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Judgment
Heard Mr. A.Venkatesh, learned Senior appearing for Mr. Aadesh Varma, learned counsel for the applicants and Mr. Ch. Jaya Krishna, learned counsel representing Mr. K.Ravinder Reddy, learned Standing Counsel for the respondent- Greater Hyderabad Municipal Corporation (GHMC).
In these applications under Section 11(6) of the Arbitration and Conciliation Act, 1996 (briefly ‘the A&C Act’), the applicants seek appointment of an arbitrator to resolve their disputes with the respondent- GHMC.
Facts giving rise to filing of these applications briefly stated are that GHMC had issued tender notification dated 05.10.2016 for construction of Foot over Bridges (FOB) at various locations of Hyderabad under the PPP mode on a commercial format. Applicants having participated in the competitive bidding, stood as successful bidders. GHMC had issued Letter of Intent (LoI) to the applicants dated 19.05.2017. Clause 11 of the aforesaid LoI contains an arbitration clause, which is extracted below for the facility of reference:
Notwithstanding anything to the contrary contained hereinabove, the arbitration clause hereunder shall be a final and binding agreement between the GHMC and the preferred bidder and shall survive the cancellation/revocation/annulment of this LoI.
i. Any and all disputes controversy or claim, relating to or arising out of the LoI or the rights and obligations of the GHMC and the Preferred Bidder, under this LoI, including but not limited to validity, interpretation, scope, effect, termination of the terms contained in this LoI, shall be settled by arbitration by a sole arbitrator to be appointed by the GHMC or his nominee within thirty (30) days after receipt of a request for appointment of arbitrator, which notice should contain all information regarding the dispute(s) between the parties.
ii. The arbitration shall be conducted in accordance with the Arbitration and Conciliation Act, 1996 as amended. The venue of arbitration shall be at Hyderabad, India and it shall be conducted in the English language.
iii. The arbitral award shall be in writing, state the reasons for the award and be final and binding on the GHMC and the Preferred Bidder. The award may include an award of costs, including reasonable attorney’s fees and disbursements.
Thereafter, the parties entered into an Authorisation Agreement on 26.10.2017, the recital of which provides that the LoI shall be attached to the said agreement as Appendix I. Sub-clause (a) of Clause 1.2.1 of the aforesaid agreement reads as under:
Appendices to this Agreement form an integral part of this Agreement and will be in full force and effect as though they were expressly set out in the body of this Agreement.
Thus, it is evident that the LoI, which is the integral part of the agreement, contains an arbitration clause.
Learned Senior Counsel for the applicants submits that the LoI, which forms the integral part of the agreement contains an arbitrator clause and since the disputes have arisen between the parties, the matter requires resolution by an arbitrator.
On the other hand, learned counsel for the GHMC submits that there is no arbitration clause and therefore, the agreement cannot be referred for arbitration.
I have considered the submissions made on both sides.
On a conjoint reading of Clause 11 of the LoI as well as Clause 1.2.1 (a) of the agreement, it is evident that the LoI, which contains an arbitration clause, forms integral part of the agreement. The negotiations having been failed between the parties, the applicants have invoked the arbitration clause. The dispute between the parties requires to be resolved by an arbitrator in the manner provided under the agreement.
Accordingly, a former Judge of this Court- Mr. Justice Challa Kodanda Ram (resident of Plot No.68, Road No.71, Phase III, Jubilee Hills, Hyderabad-34; Mobile No.8331010695) is appointed as sole arbitrator to adjudicate the dispute between the parties.
The parties undertake to appear before the sole arbitrator on 25.11.2023 at 11:00 a.m. along with a copy of this order.
Thereupon, the sole arbitrator shall proceed with the arbitral proceedings in accordance with law.
Accordingly, the Arbitration Applications are allowed. No costs.
As a sequel, miscellaneous petitions, pending if any, stand closed.