High Court of DelhiARB.P./115/2024

M/S Vardhman Precision Profiles And Tubes Pvt. Ltd. v. Bharat Heavy Electricals Limited

2024-09-02Hon'Ble Mr. Justice Jasmeet Singh10 pages

$~4 *

IN THE HIGH COURT OF DELHI AT NEW DELHI

+ ARB.P. 115/2024 M/S VARDHMAN PRECISION PROFILES AND TUBES PVT. LTD.

.....Petitioner Through:

Mr. Anurag Ojha, Mr. DN Chaturvedi, Mr. Deepak Somani, Mr.

Vipul Kumar, Mr. Subham Kumar, Advs.

Versus

BHARAT HEAVY ELECTRICALS LIMITED .....Respondent Through:

Ms. Mani Gupta, Mr. Aman Choudhary, Ms. Sonali Jain, Advs.

CORAM:

HON'BLE MR. JUSTICE JASMEET SINGH

O R D E R

% 02.09.2024 1.

This is a petition filed under section 11(6) of the Arbitration and Conciliation Act, 1996 seeking appointment of a Sole Arbitrator to adjudicate the disputes between the parties.

The facts are that the respondent floated a tender dated 19.07.2012 for construction of Halls made up of Pre-Engineered steel structures Building including associated work required for HVDC Project at Agra in Uttar Pradesh ("project"). The said project was divided in 2 parts i.e. Supply part and Erection part, however a single tender was floated for the execution of the project as both the parts were interrelated. . 3.

The petitioner qualified the pre-qualification technical bid criteria and being the lowest bidder was awarded the said project and in this regard, the respondent issued 2 separate Letter of Intents ("LoI") in favour of the petitioner for the supply part and the erection part. 4.

Subsequently, 2 work orders were issued, both dated 21.09.2013 i.e. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above.

(i) TBSM/AGRA-HVDC/PEB/PKG-111/SUPPLY/W0/31/13-14 for the Supply part and (ii) TBSM/AGRA-HVDC/PEB/PKG111/ERECTION/W0/31/13-14 for the erection part. Later on, the entire contract was terminated by the respondent on 30.09.2015 and since certain disputes arose between the parties, the petitioner invoked arbitration on 05.10.2016. However, since the respondent did not respond to the letter invoking arbitration, the petitioner filed a petition filed under section 11 of the Arbitration and Conciliation Act, 1996 and vide order dated 20.11.2018 passed in Arb. P. 614/2018, a sole arbitrator was appointed to adjudicate the dispute between the parties.

Since the arbitral proceedings did not complete on time, the petitioner filed an application under section 29A of the Arbitration and Conciliation Act, 1996 seeking extension of time for a period of 1 year to conclude the arbitral proceedings and the parties at joint request also made a request for a substitute arbitrator and Justice Indu Malhotra (Retd.) was appointed as the substitute arbitrator.

During the pendency of the arbitral proceedings, the parties attempted to amicable resolve the disputes arisen by way of conciliation and a committee came to be constituted by the respondent and in this regard, the representatives of the petitioner had meetings with the said committee on 02.07.2021, 07.10.2021 and 22.02.2022. Furthermore, the parties agreed that if the disputes between the parties are not settled another arbitrator shall be appointed. Thereafter, with consent the earlier Arbitrator was substituted by another Arbitrator.

Since the conciliation could not fructify, Mr. Justice Zaki Ulah Khan, (Retd.), Allahabad High Court was appointed as an Arbitrator. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above.

It is stated that the respondent had informed the petitioner that an official appointment letter dated 19.08.2023 had been issued by the respondent to the appointed arbitrator, wherein the arbitrator only scheduled the arbitral meetings with respect to the work order pertaining to the supply part and not the erection part. Hence, the dispute in the present petition only pertains to the whether the dispute under the work order regarding the erection part can be referred to the Arbitrator. 9.

Ms. Gupta, learned counsel for the respondent states that the claim for erection part has expired by efflux of time and hence are ex-facie barred by limitation.

10.

In this regard, learned counsel relies upon para 4 of the application filed by the petitioner under Section 29(A) of the Arbitration and Conciliation Act, 1996 which reads as under:

"4.

