Dismissed

M/S Sreedevi Infra Constructions Private Limited v. M/S Hindustan Steelworks Construction Limited

Karnataka HC29 Mar 2021CMP/69/2020

Case brief

AI extract

What is this about?

The High Court of Karnataka disposed of four civil miscellaneous petitions filed under Section 11(6) of the Arbitration and Conciliation Act, 1996, seeking appointment of an arbitrator. The court rejected the petitions, holding that the arbitration clause in the CPWD Works Manual was not clearly incorporated into the letters of intent by reference to CPWD standards.

What did the court decide?

Petitions for appointment of an arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996 were dismissed.

M/S Sreedevi Infra Constructions Private Limited Vs M/S… — Arbitration | Karnataka HC (2021)

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 29^TH DAY OF MARCH 2021

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BEFORE

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THE HON'BLE MR.JUSTICE S. SUNIL DUTT YADAV

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CIVIL MISCELLANEOUS PETITION NO.71/2020 c/w CIVIL MISCELLANEOUS PETITION NOs. 69/2020, 70/2020 AND 72/2020

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In CMP No.71/2020:

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BETWEEN:

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M/s. Sreedevi Infra Constructions Private Limited, Having office at No.2345, Ground Floor, 12^th Cross, E Block, Sahakarnagar, Bengaluru – 560 092 Represented by its Managing Director, Smt. Sreedevi B.T., W/o Ravi Shankar T.S., Aged about 44 years. ... Petitioner (By Sri. Sridhar V.C., Advocate)

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AND:

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M/s. Hindustan Steelworks Construction Limited (A Government of India Undertaking) No.1297, 3^rd Floor, 5^th Cross, 13^th Main, Judicial Layout, Yelahanka, Bengaluru North,

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Bengaluru – 560 064. Represented by its General Manager.

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…Respondent (By Sri. Chethan B., Advocate)

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This Civil Miscellaneous Petition is filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 praying to appoint a suitable, independent and impartial sole arbitrator to adjudicate the dispute between the parties arising out of the contract with letter of intent HSCL/BNG/AGM/KV/Jalahalli-2/LOI/137 dated 10.02.2010, under Section 11(6) of the Arbitration and Conciliation Act, 1996 as per Annexure-C and etc.,

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In CMP No.69/2020:

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BETWEEN:

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... Petitioner (By Sri. Sridhar V.C., Advocate)

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AND:

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M/s. Hindustan Steelworks Construction Limited (A Government of India Undertaking) No.1297, 3^rd Floor, 5^th Cross,

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13^th Main, Judicial Layout, Yelahanka, Bengaluru North, Bengaluru – 560 064. Represented by its General Manager.

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…Respondent (By Sri. Chethan B., Advocate)

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This Civil Miscellaneous Petition is filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 praying to appoint a suitable, independent and impartial sole arbitrator to adjudicate the dispute between the parties arising out of the contract with letter of intent HSCL/BNG/NVS/JNV/Kolar/Dor/LoI/09/135 dated 14.12.2009 under Section 11(6) of the Arbitration and Conciliation Act, 1996 as per Annexure-C and etc.,

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In CMP No.70/2020:

BETWEEN:

AND:

M/s. Hindustan Steelworks Construction

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Limited (A Government of India Undertaking) No.1297, 3^rd Floor, 5^th Cross, 13^th Main, Judicial Layout, Yelahanka, Bengaluru North, Bengaluru – 560 064. Represented by its General Manager.

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…Respondent (By Sri. Chethan B., Advocate)

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This Civil Miscellaneous Petition is filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 praying to appoint a suitable, independent and impartial sole arbitrator to adjudicate the dispute between the parties arising out of the contract with letter of intent HSCL/BNG/AGM/KV/ASC-Centre/LOI/131 dated 15.07.2009, under Section 11(6) of the Arbitration and Conciliation Act, 1996 as per Annexure-C and etc.,

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In CMP No.72/2020:

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BETWEEN:

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... Petitioner (By Sri. Sridhar V.C., Advocate)

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AND:

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M/s. Hindustan Steelworks Construction Limited (A Government of India Undertaking) No.1297, 3^rd Floor, 5^th Cross, 13^th Main, Judicial Layout, Yelahanka, Bengaluru North, Bengaluru – 560 064. Represented by its General Manager.

