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Judgment
By way of this application filed under Section 11 (6) of the Arbitration and Conciliation Act, 1996 (for short "the Act of 1996) (as amended upto date), the petitioner-company has made the request for appointment of sole arbitrator to adjudicate and decide all the disputes with the respondent-Corporation, arising out of, and relating to, the contract work for "construction of Earth work, Bituminous Road, Approach path, External Sewerage line with septic tank & soak pit, External wall for Type-IV, Type-III & V, Type-II for IGAR (S) and Type-117 V quarters for Assam Rifles at Mantripukhuri, Manipur, Package No.123" entered between the petitioner and respondent No.1 on 14.03.2009.
The petitioner-company claims that it is a reputed construction firm engaged in construction work in the entire North East Region for several years and had earned a good name and reputation as one of the premier construction firms in the region. Petitioner-company had completed several projects for the Directorate General Assam Rifles and National Projects Construction Corporation Ltd. (NPCC) for construction of office buildings, official quarters etc. in various parts of North Eastern Region.
According to the petitioner-company, the respondent No.1-NPCC is a Government of India Enterprise having its corporate office at Haryana and Zonal office at Madanriting, Shillong working as an agency through whom the tender works for construction of various Government Department including the Directorate General of Assam Rifles are allotted to different contractors. The respondent No.2 the Directorate General of Assam Rifles is a Government Department under the Ministry of Home Affairs, New Delhi having its Head Quarter at Laitkor Peak, Shillong. The office of the Directorate General of Assam Rifles for construction of various office building, staff quarter etc. engaged respondent No.1 as the agency for allotting the various tender works.
Petitioner-company asserts that the various letters and reminders were sent to the respondents for payment of pending escalation amount for the extended period. The respondent No.1-NPCC on principle had accepted the escalation as claimed by the petitioner-company and forwarded the same to the Chief Engineer, H.Q., DGAR, Shillong requesting the respondent No.2 to make payment at the earliest but the respondent No.2 vide letter dated 27.02.2017 did not accept the claim for escalation as informed by respondent No.1 to the petitioner-company vide letter dated 28.03.2017. The respondent No.2 did not consider the escalation amount for payment on the ground that the escalation was not claimed in the subsequent quarter and the bills were forwarded after a belated period which would not cover under the 12th Plan budget for payment of bills. Petitioner also asserts that request was made to the respondents to pay the escalation bills within a period of fifteen days from the date of receipt of the notice failing which necessary legal steps will be initiated.
Thus, a clear dispute had arisen between the parties in connection with and relating to the contract agreement. Clause 18 of the contract agreement provides for arbitration clause. The petitioner-company vide letter dated 30.03.2019 addressed to the Chairman and Managing Director, NPCC through pleader requested for appointment of a sole arbitrator for adjudication of the disputes. But the respondent No.1 had failed to appoint the sole arbitrator within thirty days from the date of receipt of the letter requesting for appointment of arbitrator as per clause 18 of the contract agreement. Hence, the present application under Section 11 (6) of the Act of 1996 seeking for appointment of an arbitrator for adjudicating the disputes arises between the parties.
I have heard learned counsel for the parties. There is Clause 18 of the agreement which provides for resolution of dispute between the parties through arbitration. Clause 18 of the agreement, reads as under:-
"Clause 18 ARBITRATION CLAUSE: Except where otherwise provide in the contract all question and disputes relating to the meaning of the specification, designs drawing and instructions before mentioned and as to the quality of workmanship or materials used on the work or as to any other question, claim, rights, matter or things whatsoever in anyway arising out of or relating to contract design, drawing, specifications, estimates, construction order or these conditions or otherwise concerning the works or the execution or failure to execute the same, where arising during the progress of the works or after the completion or abandonment thereof shall be referred to the sole arbitration of the persons appointed by the Chairman and Managing Director of National Projects Construction Corporation Ltd. Acting as such at the time of dispute. It will be no objection to any such appointment that the arbitrator so appointed is a Corporation's Officer, that he had to deal with the matters to which the contract relates and that in the course of his duties as Corporation Officer he had expressed views on all/ or any of the matters in disputes or difference. The arbitrator to whom the matter is originally referred being transferred or vacating his office or being unable to act for any reasons, the Chairman and Managing Director, shall appoint another person to act as arbitrator in accordance with reference from the date at which it was left by his predecessor. It is also a term of this contract that person other than a person appointed by the Chairman and Managing Director as aforesaid should act as Arbitrator and if for any reason, that is not possible, the matter is not to be referred to arbitration at all. The arbitrator may from time to time with the consent of the parties, enlarge the time for making and publishing the award. Subject as aforesaid the provisions of the Arbitration & Reconciliation Act, 1996 or any statutory modification or reenactment thereof and the rules made there under and for the time being in force shall apply to the Arbitration proceeding under this Clause. The Court of Shillong only and no other shall have the jurisdiction with regard to any dispute or difference or suit relating to the contract. The arbitrator shall give reasons for the award."
Undisputedly, from the material placed on record, it is clear that the petitioner made a request to the respondents to appoint an arbitrator in accordance with the said arbitration agreement but the respondents failed to appoint the sole arbitrator for adjudicating the disputes between the parties.
In view of the above, it is just and proper that an independent arbitrator is appointed to adjudicate and decide the dispute between the parties including their claims, counter claims and objections. There was consensus between learned counsel for the parties for appointment of Mr. Justice B.K. Sharma, former Judge of Gauhati High Court to be an arbitrator. Accordingly, Mr. Justice B.K. Sharma, former Judge of Gauhati High Court is appointed as arbitrator in this case to adjudicate upon and decide all the disputes between the parties including their claims, counter claims and objections relating to the contract in question.
All other aspects relating to the cost of proceedings and fees are left to be determined by the arbitrator while keeping in view the law applicable and compliance of the provisions contained in Fourth Schedule to the Arbitration and Conciliation Act, 1996 (as amended up to date).
Arbitration petition stands disposed of accordingly.