M/S Hemkund Steel Industry (A-1088) Vs Union of India and Ors. — Arbitration | Calcutta HC (2026)

M/S Hemkund Steel Industry (A-1088) Vs Union of India and Ors. — Arbitration | Calcutta HC (2026)

What the court decided

AI extract

Outcome

Appointment of Hon'ble Justice T. S.Sivagnanam, former Chief Justice of this Court, as Sole Arbitrator to adjudicate the disputes and differences between the parties; arbitrator entitled to fix his fees in consultation with the parties; venue of arbitration left to the arbitrator in consultation with the parties; costs of accommodation, air tickets, secretarial assistance, venue charges and incidental expenses to be shared equally by the parties.

Issue for consideration

Whether a sole arbitrator should be appointed to adjudicate the disputes and differences between the petitioner and the respondents arising from execution of the work under tender bid number 975524, the contractual appointment mechanism having been eliminated. +1 more

Court's answer

The contractual mechanism providing for appointment of the arbitrator by the Engineer-in-Chief, the officer officiating as Engineer-in-Chief, the Director General of Works or the Contract of Works has stood eliminated in view of the amendment to the Arbitration and Conciliation Act, 1996 followed by Supreme Court judgments starting from TRF Limited v. Energo Engineering Projects Limited (2017) 8 SCC 377.

Ratio / Principle

The arbitration agreement between the parties is in subsistence.

Key takeaways

The claims made by the petitioner are live claims and not stale ones; the arbitration agreement has been duly invoked; and the respondents failed to suggest a name of arbitrator after the appointment mechanism under the arbitration agreement stood eliminated.ratio¶17
The Court appointed Hon'ble Justice T. S.Sivagnanam, former Chief Justice of this Court, as the Sole Arbitrator to enter into the reference and adjudicate the disputes and differences between the parties.ratio¶18
The learned Arbitrator so appointed shall be entitled to fix his fees in consultation with the parties, in view of the ratio laid down in Oil and Natural Gas Corporation Limited vs. Afcons Gunanusa JV (2024) 4 SCC 481.

Detailed headnote1 paragraphs

Arbitration and Conciliation Act, 1996 — appointment of sole arbitrator — contractual mechanism vesting appointment in the Engineer-in-Chief, the officer officiating as Engineer-in-Chief, the Director General of Works or the Contract of Works stood eliminated in view of the amendment to the Act and Supreme Court judgments beginning with TRF Limited v. Energo Engineering Projects Limited (2017) 8 SCC 377 — arbitration agreement in subsistence and duly invoked — petitioner's claims held live and not stale — respondents failed to suggest a name of arbitrator — High Court at Calcutta (Circuit Bench at Port Blair) appointed Hon'ble Justice T. S.Sivagnanam, former Chief Justice of the Court, as Sole Arbitrator — arbitrator's fees to be fixed in consultation with the parties in view of the ratio in Oil and Natural Gas Corporation Limited vs. Afcons Gunanusa JV (2024) 4 SCC 481 — venue left to the arbitrator in consultation with the parties — accommodation, travel, secretarial, venue and incidental costs of the sittings to be shared equally — proceedings to be governed by the 1996 Act and the laws of India — AP/18/2025 disposed of.

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IN THE HIGH COURT AT CALCUTTA

[ CIRCUIT BENCH AT PORT BLAIR ]

AP/18/2025

M/s Hemkund Steel Industry (A-1088)

Vs.

Union of India and others

Mr. Akash Shukla

[through virtual mode] Mr. Ruban Antony …for the petitioner Mr. V.D. Sivabalan … for the respondents

January 6, 2026 [SR] Item No.18

After hearing the parties, it appears that the disputes and differences have arisen between the parties in connection with execution of a work allotted to the petitioner being the successful bidder under the tender being bid number 975524. The work value is Rs.9,76,01,769.40. The contract provided for a mechanism of resolution of disputes by invoking clause 7(b) of the subject tender. That apart clauses 70 and 71 of the General Conditions of Contract (in short GCC) was made part of the tender conditions. The arbitration mechanism as provided in Clause 7 (b) of the tender conditions as also in Clauses 70 and 71 of GCC for adjudication of disputes by a sole arbitrator.

The arbitration agreement between the parties are in subsistence but the mechanism which provides for appointment of an arbitrator by the Engineer-in-Chief or in absence the officer officiating as the Engineer-in-Chief or the Director General of Works or the Contract of Works has stood eliminated in view of the amendment in the Arbitration and Conciliation

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Act, 1996 followed by several Supreme Court’s judgments starting from TRF Limited –vs- Energo Engineering Projects

Limited (2017) 8 SCC 377.

It is also prima facie apparent that the claims made by the petitioner are live claims and are not stale ones. The arbitration agreement has been duly invoked. There has also been failure on the part of the respondent to suggest a name of Arbitrator since the appointment mechanism under the arbitration agreement as stated hereinabove stood eliminated.

In the aforesaid facts and circumstances, I appoint the Hon’ble Justice T. S.Sivagnanam, former Chief Justice of this Court as the Sole Arbitrator to enter into the reference and adjudicate the disputes and differences between the parties. The learned Arbitrator so appointed shall be entitled to fix his fees in consultation with the parties in view of the ratio laid down in the judgment of the Hon’ble Supreme Court reported in (2024) 4 SCC 481 (Oil and Natural Gas Corporation

Limited vs. Afcons Gunanusa JV).

The learned Arbitrator shall also be free to decide on the venue of the arbitration in consultation with the parties. The parties shall ensure appropriate accommodation and air tickets befitting to the standards of the learned Arbitrator for holding the arbitration sittings and share the cost thereof equally amongst themselves. The cost of secretarial assistance to the learned Arbitrator, the venue charges and other incidental expenses for holding the arbitral sittings shall be shared by the parties equally on actual basis. The arbitration proceedings

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shall be held in accordance with the Arbitration and Conciliation Act, 1996 as applicable and in terms of the laws of India.

AP/18/2025 is accordingly disposed of.

( Arindam Mukherjee, J. )