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…Respondent (By Sri. Chethan B., Advocate)

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This Civil Miscellaneous Petition is filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 praying to appoint a suitable, independent and impartial sole arbitrator to adjudicate the dispute between the parties arising out of the contract with letter of intent HSCL/BNG/NVS/JNV/MYSORE/DOR/LOI/09/133 dated 20.11.2009, under Section 11(6) of the Arbitration and Conciliation Act, 1996 as per Annexure-C and etc.,

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These Civil Miscellaneous Petitions coming on for Admission, this day, the Court made the following:

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ORDER

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CMP Nos. 71/2020, 69/2020, 70/2020 and 72/2020 all are by the petitioner against the same respondents and relate to disputes arising out of the letter of intent. As common contentions have been advanced on an identical factual matrix and the legal

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issue that arises is common, these matters are taken up together and disposed off by the common order.

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2. The petitioner has been entrusted work by

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the respondent as per the letter of intent

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CMP No.	Letter of Intent dated	Annexure
71/2020	10.02.2010	Annexure-C
69/2020	14.12.2009	Annexure-C
70/2020	15.07.2009	Annexure-C
72/2020	20.11.2009	Annexure-C

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3. The petitioner in all these petitions has

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sought for appointment of an arbitrator to adjudicate the dispute between the parties arising out of the understanding as reflected in the letter of intent, copy

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of which is enclosed at Annexure-C to these petitions.

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The petitioner submits that work had been

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entrusted by the respondent-Company which has been

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carried out, completion certificate has also been issued and payments are due from the respondent.

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The petitioner has relied upon Central Public Works Manual (CPWD) and submits that letter of intent provides that work entrusted by the respondent to the petitioner shall be carried out as per CPWD specifications and as per the applicable ISI/BSI Standards and accordingly, the arbitration clause in the CPWD Works Manual as would be applicable with respect to CPWD works found at Section 35 of the CPWD Works Manual which are conditions of contract with respect to CPWD works is to be construed to be part and parcel of the letter of intent dated 10.02.2010. Accordingly, it is contended that despite absence of any arbitration clause, in the letter of intent, in light of the works to be carried out as per the specification of CPWD, arbitration clause referred

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to above requires to be construed to be have been incorporated in the letter of intent.

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Learned counsel for the respondent upon notice has contended that the understanding between the parties is as contained in the letter of intent, copy of which is enclosed at Annexure-C.

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The respondent has also specifically contended at paragraph 3 of the statement of objections that the payment to be made to the petitioner is only after the respondent receives payment from the clients and accordingly, the present proceedings are premature as the respondent has not received payments from its clients.

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Learned counsel for the respondent also relies on the judgment in M.R. Engineers & Contractors Pvt. Ltd. v/s Som Datt Builders Ltd. and submits that the requirement under Section 7(5)

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of the Arbitration and Conciliation Act, 1996 would be satisfied only if the condition as stipulated by the Apex Court in M.R.Engineers is satisfied. Accordingly, it is contended that mere reference to any other document containing the arbitration clause may not be sufficient but there must be a specific intention of incorporation of the arbitration clause that is found in an agreement which is referred to in the other agreement between

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the parties. Thus it is submitted that the proceedings are premature.

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9. Heard both sides.

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Clearly the letter of intent no doubt

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provides that work is to be executed in terms of the CPWD Standards, there is no dispute about the same. However, there is no clause for arbitration in the letter of intent and Clause-10 provides that all other conditions would be as per the Special Conditions of Contract. Special Conditions of Contract annexed

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along with statement of objections do not contain any clause for arbitration. Accordingly, the petition is misconceived and it cannot be stated that the arbitration clause contained in the CPWD Manual, copy of which is produced at Annexure-D is to be constituted as being incorporated in the letter of intent. The reference to CPWD Standards would not in any way make the further conditions in the CPWD Works Manual applicable in the present case as regards to the resolution of dispute between the petitioner and the respondent. Further the letter of intent does not reflect any clear intention of the parties to incorporate the arbitration clause found under the CPWD Works Manual to the present proceedings between the parties.

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Taking note of the judgment of the Hon’ble Apex Court in the case of M.R.Engineers in the absence of clear intention that the parties have sought

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for incorporation of the arbitration clause found in any agreement in to the agreement between the parties it cannot be stated that there could be an incorporation of the arbitration clause found in CPWD Works Manual in to the letter of intent.

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Further the submission made in paragraph 3 of the statements of objections also needs to be taken note of. However, since petition is being rejected it is not appropriate to enter upon adjudication of the merits of the matter. Accordingly, the petition is dismissed.

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All contentions are kept open.

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Sd/JUDGE

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M/S Sreedevi Infra Constructions Private Limited v. M/S Hindustan Steelworks Construction Limited

Case brief

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M/S Sreedevi Infra Constructions Private Limited v. M/S Hindustan Steelworks Construction Limited

Case brief

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