Raj Sharma vs General Manager, N. RLY

C. Hari Shankar. J

ARB.P. 763/2020

The reply, to this petition, though stated to have been filed, is not on record. However, Mr. Jagjit Singh, Sr. Standing Counsel for the respondent, has addressed arguments in the absence of the reply.

The petition merely seeks reference of the disputes between the petitioner and the respondent to arbitration under Section 11(6) of the Arbitration and Conciliation Act, 1996 ("1996 Act").

The substratum of the disputes is contained in paras (i) to (xii) of para 7 of the present petition. However, as there is no contest regarding the arbitrability of the dispute, it is not felt necessary to reproduce the said paragraphs.

Clause 64 of the General Conditions of the Contract (GCC) applicable to the contracts with the railways, provides for arbitration as the mode of resolution of disputes. Sub clause (1)(i) to (1)(v) and (3)(b) of Clause 64 of the GCC may be reproduced thus:

"64.(1): Demand For Arbitration:

64.(1)(i): In the event of any dispute or difference between the parties hereto as to the construction or operation of this contract, or the respective rights and liabilities of the parties on any matter in question, dispute or difference on any account or as to the withholding by the Railway of any certificate to which the contractor may claim to be entitled to, or if the Railway fails to make a decision within 120 days, then and in any such case, but except in any of the "excepted matters" referred to in Clause 63 of these Conditions, the contractor, after 120 days but within 180 days of his presenting his final claim on disputed matters shall demand in writing that the dispute or difference be referred to arbitration.

64.(1)(ii)(a) The demand for arbitration shall specify the matters which are in question, or subject of the dispute or difference as also the amount of claim item-wise. Only such dispute or difference, in respect of which the demand has been made, together with counter claims or set off, given by the Railway, shall be referred to arbitration and other matters shall not be included in the reference.

64.(1)(ii)(b) The parties may waive, off the applicability of sub-section 12(5) of Arbitration and Conciliation(Amendment) Act 2015, if they agree for such waiver, in writing, after dispute having arisen between them, in the format given under Annexure XII of these conditions.

64.(1)(iii)(a) The Arbitration proceedings shall be assumed to have commenced from the day, a written and valid demand for arbitration is received by the Railway.

64.(1)(iii)(b) The claimant shall submit his claim stating the facts supporting the claims alongwith all the relevant documents and the relief or remedy sought against each claim within a period of 30 days from the date of appointment of the Arbitral Tribunal.

64.(1)(iii)(c) The Railway shall submit its defence statement and counter claim(s), if any, within a period of 60 days of receipt of copy of claims from Tribunal thereafter, unless otherwise extension has been granted by Tribunal.

64.(1)(iii)(d) Place of Arbitration: The place of arbitration would be within the geographical limits of the Division of the Railway where the cause of action arose or the Headquarters of the concerned Railway or any other place with the written consent of both the parties.

64.(1)(iv) No new claim shall be added during proceedings by either party. However, a party may amend or supplement the original claim or defence thereof during the course of arbitration proceedings subject to acceptance by Tribunal having due regard to the delay in making it.

64.(1)(v) If the contractor(s) does/do not prefer his/their specific and final claims in writing, within a period of 90 days of receiving the intimation from the Railways that the final bill is ready for payment, he/they will be deemed to have waived his/their claim(s) and the Railway shall be discharged and released of all liabilities under the contract in respect of these claims

xxxx xxxx xxxx

64.(3)(b): Appointment of Arbitrator where applicability of section 12 (5) of A&C Act has not been waived off : The Arbitral Tribunal shall consist of a Panel of three (3) retired Railway Officer, retired not below the rank of SAG Officer, as the arbitrators. For this purpose, the Railway will send a penal of at least four (4) names of retired Railway Officer(s) empanelled to work as Railway Arbitrator duly indicating their retirement date to the contractor within 60 days from the day when a written and valid demand for arbitration is received by the GM.

Contractor will be asked to suggest General Manager at least 2 names out of the panel for appointment as contractor's nominee within 30 days from the date of dispatch of the request by Railway. The General Manager shall appoint at least one out of them as the contractor's nominee and will, also simultaneously appoint the balance number of arbitrators either from the penal or from outside the penal, duly indicating the 'presiding arbitrator' from amongst the 3 arbitrators so appointed. GM shall complete this exercise of appointing the Arbitral Tribunal within 30 days from the receipt of the names of contractor's nominees. While nominating the arbitrators, it will be necessary to ensure that one of them has served in the Accounts Department."

Notice invoking arbitration was issued by the petitioner to the respondent on 24th August, 2020.

Given the law enunciated by the Supreme Court in Perkins Eastman Architects DPC & Anr. v. HSCC (India) Ltd (2019) SCC Online 1517. and Bharat Broadband Network Ltd. v. United Telecoms Ltd. (2019) 5 SCC 755, the respondent, obviously, cannot be conferred the right to appoint the arbitrator, though Clause 64 of the GCC so permits.

Mr. Jagjit Singh does not resist the prayer, of the petitioner, for appointment of arbitrator by this Court.

The disputed amount is stated to be approximately  Rs. 1.4 crores.

Accordingly, this Court appoints Mr. Gaurang Kanth, Advocate (Tel: 9810810005 and Email ID: gaurang@kanthcorp.com) as the arbitrator to arbitrate on the disputes between the parties.

The learned arbitrator would be entitled to charge fees in accordance with Fourth Schedule to the 1996 Act.

The learned arbitrator would also furnish the requisite disclosure under Section 12(2) of the 1996 Act within a week of entering on the reference.

All issues of fact in law are left open, including the issue whether any of the claims of the claimant, are "excepted matters" in view of the agreement between the parties.

The petition stands disposed of in the aforesaid terms.