Thus at the time of issuing the letter of intent, the work was divided into 2 parts, one is supply part and the other is erection part and as such 2 separate Letter of Intents were issued for both the works. The present Petition is concerned with the Supply Part and the Letter of Intent dated 26.10.2012 was issued to the Petitioner for the Supply Part of the tender for a total consideration of ₹ 39,62,17,876/- including taxes & duties as per the items with the bill of quantities. The salient features of the agreement were as under:- (i) Name of work :

Design, Engineering, Supply, Fabrication, shipment to job site, erection, and commissioning of DC Hall-Pre Engineered Building including associated work required for +/-800KV NE-Agra HVDC Project at Agra. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above.

(ii) 19.07.2012 :

NIT Published by the Respondent (iii) Total tender amount After Rebate :

₹ 39,62,17,876/- (iv) Date of Agreement :

13.02.2014 (v) Stipulated dates of Completion (Hall Wise) DC Hall 1 :

20.02.2013 DC Hall 2 :

20.06.2013 DC Hall 3 :

20.11.2013 DC Hall 4 :

20.02.2014 (vi) Actual date of Completion:

N/A=work rescinded on 30.09.2015"

11.

She states that the petitioner in his application filed under Section 29(A) of the Arbitration and Conciliation Act, 1996 only sought extension of the mandate of the Arbitrator for the supply part. 12.

She further states that the submission of the petitioner that a fresh cause of action has arisen for both the supply part and the erection part is misconceived as the conduct of the petitioner itself shows that it has abandoned the claim vis-a-vis the erection part and as far as the claim of the supply part is concerned, it is the case of the petitioner that a fresh cause of action has arisen.

13.

She states that in view of the facts recorded hereinabove, it is clear that the claim arising out of the erection part of the contract has lapsed by limitation.

14.

I have heard learned counsel for the parties. 15.

In the present case, the minutes of the meeting dated 02.07.2021, The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above.

07.10.2021 and 22.02.2022 are relevant and the same reads as under: The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above.

The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above.

16.

A perusal of the aforesaid minutes of the meeting indicate that the correspondence between the parties were pertaining to both the supply part and the erection part.

17.

It is pertinent to mention that the parties themselves terminated the mandate of Justice Indu Malhotra (Retd.) in order to amicably resolve the disputes by way of conciliation and in this view, a committee was formed by the respondent which held meetings with the petitioner. 18.

To my mind, if the disputes were only pertaining to the supply part, then there was no requirement for the parties to have correspondence pertaining to both the supply and erection part in the minutes of the meeting. Moreover, in the minutes of meeting the very fact that the parties were trying to settle the disputes both arising out of supply and erection part show that the claims were subsisting and alive.

19.

The Court at this stage in view of law laid down by the Hon'ble Supreme Court in SBI General Insurance Co. Ltd vs Krish Spinning 2024 SCC OnLine SC 1754 is not required to minutely decide the issues raised by the parties as they would be within the domain of the learned Sole Arbitrator including disputes pertaining to the question of limitation. 20.

This court under Section 11 of the Arbitration and Conciliation Act, 1996 is only to see the prima facie existence of the arbitration agreement and in view of the facts narrated above, it cannot be said today that the claims under the erection part have been abandoned or have been given up. However, the respondent is at liberty to agitate these issues and the learned Arbitrator shall decide the same uninfluenced by the observations made hereinabove as the same are only for the purposes of deciding the The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above.

application under Section 11 of the Arbitration and Conciliation Act, 1996. In view of this matter, the following directions are issued:- vii) Ms. Justice Hima Kohli (Retd.) (Mob. No. 9871300036) is appointed as a Sole Arbitrator to adjudicate the disputes between the parties. viii) The arbitration will be held under the aegis of the Delhi International Arbitration Centre, Delhi High Court, Sher Shah Road, New Delhi hereinafter, referred to as the 'DIAC'). The remuneration of the learned Arbitrator shall be in terms of the Delhi International Arbitration Centre (Administrative Cost and Arbitrator's Fees) Rules, 2018. ix) The learned Arbitrator is requested to furnish a declaration in terms of Section 12 of the Act prior to entering into the reference. x) It is made clear that all the rights and contentions of the parties, including as to the arbitrability of any of the claim, any other preliminary objection, as well as claims on merits of the dispute of either of the parties, including the issue of limitation are left open for adjudication by the learned arbitrator.

xi) The parties shall approach the learned Arbitrator within two weeks from today.

JASMEET SINGH, J SEPTEMBER 2, 2024/DM Click here to check corrigendum, if any The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above.