PRASAD & COMPANY Vs. BHARAT HEAVY ELECTRICALS LIMITED

JUDGEMENT

(1.) THIS petition is filed seeking appointment of an Arbitrator to adjudicate the dispute that has arisen between the petitioner and the respondent.

(2.) PETITIONER is a construction company. Respondent Bharat Heavy Electricals Limited issued a notice inviting tenders for carrying out certain civil works. Petitioner participated in the tender and emerged as a successful bidder. Letters of intent were issued by the respondent in favour of the petitioner in respect of part A and B works covered in the notification. Work orders were also issued. Petitioner has produced General Conditions of Contract at Annexure -G. In Clause 58 of the General Conditions of Contract, it is provided that all questions of disputes relating to any matter connected with the contract, designs, drawing, specifications etc. concerning the work or the execution or failure to execute the work, whether arising during the progress of the work or after the completion or abandonment thereof, shall be referred to the sole arbitration of the managing director / chief engineer of BHEL and if the managing director/chief engineer is unable or unwilling to act, to the sole arbitration of some other person appointed by the managing director/general manager/chief engineer willing to act as such arbitrator. Indeed, there is no dispute regarding the existence of the arbitration clause in the contract entered into between the parties.

(3.) A dispute has arisen between the parties regarding the increase in volume and quantity of work and difference in cost factor. Petitioner has written a letter addressed to the respondent bringing to its notice the cost analysis and the reference in the cost on the basis of plinth area rates approved by the central public works department. When the department did not take any action for amicably resolving the issue by enhancing the contract value and extending the time for performance of obligations of the contract petitioner sought for appointment of arbitrator to resolve the dispute by writing a letter dated 28.09.2011 invoking the arbitration clause. Copy of this letter is produced at Annexure -D.