Allowed

Naresh Kumar Gupta and Co. Pvt. Ltd. v. Delhi Tourism and Transportation Development Corporation Ltd. - Dttdc

Delhi HC11 Jan 2024ARB.P./443/2022

Case brief

AI extract

What is this about?

In an arbitration petition, the Delhi High Court examined the invocation of arbitration under Clause 25 of the General Conditions of Contract. Finding prima facie compliance with the pre-arbitration dispute mechanism, the court appointed a sole arbitrator and disposed of the petition.

What did the court decide?

Appointment of Mr. Ram Watel as Sole Arbitrator; arbitration to be held under DIAC.

Naresh Kumar Gupta and Co. Pvt. Ltd. Vs Delhi Tourism… — Company and Corporate | Delhi HC (2024)

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IN THE HIGH COURT OF DELHI AT NEW DELHI

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- ARB.P. 443/2022

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NARESH KUMAR GUPTA AND CO. PVT. LTD...... Petitioner Through: Mr. Arun Sharma, Adv.

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versus

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DELHI TOURISM AND TRANSPORTATION DEVELOPMENT CORPORATION LTD. – DTTDC ..... Respondent

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Through: Ms. Shobhana Takiar, Mr. Kuljeet Singh, Advs.

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CORAM: HON'BLE MR. JUSTICE JASMEET SINGH

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O R D E R % 11.01.2024

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This is a petition seeking appointment of an Arbitrator for adjudication of the disputes between the parties.

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A perusal of the reply shows that the respondent has averred that the entire amount has been paid to the petitioner.

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Since the petitioner is disputing the amount paid by the respondent as full and final payable amount and states that more amounts are payable, these are questions which will have to be decided by the Arbitrator.

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The arbitration clause is contained as Clause 25 in “General Conditions of Contract” and reads as under:

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“ CLAUSE 25

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Except where otherwise provided in the contract, all questions and disputes relating to the meaning of the specifications, design, drawings and instructions here-in before mentioned and as to the

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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 01/07/2025 at 23:45:15

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quality of workmanship or materials used on the work or as to any other question, claim, right, matter or thing whatsoever in any way arising out of or relating to the contract, designs, drawings, specifications, estimates, instructions, orders or these conditions or otherwise concerning the works or the execution or failure to execute the same whether arising during the progress of the work or after the cancellation, termination, completion or abandonment thereof shall be dealt with as mentioned hereinafter:

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(i) If the contractor considers any work demanded of him to be outside the requirements of the contract, or disputes any drawings, record or decision given in writing by the Engineer- in-Charge on any matter in connection with or arising out of the contract or carrying out of the work, to be unacceptable, he shall promptly within 15 days request the Superintending Engineer in writing for written instruction or decision. Thereupon, the Superintending Engineer shall give his written instructions or decision within a period of one month from the receipt of the contractor's letter.

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If the Superintending Engineer fails to give his instructions or decision in writing within the aforesaid period or if the contractor is dissatisfied with the instructions or decision of the Superintending Engineer, the contractor may, within 15 days of the receipt of Superintending Engineer's decision, appeal to the Chief Engineer who shall afford an opportunity to the contractor to be heard, If the latter so desires, and to offer evidence in support of his appeal. The Chief Engineer shall give his decision within 30 days of receipt of contractor's appeal. If the contractor is dissatisfied with the decision of the Chief Engineer, the contractor may within 30 days from the receipt of the Chief Engineer decision, appeal before the Dispute Redressal Committee (DRC) along with a list of disputes with amounts claimed in respect of each such dispute and giving reference to the rejection of his disputes by the Chief Engineer. The Dispute Redressal Committee (DRC) shall give his decision within a period of 90 days from the receipt of Contractor's appeal. The constitution of Dispute Redressal Committee (DRC) shall be as indicated in Schedule 'F'. If the Dispute Redressal Committee (DRC) fails

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to give his decision within the aforesaid period or any party is dissatisfied with the decision of Dispute Redressal Committee (DRC), then either party may within a period of 30 days from the receipt of the decision of Dispute Redressal Committee (DRC), give notice to the Chief Engineer for appointment of arbitrator on prescribed proforma as per Appendix XV, failing which the said decision shall be final binding and conclusive and not referable to adjudication by the arbitrator.

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It is a term of contract that each party invoking arbitration must exhaust the aforesaid mechanism of settlement of claims/disputes prior to invoking arbitration.

