Allowed

M/s. Chandrashekar and Co., v. Engineering Projects India Limited

Telangana HC7 Dec 2020ARBAPPL/33/2018

Case brief

AI extract

What is this about?

The High Court allowed an application under Section 11(6) of the Arbitration and Conciliation Act, 1996 to appoint a sole arbitrator. The Court held that the existence of the arbitration clause was clear and undisputed, and preliminary issues like reconciliation were outside the scope of Section 11 after the 2015 Amendment.

What did the court decide?

Arbitration Application allowed; Hon'ble Justice S. Ananda Reddy nominated as sole arbitrator; miscellaneous applications dismissed.

M/s. Chandrashekar and Co., Vs Engineering Projects India… — Arbitration | Telangana HC (2020)

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IN THE HIGH COURT FOR THE STATE OF TELANGANA

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AT HYDERABAD

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MONDAY, THE SEVENTH DAY OF DECEMBER TWO THOUSAND AND TWENTY

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PRESENT

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THE HONOURABLE SRI JUSTICE A, RAJASHEKER REDDY

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ARBITRATION APPLICATION NO: 33 OF 2018

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Between:

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It//s. Chandrashekar and Company, Contractors, represented by Proprietor It/r. C. Chandra Shekar, D.No. 13-1-17211 , Flat No.1, 3rd Floor, Near Sai Baba Temple Sneha Puri Colony, lVloti Nagar, Hyderabad- 500018

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...Applicant

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AND

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Engineering Projects lndia Limited, represented by its Chairman and Managing Director Core-lll Scope Complex 7, lnstitutional Area, Lodhi Road, New Delhi - 1 10003

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...Respondent

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Arbitration Application under Section 11 (6) of the Arbitration and Conciliation Act, 1996, praying that in the circumstances stated in the affidavit filed therewith the High Court may be pleased to appoint Sole Arbitrator for the purpose of adjudication of the disputes that have arisen between the Applicant and the respondents in respect of the Claims raised under the Applicants Arbitration Notice dated 07.'1 2 .2017 (Annexure-C) in terms of Agreement Clause 41-0.

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Counsel for the Applicant: SRI S. V. S. CHOWDARY

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Counsel for the Respondent: SRI K. SRINIVASA RAO

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The Court made the following: ORDER

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HON'BLE SRI JUSTICE A.RAJASHEKER REDDY

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Arbitration Application No.33 OF 2018

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ORDER:

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This Arbitration Application is liled under Section 1 1 (6) of the Arbitration arrd Conciliation Act, 1996 for appointment of sole arbitrator to adjudicate the claims and disputes betu,een the parties arising out of Applicant's Arbitration Notice dated 07.12.20t7

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The respondent was au'arded the contract n'ork of 'Construction of Nandakam Gr-rest Flouse at Ananthapalli Gunta at Tirumala' bv Tirumala^'lirupatr Dcvasthanam (TTD) and the responctent sub-contracted the said rvorl< to the Applicant vide Agreement No.DLI/CON l5B3 1322, clated 19.05.2008. Thereafter the Applicant executed th<: sr-rbject u'ork but the respondent has not paid the amounts to the applicant. As such, the applicant issued Demand Notice dated 05.08.2017. Though the same was received by the respondent, no reply was given. As such, the applicant issued notice dated 07 .12.2017 invoking arbitration clause in the work order. Even though the same is served on the respondent on 72.12.2017, the respondent failed to respond, as such. present application is filc'd .

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Heard learned coun sel lor applicant s,ho submits that since the respondent has not clispr-rted the existence of arbitration clause either bv replf ing to the demand notice or to the arbitration notice, the arbitration application needs to be allori ed as the serme is inr okccl. lle also sr.rbmits that the reconcihation as contendcd bv lhc rcspondenl pertarns to rate ol

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account bil1s not rn respect^{of the amount demandedvide} demand notice dated 05.08.2O17. As such,^the dispute^{arose as} the respondent failed to pay the amounts.

