M/S Kmv Projects Ltd., Vs the Bangalore Developement Authority (Bda)

M/S KMV PROJECTS LTD., NO. 9-3-948/949 LEVEL-4 SOLITAIRE PLAZA BESIDE IMAGE HOSPITAL AMEERPET HYDERABAD-500073 REPRESENTED BY ITS VICE PRESIDENT SRI. TARANATH

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…PETITIONER

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Digitally signed by SUNITHA K S Location: HIGH COURT OF KARNATAKA

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(BY SRI. RAGHAVENDRA S V, ADVOCATE FOR SRI. ZULFIKIR KUMAR SHAFI., ADVOCATE)

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AND:

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THE BANGALORE DEVELOPEMENT AUTHORITY (BDA) REPRESENTED BY ITS COMMISSIONER, T. CHOWDAIAH ROAD KUMARA PARK (WEST) BENGALURU - 560 020.

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THE EXECUTIVE ENGINEER MARKET DIVISION BANGALORE DEVELOPMENT AUTHORITY T.CHOWDAIAH ROAD

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HC-KAR

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KUMARA PARK (WEST) BENGALURU - 560 020.

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THE EXECUTIVE ENGINEER MARKET SUB-DIVISION INFRASTRUCTURE DIVISION-4 (MARKETS) BANGALORE DEVELOPMENT AUTHORITY T.CHOWDAIAH ROAD KUMARA PARK (WEST) BENGALURU - 560 020.

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…RESPONDENTS

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(BY SRI. SHASHANK PATEL, ADVOCATE FOR SRI. AJAY KUMAR M., ADVOCATE)

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THIS CMP IS FILED UNDER SECTION 11(6) OF ARBITRATION AND CONCILIATION ACT, 1996, PRAYING TO APPOINT JUSTICE K.N.KESHAVA NARAYANA, FORMER JUDGE, HIGH COURT OF KARNATAKA OR ANY OTHER RETIRED HIGH COURT JUDGE, AS A SOLE ARBITRATOR TO ADJUDICATE THE DISPUTE ARISING OUT OF THE AGREEMENT DATED 23.03.2018 IN THE ABOVE MATTER IN PURSUANCE OF CLAUSE NO.24 OF GENERAL CONDITIONS OF CONTRACT AND R/W CLAUSE NO.4 OF SPECIAL CONDITIONS OF CONTRACT AND TO PASS SUCH OTHER SUITABLE ORDERS AS NECESSARY UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN THE INTEREST OF JUSTICE AND EQUITY.

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THIS PETITION, COMING ON FOR ADMISSION, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

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CORAM: HON'BLE MR. JUSTICE ASHOK S.KINAGI

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HC-KAR

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ORAL ORDER

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The petitioner filed this petition under Section 11(6) of the Arbitration and Conciliation Act, 1996 (for short ‘the Act of 1996’), to appoint a Sole Arbitrator to resolve the dispute between the parties to the petition in terms of arbitration clause contained in the agreement at Annexure-A dated 23.03.2018 inclusive of the General conditions of contract (Clause No.24) and the Special conditions of the contract (Clause No.4) as per the provisions of the Act and the Rules.

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Brief facts, leading rise to the filing of this petition are as follows:

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The petitioner is a reputed company and Class-I Contractor, engaged in the business of construction throughout India. The respondents invited bids for “Construction of Multi Purpose Commercial Complex at Santhe Maidan, K.R. Puram, Bangalore”. The petitioner became the successful bidder and further,

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HC-KAR

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the petitioner and respondent No.2 entered into the contract agreement dated 23.03.2018 for execution of the subject work. Further, the respondents failed to handover the encumbrance free site to the petitioner. In the meanwhile, the respondents directed to demolish the old existing building and sheds at the site. The petitioner was unable to demolish, and clear the entire site due to protests from the occupants. The petitioner submitted the running bills for the execution of certain works, which are executed as per the directions of the respondents. The respondents did not give any heed to the request made by the petitioner in resolving the issues. It resulted in loss, and damages to the petitioner. The petitioner issued a legal notice dated 10.12.2024 invoking the arbitration clause. Although the respondents received the legal notice, they did not concur in appointing the arbitrator. Hence, this petition.

