING DATED
06.10.2023
Annexure-A45 TRUE COPY OF THE LETTER DATED 06.09.2023
ISSUED BY THE APPLICANT
Annexure -A46 TRUE COPY OF THE LETTER DATED 19.09.2023
ISSUED BY THE APPLICANT WITH ENCLOSURES
Annexure-A47 TRUE COPY OF THE LETTER DATED 21.10.2023
ISSUED BY THE RESPONDENT.
Annexure -A48 TRUE COPY OF THE LETTER DATED 27.10.2023
ISSUED BY THE APPLICANT
Annexure-A49 . TRUE COPY OF THE LETTER DATED 27.10.2023
ISSUED BY THE APPLICANT
Annexure-A50 TRUE COPY OF THE LETTER DATED 05.12.2023
ISSUED BY THE RESPONDENT
Annexure-A51 TRUE COPY OF THE LETTER DATED 17.02.2024
ISSUED BY THE APPLICANT TO THE RESPONDENT
Annexure-A52 TRUE COPY OF THE LETTER DATED 17.02.2024
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ISSUED BY THE RESPONDENT
RESPONDENT ANNEXURES
Annexure R1(a) True copy of the Government order
No.GO(Rt)No.6/2017/Hand FWD dated 4.1.2017
Annexure R1(b) True copy of the tripartite agreement between
M/s.INKEL Ltd, Health and Family Welfare
Department and Kerala Infrastructure
Investment Fund Board (KIIFB) dated 29.7.2017
Annexure R1(c) true copy of the Hindrance Register
maintained at the site
Annexure R1(d) True copy of the letter dated 10.3.2020
submitted by the applicant
Annexure R1(e) True copy of the report submitted by Green
Lab Industrial and Environmental Solutions
(Pvt.) Ltd on 21-22 November 2019
Annexure R1(f) True copy of the report of the semi
destructive core test on RC columns conducted
by Bureau Veritas, an NABL Accredited Lab
Annexure R1(g) True copy of the letter dated 25.6.2020
issued by the applicant along with the test
lists
Annexure R1(h) True copy of the letter dated 29.11.2018
issued by the respondent to the applicant
Annexure R1(i) True copy of the letter dated 6.12.2018
issued by the respondent to the applicant
Annexure R1(j) True copy of the letter dated 6.3.2019 issued
by the respondent to the applicant
Annexure R1(k) True copy of the letter dated 8.4.2019 issued
by the respondent to the applicant
Annexure R1(l) The true copy of the letter dated 3.5.2019
issued by the respondent to the applicant
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Annexure R1(m) True copy of the letter dated 20.6.2019
issued by the respondent to the applicant
Annexure R1(n) True copy of the letter dated 2.7.2019 issued
by the respondent to the applicant
Annexure R1(o) true copy of the letter dated 22.7.2019
issued by the respondent to the applicant
Annexure R1(p) True copy of the letter dated 5.8.2019 issued
by the respondent to the applicant
Annexure R1(q) True copy of the letter dated 22.11.2019
issued by the respondent to the applicant
Annexure R1(r) True copy of the letter dated 23.7.2020
issued by the respondent to the applicant
Annexure R1(s) True copy of the W.P(C)No.2200/2021 dated
27.1.2021 filed by the applicant (without
documents) before this Honourable Court
Annexure R1(t) True copy of the counter affidavit dated
4.2.2021 in W.P(C)No.2200/2021 (without
documents) filed by the respondent before
this Honourable Court.
Annexure R1(u) True copy of the additional counter affidavit
dated 22.3.2021 in W.P(C)No.2200/2021
(without documents) filed by the respondent
before this Honourable Court
Annexure R1(v) true copy of the appeal memorandum dated
11.6.2021 in W.A.No.905/2021 filed by the
applicant before this Honourable Court
Annexure R1(w) True copy of the petition filed by the
applicant in CMA(Arb.)No.546/2021 before the
Commercial Court, Ernakulam dated 18.10.2021
Annexure R1(x) True copy of the counter affidavit filed by
this respondent in CMA(Arb)No.546/2021 dated
27.10.2021 before the Commercial Court,
Ernakulam
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Annexure R1(x)(1) True copy of the additional counter affidavit
filed by this respondent in
CMA(Arb)No.546/2021 dated 1.11.2021 before
the Commercial Court, Ernakulam
Annexure R1(y) True copy of the memo submitted by the
applicant in CMA(Arb.)No.546/2021 before the
Commercial Court, Ernakulam dated 29.10.2021
Annexure R1(z) True copy of the order dated 20.11.2021 in
I.A. Nos.2 and 3 of 2021 in CMA(Arb.) No.546
of 2021 of the Commercial Court, Ernakulam
Annexure R1(aa) True copy of the counter affidavit (without
documents) filed by the respondent in
A.R.No.115/2022 before this Honourable Court
dated 14.7.2022
Annexure R1(ab) True copy of the letter dated 24.11.2023
issued by the respondent to the applicant
Annexure R1(ac) ): True copy of the proceedings of Dispute
Redressal Committee of the respondent dated
28.11.2023
Annexure R1(ad) True copy of the proceedings of Dispute
Redressal Committee of the respondent dated
2.12.2023
Annexure R1(ae) True copy of the gate passes issued by the
respondent to the applicant to take away the
materials from the site
Annexure R1(af) True copy of I.A.No.26 of 2023 to withdraw
I.A.No.16 of 2021 in CMA(Arb.)No.546 of 2021
filed by the applicant before the Commercial
Court, Ernakulam dated 11.12 2023