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On the other hand Sri M.S.K.Srinivasa Rao, learned counsel appearing for respondent submits that there^r.r,as reconciliation between the parties and out of reconciliation, the petitioner agreed to receive the amount of Rs.20 lakhs and the same is paid, as such, no dispute cxists; and that $,hen there is r-ro dispute, queslion of appointmcnt of arbitr:rtor does not artse

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Learned Counsel for thc petrti()ner further submits that after Amendment Act, 201 5, u hereby Section 1 1 (6-4) is brought in, the scope of enquin'under Section 11 of the Act is limited to examination of existence of arbitration clause and rts invocation by the party aggrieved. In support of the same, he also placed reliance on The Apex Court it MAYAVATI TRADING (P) LTD, a, PRADYUAT DEB BURMAM u,hercin it is held that the position of law that prevails a-fter the insertion of Section 1 1(6-4) is that Supreme Court or, as the case may be, the High Court, while considering any application under Sections 1 1(4) to 1 1(6) is to confine itself to examination of existence of arbitratior-r agreement, nothing more, nothing less, and leave all other preliminary issues to be decided bv arbitrator.

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In the prcsenl casc tl-rcrc is no drsltute regardir-rg issuance of Work Order dated 19.05.2008 bv the respondent ro the applicant and Clause-3 of the said Work Order contains arbitration Clause u'hich reads as follolr,s;

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(20 l9)8 SCC 7 r4

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"3. Arbitration Clause: Both EPI and the party shall make efforts to settle the disputes between them, if any amicably. Only if amicable settlement is not possible, the same shall be referred to the sole arbitration of the Chairman and Managing director of EPI or the person appointed by the CMD, EPI and the decision of the arbitrator sha.ll be Iinal and binding on both EPI and the party. Arbitration will be according to EPI's clause for Conciliation & Arbitration, which is enclosed."

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Though the applicant issued Demand Notice dated 05.08.2017 to the respondent, there is no reply from the respondent. So also, there is no replv to the arbitration notice dated 07.12.2017 issued bv the applicant served on the respondent on 12.12.2017, u'hich goes to sho\' that existence of arbitration ciause and invocatron of the same is not in dispute. Further, there is no dispute with regard to whether there is reconciliation in respect of the demands made by the applicant. Even, the socailed discharge pleaded b1' the respondent cannot be gone into the present application after the Amendment Act, 2015. When there is demand from the Applicant and the same is not paid by the respondent, it cannot be said that there is no dispute.

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In vieu, of the aforesaid facts and circumstances, since the existence of arbitration agreement is not in dispute, and in vier,r, of the aforesaid Judgment rendered by the Hon'ble Apex Court, the arbitration application deserves to be a1lou.ed, leaving all other issues open, to be decided bl arbitrators.

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Accordingly', this Arbitration Application is allou'ed nominating Hon'ble Sri Justice S.Ananda Reddl , former Judge of this Court, as an arbitrator for adjudicating the disputes between the parties. However, it is open for both the parties to raise all the claims and objections which are raised in this

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application as \.ell as other objections which are available to them under lau', before the arbitrator.

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There shall be no order as to costs. As a sequel thereto,

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miscellaneous applications, if any, pending in this Arbitration

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Application, shall stand dismissed.

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Sd/-M.SANTHI VARDHANI JOINT REGISTRAR

//TRUE COPY//

SECTION OFFICER

To,

Sri Justice S. Ananda Reddy, Flat No.C-402, Fortune Enclave, SBI Lane, Road No. 12, Banjara Hills, Hyderabad-3a.(By Special lt4essenger) (Along with a copy of petrtion, affidavit and material papers enclosed)

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One CC to Sri S, V. S. Chowdary, Advocate [OPUC]

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One CC to Sri K. Srinivasa Rao, Advocate tOPUCI

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Two CD Copies

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M|/K

HIGH COURT

ARRJ

DATED:0711212020

ORDER

ARBAPPL.No.33 of 2018

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ALLOWING THE ARBITRATION APPLICATION

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M/s. Chandrashekar and Co., v. Engineering Projects India Limited

Case brief

What is this about?

What did the court decide?

M/s. Chandrashekar and Co., v. Engineering Projects India Limited

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

Cases cited

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