RAIL VIKAS NIGAM LTD. Vs. SIMPLEX INFRASTRUCTURES LTD

JUDGEMENT

(1.) The present petition preferred under Section 14 of the Arbitration and Conciliation Act , 1996 (hereinafter referred to as 'the Act') seeks termination of the mandate of the 3-member Arbitral Tribunal constituted to adjudicate the disputes between the parties, on the ground that the Tribunal has willfully disregarded the ceiling provided in Schedule IV of the Act while fixing its fee.

(2.) The petitioner Rail Vikas Nigam Limited is a public sector undertaking engaged in the business of railway construction projects for the Indian Railways. On 27.09.2010, the petitioner issued an Invitation to Bid for construction of Viaduct and related works for 4.748 km length in Joka-BBD Bag Corridor of Kolkata Metro Railway Line, excluding the station areas from Ch.1250 to Ch.4128.00 between Joka to Behala Chowrasta including Depot Approach at Joka. In response thereto, the respondent submitted its bid which was accepted by the petitioner by way of the letter dated 28.12.2010. Shortly thereafter, on 28.01.2011, the parties executed a formal contract to carry out the work, however the date of commencement was taken as the date on which the Letter of Acceptance was issued, i.e., 28.12.2010.

(3.) Initially, as per the terms of the contract, the project was earmarked for completion on 27.06.2013, but for various reasons the original schedule could not be adhered to and the project completion date kept being extended. Finally, on 20.11.2017, the respondent completed the construction work as outlined in the Scope of Work in the contract dated 28.01.2011. However, since the respondent claimed that the petitioner's failure to discharge its obligations under the contract in a timely manner delayed the contract from a 30-month long to an 84-month long project, it sought cost escalation from the petitioner. Since repeated claims in this regard went unanswered, the respondent invoked arbitration under Clause 17.3 of the General Conditions of Contract (GCC) but the petitioner failed to appoint its nominee arbitrator. Resultantly, the respondent approached this Court by way of Arb. Pet. 519/2018 which was allowed on 11.12.2018. This Court appointed Hon'ble Mr. Justice Swatanter Kumar (Retd.) as the nominee arbitrator on behalf of the petitioner herein with a specific direction that the fee of the learned arbitrator would be fixed as per Schedule-IV appended to the Act.