HINDUSTAN CONSTRUCTION COMPANY LTD Vs. STATE OF ORISSA

JUDGEMENT

(1.) IN this Arbitration Petition, after hearing the learned counsel for the parties on merits, the judgment was dictated and decision was pronounced on 12.8.2011 after adverting to the relevant facts and the pleadings of the case and relevant Clause 67.3 (i) of the Arbitration Agreement dated 15.9.1996, relevant provisions of the Arbitration and Conciliation Act, 1996 (for short, "the Act, 1996") and the decisions of the Apex Court upon which both the learned counsel placed reliance and after rejecting the legal contentions urged on behalf of the opp.parties by the learned Government Advocate this Court allowed the Arbitration Petition and appointed one Mr Justice P. K. Mishra, former Judge of this Court as the Arbitrator. At the time of correcting the judgment, which was dictated in open Court on 12.8.2011, and before signing after noticing the provisions of Sections 21 and 43 of the Arbitration and Conciliation Act, 1996 doubt arose whether the provision of the Limitation Act, 1963 will be applicable to the proceedings under the provisions of the Act, 1996. Therefore, the matter was listed on 9.9.2011 under the heading "To be mentioned". On that day, learned Senior Counsel Mr. R.K. Rath on behalf of the petitioner submitted that Annexure -K the notice dated 15.3.2011 was issued to the Chief Engineer of the opposite party by the petitioner expressing intention to commence the arbitration proceedings in respect of the recommendation of the Dispute Review Board (for short "DRB'), as the same was not acceptable to the petitioner for the reason that the recommendation of the DRB is impugned before the Arbitration Tribunal constituted under the repealed Arbitration Act, 1940.Therefore, this petition is filed. Under such circumstances, whether application under Section 14 of the Limitation Act is applicable or not to the Arbitration proceedings under the Act, 1996 is required to be considered. At this stage, Mr. Rath sought time to take steps in this regard. Therefore, the dictated judgment which was not signed was recalled, transcribed copy of the judgment was kept on record. The matter was adjourned on the request of the learned Sr. Counsel for the petitioner to take steps for filing application under Section 14 of the Limitation Act. That is how this matter got listed again to hear on the Misc. Case No.60 of 2011 filed under Chapter -VI, Rule 27(a) of the Rules of the High Court of Orissa, 1948 and under Section 14 of the limitation Act, 1963 read with Sections 21 and 43 of the Act, 1996. As per Clause 67.1 of the agreement, if any dispute arises between the parties, the same at the first instance shall be Dispute Review Board (DRB). If either of the parties is dissatisfied with any recommendation of the Board then either of the parties may within 14 days after receipt of the recommendation has to give notice to the other party of his intention to commence arbitration, as provided in the agreement in respect of the matter in dispute. Such notice shall establish the entitlement of the party giving the same to commence arbitration. Under Clause 67.3 of the agreement both the parties had agreed that any dispute in respect of which recommendation of DRB does not become final and binding, shall be finally settled by arbitration in accordance with the Indian Arbitration Act, 1940 in its application to the State of Orissa with statutory amendments thereof and, in such respect, procedure of the Orissa Arbitration Tribunal, Bhubaneswar shall be followed.

(2.) AFTER referring to the aforesaid clause, it is stated that petitioner being aggrieved by the recommendations of the DRB in the matter of nonimplementation of Clauses 69.4 for losses/damages incurred and extension of time due to default of the employer served a notice on 15.3.2001 on the opp. party - employer giving out the intention to commence arbitration against the recommendations of the DRB as per letter No.1795 dated 3.3.2001 received on 13.3.2001 in accordance with clause 67 of the agreement. Copies of the recommendation of the DRB dated 3.3.2001 and the notice dated 15.3.2001 are produced at Annexures -X and Y respectively. Thereafter the petitioner approached the learned Orissa Arbitration Tribunal on 18.4.2001 for adjudication of the dispute and the same was registered as AAD No.3 of 2001 before the said Tribunal.

(3.) FURTHER , it is stated that the Arbitration and Conciliation Act, 1996 came into force with effect from 22.8.1996 and the agreement was entered between the parties on 25.09.1996, therefore, they are governed by the provisions of the new Act since the Indian Arbitration Act, 1940 has been repealed under Section 85 of the new Act. On apprehension of the resultant decision of the Arbitration Tribunal being a nullity in the eye of law, the petitioner moved the learned Arbitration Tribunal on 6.6.2008 for dropping the pending Arbitration Case No. AAD No.3 of 2001 in view of the observation of the Apex Court in the case of Mahipatlal Patel v. Chief Engineer and another, 2008 AIR(SCW) 2737. Since the application of the petitioner could not be disposed of, finding no other alternative it has approached this Court in the present Arbitration Petition.