Sanghvi Movers Limited vs Bharath Heavy Electricals Limited

Sanjay Kishan Kaul, C.J.—The dispute inter se the parties emanates from a contract placed by the respondent on the petitioner pursuant to a tender notice dated 25.06.2012 for supply of Hydraulic Axles and Pullers to transport consignments from Tiruchirapalli Plant/unit to various parts of the country, the petitioner having been found the highest bidder. The Letter of Intent dated 05.10.2012 and Letter of Confirmation of Contract with work/rate schedule dated 05.12.2012 were followed up with the formal contract agreement dated 11.12.2012.

The petitioner alleges that it was constrained to withdraw the bid as per the notice dated 21.01.2013, as the respondent was pressurizing it to lift and transport huge quantity of consignment, which was over and above the capacity of the hydraulic axles owned by the petitioner and that too without settling the legitimate dues payable to the petitioner. Parties blame each other. The disputes could not be resolved. The petitioner, thus, issued a notice dated 28.03.2014 setting out the history of disputes and invoking arbitration, in view of the arbitration clause 28, which reads as under:

''''Any dispute arising out of this Contract shall be referred to the Executive Director, Bharat Heavy Electricals Limited, Tiruchirappalli-620014 or his authorised Representative for sole arbitration and his decision shall be final and binding on both the parties.''''

There has been no reply to the said notice nor has any Arbitrator been appointed.

The only aspect urged on behalf of the respondent is that the arbitration clause vested the authority to take up arbitration with the Executive Director of the respondent or his representative. On the other hand, the letter of invocation dated 28.03.2014 in para 22 urged as under:

''''22. In view of the above, there are disputes and difference arisen between us as to the terms, implementation, rights and obligations of each party under the said tender contract. For all the afore stated reasons, we hereby request you to nominate an independent person, not being an Executive Director of BHEL, whose (sic) is agreeable to us as an arbitrator to adjudicate and decide upon all the disputes...''''

He, thus, submits that there was lack of proper invocation of the arbitration clause.

I am unable to agree with the submission of learned counsel for the respondent for the reason that even if the petitioner had prayed, in its wisdom, for an independent arbitrator, the fact remains that the arbitration clause was invoked by addressing the Designated Authority. The Designated Authority could have undertaken the task of arbitration itself or appointed an Arbitrator. It chose to do neither and sat silent, thus, forfeiting its right to appoint the arbitrator.

There is no controversy about the fact that there is an arbitration clause, that disputes have arisen and that this Court has jurisdiction.

In view of the aforesaid, I appoint Mr.Justice S.Rajeswaran, a Retired Judge of this Court, as the Sole Arbitrator, to enter upon the reference and after issuing notice to the parties and upon hearing them, pass an award as expeditiously as possible, preferably within a period of six months from the date of receipt of this order. The learned Arbitrator is at liberty to fix the remuneration and other incidental expenses, which shall be borne equally by both the parties.

Accordingly, the original petition is allowed, leaving the parties to bear their own costs.