Allowed

Tech-Sharp Engineers Pvt. Ltd. v. Bharat Petroleum Corporation Ltd.

Kerala HC26 Aug 2022AR/98/2022

Case brief

AI extract

What is this about?

This Order appoints a sole arbitrator in an arbitration request filed under Section 11 of the Arbitration Act, 1996. The Court held that the respondent's right to nominate was forfeited post-2015 amendment and allowed the application, leaving the appointment of a technical expert to the arbitrator's discretion.

What did the court decide?

Appointment of Mr. Justice K. Abraham Mathew as sole Arbitrator; Registry to communicate order and obtain Statement of Disclosure; application allowed.

Tech-Sharp Engineers Pvt. Ltd. Vs Bharat Petroleum Corporation Ltd. — Arbitration | Kerala HC (2022)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE MR.JUSTICE C.S.DIAS

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FRIDAY, THE 26TH DAY OF AUGUST 2022 / 4TH BHADRA, 1944

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AR NO. 98 OF 2022

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PETITIONER:

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TECH-SHARP ENGINEERS PVT. LTD.
AGED 47 YEARS
REGISTERED OFFICE AT
A/54, BANGALORE HIGH ROAD, PAPPANCHATIRAM,
KUTHAMBAKKAM VILLAGE, POONAMALEE TALUK,
CHEMBARABAKKAM PO, CHENNAI 600123

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PRESENTLY HAVING CORPORATE OFFICE AT
10/17, M BLOCK,8TH STREET,
ANNA NAGAR EAST, CHENNAI - 600102
REPRESENTED BY ITS PROJECT DIRECTOR,
DANNIE MATHEW
PIN – 600123

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BY ADVS.SANTHOSH MATHEW
ARUN THOMAS
KARTHIKA MARIA
ANIL SEBASTIAN PULICKEL
ABI BENNY AREECKAL
LEAH RACHEL NINAN
MATHEW NEVIN THOMAS
KURIAN ANTONY MATHEW

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ESPONDENT:

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BHARAT PETROLEUM CORPORATION LTD.
POST BAG NO. 2, AMBALAMUGAL,
ERNAKULAM, KERALA - 682302,
REPRESENTED BY ITS GENERAL MANAGER (PROJECTS) ,
PIN – 682302

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BY ADVS.GOPIKRISHNAN NAMBIAR M
K.JOHN MATHAI(J-212)
JOSON MANAVALAN(J-526)
KURYAN THOMAS(K/131/2003)
PAULOSE C. ABRAHAM(MAH/58/2006)

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A.R.No.98/2022

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RAJA KANNAN(K/356/2008)
POOJA MENON(K/971/2018)

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THIS ARBITRATION REQUEST HAVING COME UP FOR ADMISSION
ON 26.08.2022, THE COURT ON THE SAME DAY DELIVERED THE
FOLLOWING:

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A.R.No.98/2022

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Dated this the 26^th day of August,2022

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O R D E R

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The arbitration request is filed under Section 11 of the Arbitration and Conciliation Act, 1996(in short, ‘Act’), for the appointment of a sole arbitrator to adjudicate the disputes that have arisen between the applicant and the respondent.

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The applicant’s case, in a nutshell, relevant for the determination of the Arbitration Request(A.R.), is that; the applicant is a Company incorporated under the Indian Companies Act, 1956. The applicant was selected by the respondent through a tender process to carryout the ‘Mechanical Works for Offsites-IREP Area for Integrated Refinery Expansion Project (IREP) of the respondent. The applicant faced stumbling blocks due to the inaction and delay on the part of the respondent. The applicant issued Annexure-A6 to the

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A.R.No.98/2022

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respondent raising its tentative claim in respect of the loss. The final bill submitted by the applicant was returned by the respondent. The petitioner sent repeated communications to the respondent, reiterating its claims. The respondent issued Annexure-A8 to the applicant stating that the final bill could not be processed and no amount could be paid without the No-Claim Certificate. In said situation as a dispute arose between the parties, the applicant invoked the arbitration clause in Annexure A-1 by issuing Annexure-A10 letter. The respondent acknowledged Annexure A-10 and sent Annexure-A11 reply. In the light of the 2015 amendment to the Act, the respondent's right to nominate an Arbitrator stands forfeited. Thus, the A.R.

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The respondent has filed a counter affidavit, inter alia, denying the allegations in the A.R. The

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A.R.No.98/2022

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respondent has contended that the High Court of Judicature at Madras has restrained the respondent from making any payment to the applicant in a petition filed by the applicant’s sub-contractor. As long as the said order is in force, the respondent is interdicted to make any payment. Hence, the A.R. may be dismissed.

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Heard; Sri. Santhosh Mathew, the learned counsel for the applicant and Smt. Pooja Menon, the learned counsel appearing for the respondent.

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Sri. Santhosh Mathew, submitted that the order passed by the Hon’ble High Court of Madras has nothing to do with this Court deciding the A.R. The order becomes relevant, only if an award is passed and it is put to execution. Therefore, the A.R. may be allowed.

