KIRIT CONSTRUCTION COMPANY Vs. MONTE CARLO LIMITED

JUDGEMENT

(1.) Present petition has been preferred by the petitioner herein to appoint a sole arbitrator as per Arbitration Clause 14(a) of the MOU dated 27.01.2015 to adjudicate upon the dispute between the parties and such claims that arise out of the said MOU, in exercise of powers under Section 11(6) of the Arbitration and Conciliation Act, 1996 as amended from time to time.

(2.) It is the case on behalf of the petitioner that Rail Vikas Nigam Limited invited tender for the Project namely execution of gauge conversion of meter gauge track between Sabarmati and Botad, construction of road bed, bridges, supply of ballast dismantling of existing M.G. Track, installation of track, electrical (general electrification) signaling and telecommunication works of Ahmedabad and Bhavnagar Divisions of Western Railway, Gujarat, India in two packages. It is the case on behalf of the petitioner that represented that it had adequate experience and expertise in track linking work and it is willing to exclusively execute the ballast supply and track linking work involved in PackageI and PackageII of the aforesaid project. Therefore, the petitioner approached the respondent and offered rates before bidding and the said rates were accepted by the respondent before bidding. According to the petitioner, for package II the estimated cost of the project was to the tune of Rs.266, 88, 44, 553/ and for the work to be undertaken and carried out by the petitioner, the rates quoted are to the tune of Rs.56, 44, 88, 689.09. According to the petitioner, for Package II, the estimated cost is to the extent of Rs.265, 62, 47, 593/ and for the work to be undertaken and carried out by the petitioner, the rates offered are to the tune of Rs. 61, 79, 25, 153.93. According to the petitioner, the respondent has therefore, entered into Memorandum of Understanding with the petitioner on 27/01/2015. It is the case on behalf of the petitioner that as per the terms and conditions of the said MOU, the petitioner was required to raise IPC/RA Bill to the respondent every month for the executed ballast supply and track linking only after approval from the competent authority. Since the petitioner expressed its inability to provide performance security deposit and guarantee of 10% of ballast supply and track linking work value to the respondent on back to back basis, the respondent has insisted from the petitioner to provide deposit of Rs.50, 00, 000/ by cheque immediately on signing of the said MOU and also to provide Rs.1.5 crore back to back performance bank guarantee to the respondent in its format from any Nationalized / Scheduled Bank on award of the project to the respondent/ joint venture. According to the petitioner, it was also agreed with regard to retention money that the respondent would deduct or withhold security deposit/ retention money amount of 5% of each bill payment for work executed by the petitioner and 50% of which withheld amount of retention money shall be released to the petitioner on completion of work and issue of completion certificate by the competent authority and balance 50% of the withheld amount of retention money shall be released on completion of defect liability period as per condition of contract with the competent authority. According to the petitioner, it was also agreed that the respondent will not pay any kind of interest on retention money withheld from the petitioner. According to the petitioner, the petitioner was not required to provide any mobilization advance facility or loan of whatsoever kind to the respondent.

(3.) In response to the notice issued by this Court, Shri Mihir Thakore, learned Senior Advocate has appeared on behalf of the respondent and has opposed the present application. An affidavit in reply is filed on behalf of the respondent opposing the present application. Present petition for appointment of sole arbitrator is opposed on the following grounds/ reasons.