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HC-KAR

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Heard the arguments of the learned counsel for the petitioner, and the learned counsel for the respondents.

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Learned counsel for the petitioner submits that, pursuant to the agreement at Annexure-A having been entered into by the parties to the petition, the arbitral dispute arose, and the petitioner has invoked the arbitration clause by issuing an arbitration notice under section 21 of the Act. The agreement contains the arbitration clause and the dispute has to be resolved through arbitration. Hence, on these grounds, prays to allow the petition.

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Per contra, the learned counsel for the respondents submits that the dispute which arose between the parties to the petition is not arbitral in nature. Hence, the question of referring the dispute to the arbitrator do not arise. Accordingly, prays to dismiss the petition.

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HC-KAR

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Perused the records, and considered the submissions

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of the learned counsel for the parties.

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The point that would arise for the consideration is as follows:

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“Whether the petitioner has made out a ground to refer the dispute to the arbitrator in terms of arbitration clause contained in the agreement at Annexure-A dated 23.03.2018, inclusive of General Conditions of Contract at Clause 24 and Special Conditions of Contract at Clause 4, as per the provisions of Arbitration and Conciliation Act, 1996?”

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It is undisputed fact that, the respondents floated a tender for construction of Multipurpose Commercial Complex at Santhe Maidana, K.R.Puram, Bangalore and the petitioner was the highest bidder. Further, the petitioner and respondent No.2 entered into the contract agreement dated 23.03.2018. The respondents committed a breach of terms and

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HC-KAR

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conditions of the contract agreement. The petitioner invoked an arbitration clause No.24 of the General Conditions of Contract and clause No.4 of the Special Conditions of Contract by issuing an arbitration notice dated 10.12.2024:

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I have perused the arbitration clauses, which reads as follows:

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“24. Procedure for resolution of

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Disputes:

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24.1 If the contractor is not satisfied with the decision taken by the Employee, the dispute shall be referred by either party to Arbitration within 30 days of the notification of the Employer’s decision.

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24.2 If neither party refers the dispute to Arbitration within the above 30 days, the Employer’s decision will be final and binding.

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24.3 The Arbitration shall be conducted in accordance with the

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arbitration procedure stated in the Special Conditions of Contract.”

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“4. Arbitration (Clause 24)

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4.1 The procedure for arbitration shall be as follows:

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(a) In case of dispute or difference arising between the Employer and the contractor relating to any matter arising out of or connected with this agreement it shall be settled in accordance with the Arbitration and Conciliation Act, 1996. The disputes or differences shall be referred to a Sole Arbitrator. The Sole Arbitrator shall be appointed by agreement between the parties; failing such agreement, by the Appointing Authority (any one of the Organizations as per list enclosed in Annexure)

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(b) Arbitration proceedings shall be held Arbitral Tribunal...............³¹ Karnataka, India

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HC-KAR

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(c) The cost and expenses of arbitration proceedings will be paid as determined by the Arbitrator. However the expenses incurred by each party in connection with the preparation, presentation, etc., shall be borne by each party itself.

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(d) Performance under the contract shall continue during the arbitration proceedings and payments due the Contractor by the Employer shall not be withheld, unless they are the subject matter of the arbitration proceedings.”

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From the perusal of the arbitration clause, it is clear that, in case of any difference between the employer and the contractor, the same has to be resolved by the arbitrator, through arbitration. Admittedly, there is an arbitration clause, and the dispute arose between the parties to the petition which is arbitral in nature and the petitioner has invoked the arbitration clause by issuing an arbitration notice dated 10.12.2024. In view of the above discussion, the

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HC-KAR

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petitioner has made out a ground to refer the dispute to the arbitration. Accordingly, I answer the point in the affirmative.

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Accordingly, I proceed to pass the following:

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ORDER

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i. The Civil Miscellaneous Petition is allowed .

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ii. Shri Justice Anand Byra Reddy, learned Former Judge, High Court of Karnataka is nominated as an arbitrator to resolve the dispute between the petitioner and respondent in terms of the arbitration clause contained in Annexure-A as per the provisions of Arbitration and Conciliation Act, 1996 and the Rules.

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iii. The Registry is directed to forward a copy of this order to the learned Arbitrator and the Arbitrator, the Director and the

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