Allowed

M/S Mathra Dass Ahuja and Sons v. Delhi Tourism and Transportation Development Corporation Ltd.

Delhi HC3 Sept 2024ARB.P./757/2024

Case brief

AI extract

What is this about?

The petitioner filed a petition under Section 11(6) of the Arbitration and Conciliation Act, 1996 for appointment of an arbitrator. The Court found the two-tier dispute mechanism was substantially complied with despite the respondent's inaction and appointed a sole arbitrator.

What did the court decide?

Appointment of Mr. Chritarth Palli as Sole Arbitrator; directions issued for commencement of arbitration within two weeks.

M/S Mathra Dass Ahuja and Sons Vs Delhi Tourism and Transportation… — Arbitration | Delhi HC (2024)

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IN THE HIGH COURT OF DELHI AT NEW DELHI

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- ARB.P. 757/2024

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M/S MATHRA DASS AHUJA AND SONS .....Petitioner Through: Mr Avinash Trivedi, Mr Anurag Kaushik and Mr Rahul Aggarwal, Advs.

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versus

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DELHI TOURISM AND TRANSPORTATION DEVELOPMENT CORPORATION LTD .....Respondent Through: Ms Neha Bhatnagar, Adv. (through VC)

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CORAM:

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HON'BLE MR. JUSTICE JASMEET SINGH

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O R D E R % 03.09.2024

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This is a petition filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 seeking appointment of an Arbitrator for adjudication of disputes between the parties.

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The brief facts are that the respondent published a tender for execution of work of Construction of Bus Depot at Kharkhari Nahar Village, New Delhi and miscellaneous civil and electrical work.

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The petitioner duly participated in the said tender and was declared as a successful bidder and the respondent issued an acceptance letter bearing No. DTTDC/Engg/EE(JP)/Kharkhari Nahar/445 on 03.01.2020.

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The petitioner also submitted a performance bank guarantee followed by an agreement being executed between the parties bearing No.

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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 10/09/2024 at 12:09:54

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05/EE(JP)/DTTDC/2019-20 for a contractual amount of Rs 1,17,94,095/-.

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It is stated that the petitioner complied with its contractual obligations but on account of some disputes, the entire amount due and payable to the petitioner was not paid by the respondent.

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The arbitration clause is contained as Clause 25 of the Agreement which reads as under:

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“CLAUSE 25

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Settlement of Disputes & Arbitration

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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 herein before mentioned and as to the 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 or if the Engineer in Charge considers any act or decision of the contractor on any matter in connection with or arising out of the contract or carrying out of the work, to be unacceptable and is disputed, such party shall promptly within 15 days of the arising of the disputes request the Chief Engineer/ CPM, or where there is no Chief Engineer/CPM, request the Additional Director General/Special Director General ,who shall refer the disputes to Dispute Reressal Committee (DRC) within 15 days along with a list of disputes with amounts claimed if any in respect of each such dispute. The Dispute Redressal Committee (DRC) give its decision within a period of 60 days extendable by 30 days by consent of

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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 10/09/2024 at 12:09:54

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both the parties from the receipt of reference from CE/CPM/ADG/SDG. The constitution of Dispute Redressal Committee (DRC) shall be as indicated in Schedule 'F'. Provided that no party shall be represented before the Dispute Redressal Committee by an advocate/legal counsel etc.

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The DRC will submit its decision to the concerned ADG/SDG for acceptance. ADG/ SDG in a time limit of 30 days from receipt of DRC decision will convey acceptance or otherwise on the said decision . If the Dispute Redressal Committee (DRC) fails to give its decision within the aforesaid period or the ADG/SDG fails to give his decision in the aforesaid time limit or any party is dissatisfied with the decision of Dispute Redressal Committee (DRC)/ADG/ SDG the neither party may within a period of 30 days from the receipt of the decision of Dispute Redressal Committee (DRC)/ ADG/ SDG or on expiry of aforesaid the time limits available to DRC/ADG/SDG may give notice to the Chief Engineer/CPM, CPWD, in charge of the work or if there be no Chief Engineer/ CPM, the Additional Director General /Special Director General of the concerned region of CPWD or if there be no Additional Director General/ Special Director General, the Director General, CPWD for appointment of arbitrator on prescribed proforma as per Appendix XVII under intimation to the other party.

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It is the 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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The CE/CPM/ADG/ SDG shall in such case appoint the sole arbitrator or one of the three arbitrators as the case may be within 30 days of receipt of such a request and refer such disputes to arbitration. Wherever the Arbitral Tribunal consists of three Arbitrators, the contractor shall appoint one arbitrator within 30 days of making request for arbitration or of receipt of request by Engineer-incharge to CE/ADG/ SDG /DG for appointment of arbitrator, as the case may be, and two appointed arbitrators shall appoint the third arbitrator who shall act as the Presiding Arbitrator.

