IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 21ST DAY OF NOVEMBER, 2019 BEFORE THE HON’BLE MR.JUSTICE B. VEERAPPA CIVIL MISCELLANEOUS PETITION NO.298/2018 BETWEEN:
M/s. CCC Builders Merchant Private Limited C-06 1A, Supermart-1 DLR City Phase IV Gurugram, Haryana PIN : 122 002 Represented by its Executive Director Mr. Gaurav Hota (By Sri Shivakumar S, Advocate) AND:
New Mangalore Port Trust Panambur, Mangalore-575010 Represented by its Chairman On behalf of Board of Trustees (By Sri Suhaas, Advocate for Sri Prashant Popat, Advocate) ... Petitioner ... Respondent This Civil Miscellaneous Petition is filed under Sections 11(5) and 11(6) of the Arbitration and Conciliation Act 1996, praying this Court to pass an order to appoint the sole Arbitrator to adjudicate the disputes between the petitioner and the respondent as per Section 11(5) and (6) of the Arbitration and Conciliation Act, 1996, vide Annexure-C agreement, etc.
This Civil Miscellaneous Petition coming on for admission this day, the Court made the following:
ORDER The petitioner has filed the present Civil Miscellaneous Petition under the provisions of Section 11(5) and 11(6) of the Arbitration and Conciliation Act, 1996 (for short the ‘Act’) for appointment of Sole Arbitrator to adjudicate the dispute in terms of clause 67.3 and amended clause 67.3(a) and (b) of the Agreement dated 14.09.2011 entered into between the parties.
2. It is the case of the petitioner that the petitioner-CCC Builders Merchant Private Limited is a private limited company registered under the Indian Companies Act, 1956 and having its Office at C-06, 1A, Supermart-1, DLF City, Phase-IV, Gurugram-122 002.
3. That the respondent on 09.10.2011 calls for a tender for Strengthening and Extension of Container Yard at NMPT with paver blocks-Balance Work at the risk & cost of M/s Niraj Cement Structurals, Ltd.’ The petitioner has participated in the tender on 04.11.2010. The respondent issued letter of acceptance to the petitioner on 01.04.2011. Accordingly both the parties have entered into an agreement dated 14.09.2.011 and the petitioner completes the designated work on 02.08.2014. On 19.03.2015, the respondent paid Rs.4,77,28,100.00 (Rupees Four Crores Seventy Seven Lakhs Twenty Eight Thousand and One hundred only) towards the work carried out by the petitioner, after deducting an amount of Rs.59,10,786/- (Fifty-nine lakhs Ten thousand Seven hundred and Eighty-six only) towards liquidated damages from the above mentioned amount of Rs.4,77,28,100/- while paying the final payment to the petitioner after deducting the Liquidity Damages. The petitioner issued notice to the respondent on 07.04.2016 claiming balance of Rs.2,07,10,786/- (Two Crores Seven Lakhs Ten Thousand Seven hundred and Eighty-six only). On 30.05.2016 the respondent replied the notice and the claim of the petitioner has been rejected. Therefore on 10.01.2018, the petitioner sent Arbitration notice to the respondent in terms of clause 67.3 of the Contract for appointing a Sole Arbitrator. On 31.01.2018, the respondent issued reply insisting on appointment of a panel of Arbitrators instead of a sole Arbitrator. Therefore the petitioner is before this Court for the relief sought for.
4. The respondent filed objections contending that there is a delay in issuing notice. It is further contended that, it is the petitioner who violated the conditions of the agreement and contended that in the reply notice itself it is specifically stated by the respondent to appoint panel of Arbitrators and sought dismiss the Civil Miscellaneous petition.
5. I have heard the learned counsel for the parties to the lis.
6. It is not in dispute the existence of agreement dated 14.09.2011 and the Arbitrator clause at 67.3 and amended clause 67.3(a) and 67.3(b) which reads as under:
67.3 Arbitration:
Any dispute in respect of which:
(a) the decision, if any, of the Engineer has not been become final and binding pursuant to Sub-clause 67.1 and (b) Amicable settlement has not been reached within the period stated in Sub-clause 67.2, Shall be finally settled, unless otherwise specified in the contract, under the Rules of Conciliation and Arbitration of the International Chamber of Commence by one or more arbitrators appointed under such Rules. The said arbitrator/s shall have full power to open up, review and revise any decision, opinion, instruction, determination, certificate or valuation of the Engineer related to the dispute.
Neither party shall be limited in the proceedings before such arbitrator/s to the evidence or arguments put before the Engineer for the purpose of obtaining his said decision pursuant to Sub-clause 67.1. No such decision shall disqualify the Engineer from being called as a witness and giving evidence before the arbitrator/s on any matter whatsoever relevant to the dispute.
Arbitration may be commenced prior to or after completion of the works, provided that the obligations of the Employer, the Engineer and the contractor shall not be altered by the reason of the arbitration being conducted during the progress of the Works.
Substitute Sub-clause 67.3 by the following: Any dispute in respect of which:
a) the decision, if any of the Engineer has not become final and binding pursuant to Sub- clause 67.1 and b) Amicable settlement has not been reached within the period stated in Sub-clause 67.2 shall be finally settled by Arbitration in accordance with the Arbitration and Conciliation Act, 1996 and the rules made thereunder and any statutory amendment thereof. Arbitration proceedings shall be held at Panambur, Mangalore, India and Court of jurisdiction shall be district Court, D.K.District, Mangalore. The language of the arbitration proceedings and that of all documents and communications between the parties shall be in English. The arbitration award shall be speaking award.
The reference to arbitration may proceed not withstanding that the work shall not be or be alleged to be complete, provided always that the obligations of the Employer, the Engineer and the Contractor shall not be altered by reason of the arbitration being conducted during the progress of the works. Neither party shall be entitled to suspend the works, and payments to the Contractor shall continue to be made as provided by the Contract.
The decision of the majority of the arbitrators shall be final and binding upon both parties. The expenses of arbitrators as determined by the arbitrators shall be shared equally by the Employer and the Contractor. However, the expenses incurred by each party in connection with the preparation, presentation, etc., of its case prior to, during and after the arbitration proceedings shall be borne by each party itself.
All arbitration awards shall be in writing and shall state the reasons for the award.
7. It is also not in dispute that the petitioner issued legal notice as contemplated under the provisions of Section 11(5) of the Act and the same was replied by the respondent wherein it is specifically stated by the respondent to appoint panel of Arbitrators, which means there is no dispute with regard to appointment of Arbitrator. At this stage, learned counsel for the petitioner fairly submits that the amended arbitration clause at 67.3(a) and (b) stipulates the arbitration to be held at Mangalore by the Panel of Arbitrators. Therefore both the counsel for the parties fairly and rightly submits that the sole Arbitrator may be appointed and the arbitration proceedings can be conducted at Arbitration Centre, Bengaluru. Said submission is placed on record. In view of the said submission, there is no impediment for this Court to appoint Sole Arbitrator to adjudicate the dispute between the parties.
8. For the reasons stated above, the Civil Miscellaneous Petition is allowed. Dr. Justice N.Kumar, Former Judge of this Court is appointed as sole Arbitrator to adjudicate the dispute in terms of clause 67.3 and amended clause 67.3(a) and (b) of the agreement dated 14.09.2011 entered into between the parties.
9. Registry is directed to send a copy of this order to Dr. Justice N.Kumar, Former Judge of this Court as well and Arbitration Centre forthwith for reference.
KMV* SD/- JUDGE