GBK Project Pvt. Ltd.Vs. Union of India - (High Court of Delhi) (22 Nov 2021)

Arbitrator either has to be appointed with the consensus of the parties or by present Court

MANU/DE/3145/2021

Arbitration

By way of present petition, Petitioner is seeking appointment of an independent Arbitrator under the provisions of Section 11 of the Arbitration and Conciliation Act, 1996 read with Section 151 CPC. Petitioner-company claims to be involved in the business of construction and Railway contracts, who vide acceptance letter dated 26th September, 2016 of Respondent was awarded work pertaining to "Balance work of quarters at Asoati Faridabad, construction of station building, power cabin, RRI and other station building, extension of platforms, retaining wall, development of circulating area, drainage arrangements in yards and other allied works at different location in between AST and Jn cabin TKD for Rs. 12,64,61,022.97. The work was to be completed within stipulated period of 15 months i.e. 25th December, 2017.

According to Petitioner, Petitioner had made all necessary arrangements, however, work could not be completed by the stipulated time i.e. 25th December, 2017 due to several failures on the part of the Respondent and so, the period for completion of work was last extended upto 1st December, 2019. However, during execution of the work, various claims, clarifications and disputes arose between the parties, which were brought to the notice of concerned department of respondent, but instead of finding out any solution and acting oblivious to the genuine difficulties faced by the Petitioner, Respondent issued several notices to the Petitioner with a view to escape/wriggle out from its contractual obligations and vide notice dated 23rd September, 2019 the respondent terminated the contract.

It is averred by the Petitioner that, Respondent was under the obligation to serve 48 hours notice upon the Petitioner before terminating the contract as mandated and so, Petitioner vide its letter dated 23rd July, 2021, invoked the arbitration clause as contained under clause 64 of the General Conditions of the Contract. The Petitioner has submitted that petitioner claims amount to Rs. 4,76,34,485 against the Respondent and therefore, the present petition be allowed.

Pertinently, invocation of arbitration vide letter dated 23rd July, 2021 by the Petitioner is not disputed. Though the present petition has been opposed by learned counsel for Respondent, however, it is not disputed that any dispute INTER SE parties has to be resolved through arbitration in terms as contained under clause 64 of the General Conditions of the Contract.

However, contention of learned counsel for Respondent that appointment of Arbitrator has to be made in terms of Clause-64(3) of the General Conditions of Contract, is rejected in view of Supreme Court's decision in Perkins Eastman Architects DPC & Anr. vs. HSCC (India) Ltd. , wherein it has been categorically stated that, no single party can be permitted to unilaterally appoint the Arbitrator, as it would defeat the purpose of unbiased adjudication of dispute between the parties. The aforesaid decision in Perkins Eastman Architects DPC & Anr. vs. HSCC (India) Ltd. has been followed by a Co-ordinate Bench of this Court in Proddatur Cable TV Digi Services Vs. Citi Cable Network Limited. Thus, the Arbitrator either has to be appointed with the consensus of the parties or by this Court. Petition allowed.

Tags : ARBITRATOR APPOINTMENT