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In the event of

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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 10/09/2024 at 12:09:54

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a. A party fails to appoint the second Arbitrator, or

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b. The two appointed Arbitrators fail to appoint the Presiding Arbitrator, then the Director General, CPWD shall appoint the second or Presiding Arbitrator as the case may be.

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(ii) Dispute or difference shall be referred for adjudication through arbitration by, a Tribunal having sole arbitrator where claimed amount is Rs. 20 Crore or less. Where claimed Value is more than Rs. 20 Crore, Tribunal shall consist of three Arbitrators as above. The requirements of the Arbitration and Conciliation Act, 1996 (26 of 1996) and any further statutory modification or reenactment thereof and the rules made there under and for the time being in force shall be applicable.

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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, if any, in respect of each such dispute along with the notice for appointment of arbitrator and giving reference to the decision of the ADG/ SDG on the finding / recommendation of DRC.

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It is also a term of this contract that member(s) of the Arbitration Tribunal shall be a Graduate Engineer with experience in handling public works engineering contracts, and further he shall have earlier worked at a level not lower than Chief Engineer/ equivalent (i.e. Joint Secretary level of Government of India). This shall be treated as a mandatory qualification to be appointed as arbitrator.

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Parties, before or at the time of appointment of Arbitral Tribunal may agree in writing for fast track arbitration as per the Arbitration and Conciliation Act, 1996 (26 of 1996) as amended in 2015

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Subject to provision in the Arbitration and Conciliation Act, 1996 (26 of 1996) as amended in 2015 whereby the counter claims if any can be directly filed before the arbitrator without any requirement of reference by the appointing authority. 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.

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It is also a term of the contract that fees payable to arbitral

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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 10/09/2024 at 12:09:54

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tribunal shall be as approved by DG, CPWD, OM issued vide no.2/2006/SE(TLC)/CSQ/137 dated 19-11-2019 (or its latest amendment as approved by DG, CPWD). This fee shall be shared equally by parties.

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The place of arbitration shall be as mentioned in Schedule F. In case there is no mention of place of arbitration, the arbitral tribunal shall determine the place of arbitration.

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The venue of the arbitration shall be such place as may be fixed by the Arbitral Tribunal in consultation with both the parties. Failing any such agreement, then the Arbitral Tribunal shall decide the venue.”

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Since there were disputes between the parties, the petitioner invoked arbitration vide legal notice dated 09.04.2024

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Hence, the present petition has been filed. 9. Notice in the present petition was issued on 27.05.2024 and on 25.07.2024, the respondent was granted two weeks to file a response, however, no response has been filed till today.

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Ms Bhatnagar, learned counsel for the respondent seeks some more time to file a reply. I am not inclined to grant further time for file a reply. 11. Ms Bhatnagar, learned counsel for the respondent states that as per Clause 25(i) of the Agreement there was a two tier mechanism under which the petitioner had to primarily refer the disputes to DRC and after the DRC has given its decision, the petitioner would approach the Court seeking appointment of an Arbitrator.

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As per clause 25(i) of the agreement the petitioner was to approach the Chief Engineer/CPM who was to refer the disputes to DRC. In case the petitioner was aggrieved by the decision of DRC, the petitioner was required to approach the Additional Director General for appointment.

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A perusal of the documents show that on 19.10.2023 the petitioner

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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 10/09/2024 at 12:09:54

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approached the Chief Project Manager seeking request for constitution of DRC and the said letter was not responded by the respondent. Since there was no response, the petitioner could not approach the Additional Director General.

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The petitioner thereafter on 18.11.2023 wrote another letter requesting that since no DRC was constituted an independent Arbitrator be appointed and the said letter was also not adverted to by the respondent.

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On 09.04.2024 the petitioner again wrote a letter to the Managing Director seeking appointment of an Arbitrator, however, the respondent did not respond to the said letter..

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For the said reasons, I am satisfied that the requirement under Clause 25(i) of the Agreement has been substantially complied with.

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For the said reasons, the petition is allowed. Since the parties are still having disputes between them, the following directions are issued:-

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i) Mr. Chritarth Palli, Advocate (Mob. No. 9888277971) is appointed as a Sole Arbitrator to adjudicate the disputes between the parties.

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ii) 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 parties, including as to the arbitrability of any of the claim, any other preliminary objection, as well as claims/counter-claims and merits of the dispute of either of the parties, are left open for

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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 10/09/2024 at 12:09:54

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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 SEPTEMBER 3, 2024/ sr Click here to check corrigendum, if any

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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 10/09/2024 at 12:09:54

M/S Mathra Dass Ahuja and Sons v. Delhi Tourism and Transportation Development Corporation Ltd.

Case brief

What is this about?

What did the court decide?

M/S Mathra Dass Ahuja and Sons v. Delhi Tourism and Transportation Development Corporation Ltd.

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

Case details

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