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(ii) Except where the decision has become final, binding and conclusive in terms of Sub Para (1) above, disputes or difference shall be referred for adjudication through arbitration by a sole arbitrator appointed by the Chief Engineer, CPWD, in charge of the work or if there be no Chief Engineer, the Additional Director General of the concerned region of CPWD or if there be no Additional Director General, the Director General, CPWD. If the arbitrator so appointed is unable or unwilling to act or resigns his appointment or vacates his office due to any reason whatsoever, another sole arbitrator shall be appointed in the manner aforesaid. Such person shall be entitled to proceed with the reference from the stage at which it was left by his predecessor.

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It is a term of this contract that the party invoking arbitration shall give a list of disputes with amounts claimed in respect of each such dispute along with the notice for appointment of arbitrator and giving reference to the rejection by the Chief Engineer of the appeal.

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It is also a term of this contract that no person, other than a person appointed by such Chief Engineer CPWD or Additional Director General or Director General, CPWD, as aforesaid, should act as arbitrator and if for any reason that is not possible, the matter shall not be referred to arbitration at all.

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It is also a term of this contract that if the contractor does not

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make any demand for appointment of arbitrator in respect of any claims in writing as aforesaid within 120 days of receiving the intimation from the Engineer-in-charge that the final bill is ready for payment, the claim of the contractor shall be deemed to have been waived and absolutely barred and the Government shall be discharged and released of all liabilities under the contract in respect of these claims. The arbitration shall be conducted in accordance with the provisions of the Arbitration and Conciliation Act, 1996 (26 of 1996) or any statutory modifications or re-enactment thereof and the rules made thereunder and for the time being in force shall apply to the arbitration proceeding under this clause.

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It is also a term of this contract that the arbitrator shall adjudicate on only such disputes as are referred to him by the appointing authority and give separate award against each dispute and claim referred to him and in all cases where the total amount of the claims by any party exceeds Rs. 1,00,000/-, the arbitrator shall give reasons for the award. It is also a term of the contract that if any fees are payable to the arbitrator, these shall be paid equally by both the parties. It is also a term of the contract that the arbitrator shall be deemed to have entered on the CPWD reference on the date he issues notice to both the parties calling them to submit their statement of claims and counter statement of claims. The venue of the arbitration shall be such place as may be fixed by the arbitrator in his sole discretion. The fees, if any, of the arbitrator shall, if required to be paid before the award is made and published, be paid half and half by each of the parties. The cost of the reference and of the award (including the fees, if any, of the arbitrator) shall be in the discretion of the arbitrator who may direct to any by whom and in what manner, such costs or any part thereof shall be paid and fix or settle the amount of costs to be so paid .”

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As per the arbitration clause, the petitioner approached the Superintending Engineer for dispute resolution vide letter dated 05.05.2000,

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who rejected the claims vide letter dated 10.06.2020. The petitioner then appealed to the Chief Engineer vide letter dated 19.10.2020. On receiving no response, vide letter dated 05.01.2021, the petitioner approached the Chief Engineer for settlement of dispute by the Dispute Redressal Committee (“DRC”). Vide letter dated 15.01.2021, the Chief Engineer rejected the claims of the petitioner. Further, the matter was not taken up by the DRC and it failed to give a decision within 90 days from the request, as stipulated in Clause 25. Thereafter, the notice to appoint an Arbitrator was given on 04.05.2021 and subsequently on 08.07.2021. However, despite service, no Arbitrator has been appointed.

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In my view, there is prima facie compliance with the invocation mechanism of dispute resolution as stipulated in Clause 25.

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For the said reasons, the following directions are passed:

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i) Mr. Ram Watel, Adv. (Mob. No.- 9810031696) is appointed as a Sole Arbitrator to adjudicate the disputes between the parties.

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ii) The arbitration will be held under the aegis of the Delhi International Arbitration Centre, Delhi High Court, Sher Shah Road, New Delhi hereinafter, referred to as the „DIAC‟). The remuneration of the learned Arbitrator shall be in terms of the Fourth Schedule of the Arbitration & Conciliation Act, 1996.

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iii)The learned Arbitrator is requested to furnish a declaration in terms of Section 12 of the Act prior to entering into the reference.

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iv) It is made clear that all the rights and contentions of the

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parties, including as to the arbitrability of any of the claim, any other preliminary objection, as well as claims on merits of the dispute of either of the parties, are left open for adjudication by the learned arbitrator.

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v) The parties shall approach the learned Arbitrator within two weeks from today.

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The petition is allowed and disposed of in the aforesaid terms.

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JASMEET SINGH, J

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JANUARY 11, 2024/DM Click here to check corrigendum, if any

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Naresh Kumar Gupta and Co. Pvt. Ltd. v. Delhi Tourism and Transportation Development Corporation Ltd. - Dttdc

Case brief

What is this about?

What did the court decide?

Naresh Kumar Gupta and Co. Pvt. Ltd. v. Delhi Tourism and Transportation Development Corporation Ltd. - Dttdc

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

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