Gypsum Structural India Pvt. Ltd. v. Union Of India Through The Executive Engineer And ANR.

IN THE HIGH COURT AT CALCUTTA

[ CIRCUIT BENCH AT PORT BLAIR *** AP/6/2023 Gypsum Structural India Pvt. Ltd.

Vs.

Union of India through the Executive Engineer and another Mr. Terence D'Cruz ... for the petitioner Mr. V.D.Sivabalan ... for the respondents September 29, 2023 [SR] Item No.16 Clause 25 of the terms and conditions governing the transactions between the parties indicate that before the party raising a dispute, proceeds for appointment of the arbitrator, he has to pass through the Dispute Redresseal Committee (DRC). It is only after a decision is given by the said Dispute Redressal Committee and having dissatisfied with or in the event no decision has been taken, either of the parties may within the period of thirty days from the date of receipt of the said decision, give notice to the Chief Engineer for appointment of an arbitrator. The said clause 25 is quoted as under:

"CLAUSE 25:

Except where otherwise provided in the contract, all questions and disputes relating to the meaning of the specifications, design, drawings and instructions here-in before mentioned and as to the quality of workmanship or materials used on the work or as to any other question, claim, right, matter or thing whatsoever in any way arising out of or relating to the contract, designs, drawings, specifications, estimates, instructions, orders or these conditions or otherwise concerning the works or the execution or failure to execute the same whether arising during the progress of the work or after the cancellation, termination, completion or abandonment thereof shall be dealt with as mentioned hereinafter: (i) If the contractor considers any work demanded of him to be outside the requirements of the contract, or disputes any drawings, record or decision given in writing by the Engineer-in-Charge on any matter in connection with or arising out of the contract or carrying out of the work, to be unacceptable, he shall promptly within 15 days request

the Superintending Engineer in writing for written instruction or decision. Thereupon, the Superintending Engineer shall give his written instructions or decision within a period of one month from the receipt of the contractor's letter. If the Superintending Engineer fails to give his instructions or decision in writing within the aforesaid period or if the contractor is dissatisfied with the instructions or decision of the Superintending Engineer, the contractor may, within 15 days of the receipt of Superintending Engineer's decision, appeal to the Chief Engineer who shall afford an opportunity to the contractor to be heard, if the latter so desires, and to offer evidence in support of his appeal. The Chief Engineer shall give his decision within 30 days of receipt of contractor's appeal.

If the contractor is dissatisfied with the decision of the Chief Engineer, the contractor may within 30 days from the receipt of the Chief Engineer decision, appeal before the Dispute Redressal Committee (DRC) along with a list of disputes with amounts claimed in respect of each such dispute and giving reference to the rejection of his disputes by the Chief Engineer. The Dispute Redressal Committee (DRC) shall give his decision within a period of 90 days from the receipt of Contractor's appeal. The constitution of Dispute Redressal Committee (DRC) shall be as indicated in Schedule 'F'.

If the Dispute Redressal Committee (DRC) fails to give his decision within the aforesaid period or any party is dissatisfied with the decision of Dispute Redressal Committee (DRC), then either party may within a period of 30 days from the receipt of the decision of Dispute Redressal Committee (DRC), give notice to the Chief Engineer for appointment of arbitrator on prescribed proforma as per Appendix XV, failing which the said decision shall be final binding and conclusive and not referable to adjudication by the arbitrator.

It is a term of contract that each party invoking arbitration must exhaust the aforesaid mechanism of settlement of claims/disputes prior to invoking arbitration.

Admittedly, the petitioner approached the DRC by causing a letter dated 12th October, 2022. Though certain correspondences have been exchanged by the DRC but the clause, as quoted hereinabove, is explicit and clear that the in the event, the said DRC fails to take any decision within a period of 90 days, either of the parties may within a period of 30 days there from proceed for appointment of the arbitrator.

Upon an expiration of 90 days from the date, when the approach was made to DRC, the petitioner served a notice to the Chief Engineer on 28th March, 2023 for appointment of an arbitrator in terms of the said clause. Since the statutory period within which the said authority must communicate the name of

the arbitrator expired, the application has been taken out. The contract is not in dispute so also the arbitration agreement. The mode and modalities for appointment of the arbitrator has been provided therein and it appears that the petitioner has exhausted the same and on failure on the part of the respondent authorities in not naming and/or appointing the arbitrator, confers a right on the petitioner to approach the Court for appointment of arbitrator.

Since the petitioner has acted on the basis of the conditions made in the said Clause 25, I, therefore dispose of the instant application by appointing Hon'ble Justice Subrata Talukdar (Retired) as a sole arbitrator for deciding the dispute raised by the petitioner. The remuneration of the arbitrator shall be as per the IVth Schedule of the said Act.

Apart from the same, the arbitrator shall be provided a conveyance charges as well as the charge of the hotel which may include lodging and fooding and the conveyance within the islands to be shared by both the parties. Apart from the same, the clerical and other incidental charges for conducting the arbitrator shall also be borne by the parties in equal share.

With these observations, the arbitration petition being AP/6/2023.

Urgent Photostat certified copies of this order, if applied for, be made available to the parties subject to compliance with requisite formalities.

( Harish Tandon, J. )