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Smt. Pooja Menon contended that if the dispute between the parties has to be effectively

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A.R.No.98/2022

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adjudicated, the A.R. will be decided by an Arbitrator, who has technical expertise, if not the Arbitrator has to be 8assisted by a technical expert. The SCOPE(Standing Conference of Public Enterprises) of the respondent prescribes that a technical expert should also be appointed. Therefore, if this Court is not appointing an Arbitrator with technical knowledge, then the learned Arbitrator may be directed to consider the request of the respondent to appoint a technical expert at the appropriate stage.

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Undisputedly, Clause 91 of Annexure-A1 provides that in the case of any dispute or difference between the parties, the same has to be resolved through arbitration. Even though the respondent was empowered to nominate an Arbitrator, in view of the amendment to the Act and the law laid down by the Hon’ble Supreme Court in TRF Limited v. Energo

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A.R.No.98/2022

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Engineering Projects Ltd. [(2017) 8 SCC 377] and the subsequent decisions, the right of the appointing authority named in Annexure -I stands forfeited. The applicant has made a request to nominate an Arbitrator, but the parties have not arrived at a consensus. Therefore, I am of the view that the applicant has validly invoked the arbitration clause and has a right to get an Arbitrator appointed in the case.

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In the above factual and legal matrix, I am inclined to allow the A.R. in the following manner:

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(i) Mr Justice K. Abraham Mathew is appointed as the sole Arbitrator, to arbitrate upon the disputes that have arisen between the applicant and the respondent arising out of Annexure-A1.

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(ii) The learned Arbitrator is at liberty to rule on his own jurisdiction, if the parties raise such a dispute.

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A.R.No.98/2022

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(iii) The Registry is directed to communicate a copy of this order to the learned Arbitrator within a period of ten days from today and to obtain a Statement of Disclosure from the learned Arbitrator as provided under Section 11(8) read with Section12(1) of the Act.

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(iv) Once the Disclosure Statement is obtained from the learned Arbitrator, the Registry shall issue the certified copy of this order to the learned Arbitrator, with a copy of the said statement appended to it, retaining the original of the same by this Court.

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(v) The fees of the learned Arbitrator shall be governed by the Fourth Schedule of the Act.

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(vi) The learned Arbitrator shall decide the manner in which the fees and expenses of the arbitration proceeding has to be paid by the parties.

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(vii) The parties will appear before the learned Arbitrator on such date and place as decided by the learned Arbitrator.

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A.R.No.98/2022

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(viii) As the seat of Arbitration is at Ernakulam, Kerala as per Annexure-A1, the seat and venue will be at Ernakulam, as per the convenience of the Arbitrator.

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(ix) All contentions of the parties are left open to be raised before the learned Arbitrator, including the respondent’s request for nominating/seeking the assistance of a technical expert, which is left to the complete discretion of the learned Arbitrator.

Sd/-

C.S.DIAS,JUDGE

DST/26.08.22

//True copy/

P.A.To Judge

A.R.No.98/2022

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APPENDIX

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PETITIONER ANNEXURES
ANNEXURE1TRUE COPY OF THE RELEVANT EXTRACTS OF
THE BIDDING DOCUMENT DATED 13.01.2014.

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ANNEXURE2TRUECOPYOFTHEFOANO:
10/J22/998/FOA-358E/AJ/13 (FOA) DATED
25.03.2014 AWARDING THE WORK TO THE
PETITIONER.
ANNEXURE3TRUE COPY OF THE PURCHASE ORDER
(WITHOUT APPENDIXES) DATED 25.03.2014
ISSUED BY THE RESPONDENT TO THE
PETITIONER.
ANNEXURE4TRUE COPY OF THE REVISED PURCHASE ORDER
DATED 25.08.2017 ISSUED BY THE
RESPONDENT TO THE PETITIONER.
ANNEXURE5TRUE COPY OF THE LETTER DATED
09.12.2015 ISSUED BY THE PETITIONER TO
THE RESPONDENT.
ANNEXURE6TRUE COPY OF THE LETTER DATED
12.12.2017 (WITHOUT ANNEXURES) ISSUED
BY THE PETITIONER TO THE RESPONDENT.
ANNEXURE7TRUE COPY OF THE LETTER DATED
05.08.2019 ISSUED BY THE PETITIONER TO
THE RESPONDENT.
ANNEXURE8TRUE COPY OF THE LETTER DATED
13.06.2020 ISSUED BY THE PETITIONER TO
THE RESPONDENT.
ANNEXURE9TRUE COPY OF THE LETTER DATED
08.04.2021 ISSUED BY THE PETITIONER TO
THE RESPONDENT.
ANNEXURE10TRUE COPY OF THE LETTER DATED
16.09.2021 ISSUED BY THE PETITIONER TO

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A.R.No.98/2022

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THE RESPONDENT.

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ANNEXURE11TRUE COPY OF THE EMAIL DATED 12.10.2021
ISSUED BY THE RESPONDENT TO THE
PETITIONER.

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RESPONDENT ANNEXURES:

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ANNEXURE AORDER DATED 25.01.2022 PASSED BY THE
HONBLE MADRAS HIGH COURT

Tech-Sharp Engineers Pvt. Ltd. v. Bharat Petroleum Corporation Ltd.

Case brief

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Tech-Sharp Engineers Pvt. Ltd. v. Bharat Petroleum Corporation Ltd.

Case brief

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