Allowed

M/S R. K. Infra (India) Pvt. Ltd. v. the Secretary

Karnataka HC21 Jun 2021CMP/190/2021

Case brief

AI extract

What is this about?

Under Section 11(6) of the Arbitration and Conciliation Act, 1996, the High Court ordered the appointment of a sole arbitrator for a construction dispute. The Court allowed the petition despite the respondents' argument that the dispute was stale because the petitioner approached the Court beyond the 30-day limit stipulated in the contract.

What did the court decide?

Petition allowed to appoint Sri. Venkatasudarshana as the sole arbitrator. All contentions regarding the validity of termination and time-bar are left open for arbitration.

M/S R. K. Infra (India) Pvt. Ltd. Vs the Secretary — Arbitration | Karnataka HC (2021)

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 21^ST DAY OF JUNE, 2021

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BEFORE

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THE HON’BLE Mr. JUSTICE B.M. SHYAM PRASAD

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C.M.P. No. 190/2021

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BETWEEN :

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M/s. AR.K. Infra (India) Pvt. Ltd., Sri. Laxmi-Nivasa Near OmShree School M.V. Extension Hosakote Town Bangalore – 562 114 Rep. by its Managing Director Sri. G. Mohankumar. … PETITIONER

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(By Smt. K. Shobha, Adv.)

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AND :

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The Secretary The Karnataka Legislative Assembly Secretariat Vidhanasoudha Dr. Ambedkar Veedhi Bangalore – 1.

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Estate Officer/Dy. Secretary The Karnataka Legislative Assembly Secretariat Vidhanasoudha

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Dr. Ambedkar Veedhi

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Bangalore – 1. … RESPONDENTS

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(By Sri. A.R. Srinivasa, AGA)

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This CMP is filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 with a prayer to appoint sole arbitrator for adjudication of disputes between the petitioner and respondents in respect of disputes and outstanding issues between the parties in accordance with the provisions of Agreement (Annexure-E) dated 17.03.2018 and etc.

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This CMP coming on for Admission through Video Conferencing this day, the Court passed the following;

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O R D E R

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The petitioner asserts that it is a Class-I Civil and Architectural Contractor, and has filed this petition invoking Clause 24.1 of the General Conditions of Contract which provides for procedure for resolution of the dispute. The Clause 24 of the General Conditions of Contract relied upon by the petitioner reads as follows:

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“ 24. Procedure for resolution of Disputes:

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24.1 If the Contractor is not satisfied with the decision taken by the Employer, the dispute shall be referred by either party to Arbitration

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within 30 days of the notification of the Employer’s decision.”

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The petitioner contends that the respondent

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issued the Work Order dated 20.03.2018 to the petitioner for providing E-Vidhana Soudha Centre at Room No. 19, Ground Floor, Vidhana Soudha and E-Vidhana Soudha Training Centre at Stage – 2, Legislators Home at a total cost of Rs.1,93,30,955/-. The work order is preceded by the Agreement dated 17.03.2018 [the Agreement] which stipulates inter alia that the General Conditions of Contract shall form and be read and construed as part of the Agreement. The petitioner in terms of the Work Order dated 20.03.2018 has also furnished bank guarantee for a sum of Rs.9,55,548/and incurred expenditure in mobilizing men and material for the execution of the contract. The second respondent, without notice to the petitioner and without any justification, has issued the termination order dated 27.10.2018 citing Government’s policy decision.

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The petitioner further contends that the

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termination of the contract/work order is in violation of the contractual terms and the petitioner is entitled for certain reliefs including damages. Therefore legal notice dated 17.11.2018 is issued invoking the arbitration clause as per Clause 24.1 and calling upon the respondents to concur with nomination for the appointment of the sole arbitrator. The second respondent has issued communication dated 25.03.2019 stating that the nomination of the sole arbitrator is contrary to the contractual terms and as such there cannot be any such arbitration.

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While the learned counsel for the petitioner argues in support of appointing a sole arbitrator reiterating the above assertions, the learned Additional Government Advocate submits that the respondents’ objection as regards the appointment of a sole arbitrator is because the petitioner, in terms of clause 24 of the Contract ought to have approached this Court within 30 days from the date of

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communication dated 25.03.2019, the date of the final decision as contemplated thereunder, and because the petitioner has not approached this Court within such 30 days, the dispute would be stale and therefore cannot be arbitrated.

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The issuance of work order preceded by the agreement is undisputed. The Agreement dated 17.03.2018 explicitly states that the General Conditions of Contract shall form and be read and construed as part of agreement, and the clause 24 of the conditions of the contract stipulates resolution of every dispute by arbitration. It is undisputed that the respondents citing the policy decision of the Government have terminated the work order. The respondents contest the appointment or constitution of arbitral Tribunal asserting that the dispute would be stale as the petitioner has not approached this Court within 30 days from the date of communication dated 25.03.2019. This would be one of those questions which can be considered by

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the sole arbitrator, but would not be a reason for refusal of the appointment of the sole arbitrator as prima facie there is dispute between the petitioner and the respondents which is agreed to be resolved by adjudication. Therefore, leaving all questions, including the question whether the dispute raised by the petitioner is stale, open for consideration by the sole arbitrator, the petition is allowed in terms of the following

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ORDER

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[a] The petition is allowed appointing Sri

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Venkatasudarshana, retired District Judge, No.103, "Kasthurbha', 2^nd floor, Laxmi Paradise Apartment, 11^th Cross, 5^th Main, Laxminarayanapura, Bengaluru - 560 021 as the sole arbitrator to enter reference of the dispute between the petitioner and the respondents and conduct proceeding at the Arbitration and Conciliation Centre (Domestic and International), Bengaluru according to the Rules governing the said Arbitration Centre.

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[b] The Office is directed to communicate this order to the Arbitration and Conciliation Centre and Sri Venkatasudarshana, retired District Judge, No.103,

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"Kasthurbha', 2^nd floor, Laxmi Paradise Apartment, 11^th

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Cross, 5^th Main, Laxminarayanapura, Bengaluru - 560 021 as required under the Appointment of Arbitrators by the Chief Justice of India Scheme, 1996.

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[c] All the rival contentions are left open for

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adjudication by arbitration.

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SD/JUDGE

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LRS.

M/S R. K. Infra (India) Pvt. Ltd. v. the Secretary

Case brief

What is this about?

What did the court decide?

M/S R. K. Infra (India) Pvt. Ltd. v. the Secretary

Case brief

What is this about?

What did the court decide?

What the court decided

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