MBL INFRASTRUCTURES LIMITED Vs. NORTH WESTERN RAILWAY

JUDGEMENT

(1.) THE present arbitration application has been filed by the applicant seeking appointment of an independent Arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as "the said Act").

(2.) THE short facts necessary for the purpose of deciding the present application are that the applicant was awarded the contract pursuant to the tender invited by the respondent in respect of the residual composite work for the construction of 36 units type IV and 36 units type V quarters in multi storied towers for North Western Railway Officers Colony, in connection with setting up of the North Western Railway, at Jaipur. The said contract was awarded for the total cost of Rs. 27,25,46,971.55/ - on 08.05.2012. It appears that after the submission of performance bank guarantee and completion of other formalities, the petitioner had started work at the site, however the petitioner was informed to stop the work by the respondent, vide the letter dated 13.08.2012, on account of some order passed by the Apex Court in the petition filed by the land owners challenging the acquisition of the lands in question. The said order was vacated subsequently by the Apex Court and the work was restarted. However, certain disputes arose between the petitioner and the respondent. The respondent thereafter had issued the notice dated 09.04.2013 calling upon the petitioner to show cause as to why the contract of the petitioner should not be terminated. The petitioner therefore had filed the petition under Section 9 of the said Act in the Court of Additional District Judge, Jaipur. The petitioner also invoked the arbitration clause as contained in the agreement in question vide the letter dated 14.04.2014 (Annexure -P/16). The said letter was replied by the respondent vide the letter dated 13.06.2014 (Annexure -P/17) requesting the petitioner to give item wise claim for all the items as per GCC Clause 64(1)(ii). Since the petitioner did not respond to the said letter, the respondent again wrote the letter dated 03.07.2014 (Annexure -P/18) requesting the petitioner to submit the requisite information. The petitioner thereafter vide the letter dated 15.07.2014 (Annexure -P/19) furnished the details of claims and requested the respondent to provide list of Arbitrators as per Clause 64 of the contract agreement. In response thereto, the respondent informed the petitioner vide the letter dated 20.08.2014 (Annexure -P/20) inter alia that the total amount of claims submitted by the petitioner was more than 20% of the contract value and therefore the provision of Clauses 63, 64 and other Clauses of GCC would not be applicable for settlement of such disputes in view of Clause 38.3 and 81 of the special condition/specification of the contract (part -I) non technical. The petitioner in response to the said letter therefore submitted the revised claims confining them to the extent of 20% of the contract value, as per the letter dated 05.09.2014 (Annexure -P/21). However, the respondent did not appoint the Arbitrator and therefore the petitioner has filed the present application.

(3.) BEFORE appreciating the submissions made by the learned counsels for the parties, it would be apposite to reproduce the relevant clauses of the General Conditions of the Contract: - -