Allowed

Ms Bch Electric Ltd. v. NTPC Bhel Power Projects Pvt. Ltd. and Anr.

Delhi HC6 Aug 2024ARB.P./1030/2022

Case brief

AI extract

What is this about?

The Delhi High Court allowed a petition under Section 11 of the Arbitration Act, 1996. Rejecting the argument that the case was barred by limitation, the court relied on recent Supreme Court precedents and exercised its limited jurisdiction merely to confirm the existence of an arbitration agreement. The parties were referred to an arbitrator.

What did the court decide?

The petition was allowed; disputes were referred to arbitration of Mr. Rakesh Kumar Dudeja under DIAC rules.

Ms Bch Electric Ltd. Vs NTPC Bhel Power Projects Pvt. Ltd. and Anr. — Arbitration | Delhi HC (2024)

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$~2

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IN THE HIGH COURT OF DELHI AT NEW DELHI

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ARB.P. 1030/2022 MS BCH ELECTRIC LTD .....Petitioner Through: Ms. Ekta Choudhary, Mr. Divyank Dutt Dwivedi & Ms. Aditi Sharma, Advocates.

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versus

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NTPC BHEL POWER PROJECTS PVT LTD AND ANR .....Respondents Through: Mr. Puneet Taneja, Mr. Manmohan Singh Narula, Mr. Anil Kumar & Mr. Amit Yadav, Advocates.

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CORAM: HON’BLE MR. JUSTICE PRATEEK JALAN

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O R D E R

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% 06.08.2024

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The petitioner has filed this petition under Section 11 of the Arbitration and Conciliation Act, 1996 [“the Act”], seeking appointment of an arbitrator to adjudicate disputes between the parties under a purchase order dated 26.09.2012 and amended/supplementary purchase orders thereto, read with General Conditions of Contract (Procurement) dated 07.10.2010 [“GCC”], for works to be carried out at the respondents’ Tripura Gas Based Combine Cycle Power Plant at Monarchak, Tripura.

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Clause 33 of the ‘general commercial terms & conditions’ in the GCC, provides for resolution of disputes by arbitration. New Delhi has

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Page 1 of 4

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ARB.P. 1030/2022

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This is a digitally signed order.

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The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 09/08/2024 at 12:21:11

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been designated as the venue of arbitration. Although the clause provides for the arbitrator to be appointed by the respondents, learned counsel for the parties accept that such unilateral appointment is impermissible in view of the decisions of the Supreme Court in TRF Limited vs. Energo Engineering Projects Limited [(2017) 8 SCC 377] and Perkins Eastman Architects DPC vs. HSCC (India) Limited [(2020) 20 SCC 760].

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Disputes having arisen between the parties, the petitioner invoked arbitration by a legal notice dated 13.01.2022, to which it did not receive a response.

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In the course of the present proceedings, the parties were referred to mediation, but have been unable to arrive at a settlement.

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Mr. Puneet Taneja, learned counsel for the respondents, resists a reference to arbitration on the ground that the petitioner’s claims are ex facie barred by limitation. He submits that the petitioner’s cause of action arose in the year 2015 and the petitioner’s pleadings themselves will show that no proceedings were commenced until issuance of the invocation notice on 13.01.2022.

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While Ms. Ekta Choudhary, learned counsel for the petitioner, disputes this position, I am of the view that it is unnecessary for the referral Court to address this question in view of the recent judgment of the Supreme Court in SBI General Insurance Co. Ltd. v. Krish Spinning [2024 SCC OnLine SC 1754]. The Supreme Court has held that the limited jurisdiction exercised by the referral Court under Section 11 of the Act, in terms of several decisions of the Supreme Court, including Vidya Drolia vs. Durga Trading Corporation [(2021) 2 SCC 1], Bharat

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Page 2 of 4

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ARB.P. 1030/2022

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This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 09/08/2024 at 12:21:11

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Sanchar Nigam Limited vs. Nortel Networks India Private Limited [(2021) 5 SCC 738] and NTPC Ltd. v. SPML Infra Ltd. [(2023) 9 SCC 385], requires reconsideration in view of the judgment of the seven judge bench in Interplay Between Arbitration Agreements under A&C Act, 1996 & Stamp Act, 1899, In re [(2024) 6 SCC 1]. The position, as explained by the Supreme Court, is that the jurisdiction of the referral Court is limited to a prima facie examination with regard to the existence of the arbitration agreement, and does not encompass any contentious issue of arbitrability or maintainability, including questions of limitation or accord and satisfaction. The Supreme Court held that such an enquiry falls wholly within the domain of the arbitral tribunal, consistent with the doctrine of Kompetenz-Kompetenz .

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As no other issue has been raised by Mr. Taneja, I am of the view that the appropriate course is to refer the parties to arbitration, reserving the rights and contentions of the parties on all points, including limitation, for adjudication by the learned arbitrator. 8. The petition is consequently allowed and disputes between the parties, under the purchase order dated 26.09.2012 and amended/supplementary purchase orders thereto, are referred to arbitration of Mr. Rakesh Kumar Dudeja, Advocate [Tel: 9810147798]. The arbitration will be held under the aegis of Delhi International Arbitration Centre, Delhi High Court, Shershah Road, New Delhi [“DIAC”], and will be governed by the Rules of DIAC, including as to remuneration of the learned arbitrator.

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The learned arbitrator is requested to furnish a declaration under

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ARB.P. 1030/2022

Section 12 of the Act, prior to entering upon the reference. 10. It is made clear that all rights and contentions, including on the point of limitation are left for consideration by the learned arbitrator.

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PRATEEK JALAN, J

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AUGUST 6, 2024 ‘pv’/

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Page 4 of 4

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ARB.P. 1030/2022

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This is a digitally signed order.

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The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 09/08/2024 at 12:21:11

Ms Bch Electric Ltd. v. NTPC Bhel Power Projects Pvt. Ltd. and Anr.

Case brief

What is this about?

What did the court decide?

Ms Bch Electric Ltd. v. NTPC Bhel Power Projects Pvt. Ltd. and Anr.

Case brief

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What did the court decide?

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