SANTOSH ASSOCIATE PRIVATE LIMITED Vs. HARYANA STATE INDUSTRIAL AND INFRASTRUCTURE DEVELOPMENT CORPORATION LTD.

JUDGEMENT

(1.) Leave granted.

(2.) The present Appeal has been filed challenging the judgment dtd. 12/9/2025 passed by the Commercial Court, Gurugram whereby the appeal filed by the Appellant under Sec. 37(2) of the Arbitration & Conciliation Act, 1996 ( 'the Act ') was dismissed. The Commercial Court affirmed the order dtd. 1/8/2025 passed by the Sole Arbitrator, who had allowed the Respondent 's application under Sec. 16 of the Act and dismissed the Appellant 's claim in its entirety for non-compliance with the contractual stipulation requiring a prior security deposit of ten per cent (10%) of the claim amount.

(3.) The Respondent invited e-tenders on 7/11/2016 for the execution of storm water drainage systems and contingent works at Sector-35, Udyog Vihar, Phase-VII, Gurugram. The Appellant participated in the bidding process and was awarded the contract on 17/5/2017 for a total consideration of Rupees Five Crore Fourteen Lakh Eleven Thousand Six Hundred and Thirty-Five Only (?5,14,11,635/-). The contract contained an arbitration clause, Clause 25-A(vii), which mandated that a contractor, in the event of raising claims exceeding Rupees One Lakh (?1,00,000/-), must deposit ten per cent (10%) of the claim amount as security prior to reference to arbitration. Clause 25-A(vii) is reproduced hereinbelow: