Shri Ram Switchgears Pvt. Ltd. vs Urban Administration and Development Department

Prakash Shrivastava, J—Heard on the question of admission and interim relief.

This writ petition has been filed by the petitioner challenging the order dated 22.6.2012 directing the petitioner to deposit liquidated damages as also claiming refund of the liquidated damages recovered from the petitioner.

In brief, the case of the petitioner is that the agreement dated 17-20/5/2010 was executed between the petitioner and the respondent No. 2 in respect of the Urban Development Around You (UDAY) project for construction of the Transmission Lines on Rail Poles between sub-station Chhoti Khargone and sub-station Bhaklai and construction of 4 Nos. 33 KV Bays including procurement of line and Bay material. The petitioner had received the letter from one of the members of the Dispute Board on 30.8.2012 imposing the penalty of 9.90% as liquidated damages as per the contract Clause 26.2. The communication dated 22.6.2012 was also sent to the petitioner for recovery of the liquidated damages. Hence, the petitioner has filed the present writ petition challenging the same.

After hearing learned counsel for the parties and on the perusal of the record, it is noticed that the contract between the parties provides for the decision by the Dispute Board as also the Arbitration. The relevant Clause 45.3 to 45.5 of the contract between the parties provide as under:--

"45.3 Obtaining Dispute Board''s Decision

If a dispute (of any kind whatsoever) arises between the parties in connection with the performance of the Contract, including any dispute as to any certificate, determination, instruction, opinion or valuation of the Project Manager, either party may refer the dispute in writing to the DB for its decision, with copies to the other party and the Project Manager. Such reference shall state that it is given under this Sub-Clause.

For a DB of three persons, the DB shall be deemed to have received such reference on the date when it is received by the chairman of the DB.

Both parties shall promptly make available to the DB all such additional information, further access to the Site, and appropriate facilities, as the DB may require for the purposes of making a decision on such dispute. The DB shall be deemed to be not acting as arbitrator(s).

Within 84 days after receiving such reference, or within such other period as may be proposed by the DB and approved by both Parties, the DB shall give its decision, which shall be reasoned and shall state that it is given under this Sub-Clause. The decision shall be binding on both Parties, who shall promptly give effect to it unless and until it shall be revised in an amicable settlement or an arbitral award as described below. Unless the Contract has already been abandoned repudiated or terminated, the Contractor shall continue to proceed with the performance of the facilities in accordance with the contract.

If either party is dissatisfied with the DB''s decision, then either party may, within 28 days after receiving the decision, give notice to the other party of its dissatisfaction and intention to commence arbitration. If the DB fails to give its decision within the period of 84 days (or as otherwise approved) after receiving such reference, then either party may, within 28 days after this period has expired, give notice to the other party of its dissatisfaction and intention to commence arbitration.

In either event, the notice of dissatisfaction shall state that it is given under this Sub-clause, and shall set out the matter in dispute and the reasons(s) for dissatisfaction. Except as stated in GCC Sub-Clauses 45.6 and 45.7, neither party shall be entitled to commence arbitration of a dispute unless a notice of dissatisfaction has been given in accordance with this Sub-Clause.

If the DB has given its decision as to a matter in dispute to both Parties, and no notice of dissatisfaction has been given by either party within 28 days after it received the DB''s decision, then the decision shall become final and binding upon both parties.

45.4 Amicable Settlement

Where notice of dissatisfaction has been given under GCC sub-clause 45.3 above, both parties shall attempt to settle the dispute amicably before the commencement of arbitration. However, unless both parties agree otherwise, arbitration may be commenced on or after the fifty-sixth day after the day on which notice of dissatisfaction and intention to commence arbitration was given, even if no attempt at amicable settlement has been made.

45.5 Arbitration

Unless settled amicably, any dispute in respect of which the DB''s decision (if any) has not become final and binding shall be finally settled by international arbitration. Unless otherwise agreed by both Parties:

(a) arbitration proceedings shall be conducted as stated in the Special Conditions.

(b) if no arbitration proceedings is so stated, the dispute shall be finally settled by institutional arbitration under the Rules of Arbitration of the International Chamber of Commerce.

(c) the dispute shall be settled by three arbitrators, and

(d) the arbitration shall be conducted in the language for communications defined in GCC Sub-clause 5.3.

The arbitrator(s) shall have full power to open up, review and revise any certificate, determination, instruction, opinion or valuation of the Project Manager, and any decision of the DB, relevant to the dispute. Nothing shall disqualify the Project Manager from being called as a witness and giving evidence before the arbitrator(s) on any matter whatsoever relevant to the dispute.

Neither party shall be limited in the proceedings before the arbitrator(s) to the evidence or arguments previously put before the DB to obtain its decision, or to the reasons for dissatisfaction given in its notice of dissatisfaction. Any decision of the DB shall be admissible in evidence in the arbitration.

Arbitration may be commenced prior to or after completion of the Works. The obligation of the Parties, the Project Manager and the DB shall not be altered by reason of any arbitration being conducted during the progress of the Works."

Since it is a contractual matter and the petitioner has remedy of redressal of the grievance under the aforesaid clauses, therefore, no case is made out to entertain the present writ petition. Even otherwise, the impugned notice in respect of the recover of the liquidated damages is dated 22.6.2012 and the present writ petition has been filed by the petitioner on 6.8.2015. It is also settled that in the contractual matter, scope of interference in writ jurisdiction is limited.

In these circumstances, no ground is made out to entertain the writ petition which is accordingly dismissed, however with liberty to the petitioner to avail the remedy in terms of Clauses 45.3 to 45.5 of the contract.

C.C. as per rules.