SHRIRAM EPC LIMITED Vs. KERALA FEEDS LTD

JUDGEMENT

(1.) The petitioner/applicant is a company incorporated under the Companies Act , 1956, having its registered office at 4th floor, Sigappi Achi Building, Door No.18/3, Rukmini Lakshmipathi Road (Marshalls Road), Egmore, Chennai, Tamilnadu. It is stated that the petitioner was awarded a contract pursuant to a Global Tender for design, engineering, supply, erection, testing and commissioning of all structural, mechanical, electrical and instrumentation equipments/works for a 300 Ton Per Day cattle feed plant at Thiruvangoor in Kozhikode District for a total order value of Rs.30.28 crores. It is the case of the petitioner that though it had completed the entire work within the period mutually extended by the parties, and although the respondent had issued both the Provisional and Final Acceptance Certificates, the respondent had refused to honour the claim of the petitioner for additional charges for extra works to the tune of Rs.10.53 crores. It is also the case of the petitioner that the respondent issued to the petitioner show cause notices proposing to deduct 10% of the contract amount towards liquidated damages which the petitioner had seriously refuted. It is the said disputes that have arisen between the parties, that the petitioner intends to get redressed through the arbitration mechanism contemplated between the parties under the agreement entered into with the respondent. The arbitration clause is contained at clause 25 of the General Conditions of Contract and clause 7.0 of the Special Conditions of Contract. They read as follows:

(2.) Through a counter affidavit filed on behalf of the respondent, the respondent contends that the invocation of the arbitration clause is severely belated, and hence, the claim is barred by limitation. It is their further contention that inasmuch as the claim itself is belated, the arbitration clause in the agreement has become inoperative.

(3.) On a consideration of the rival submissions, I find that it is not in dispute between the parties that, in the agreement entered into between them, there was a dispute resolution clause which required the parties to invoke arbitration as a dispute resolution mechanism. Consequent to the judgment of the Supreme Court in Uttarakhand Purv Sainik Kalyan Nigam Ltd. (M/s.) v. Northern Coal Field Limited - [2019 KHC 7177], this Court, in exercise of its powers under Section 11(6A) , is required only to examine the existence of the arbitration agreement, and all other preliminary or threshold issues are to be left to be decided by the arbitrator appointed by this Court. Since, in the instant case, there is no dispute with regard to the existence of the arbitration agreement in the contract between the parties, I deem it appropriate to nominate Justice (Retd.) Sri.T.R.Ramachandran Nair, a former Judge of this Court, as the sole arbitrator to arbitrate on the disputes that have arisen between the parties herein.