Technofab Engineering Limited vs Government Of Rajasthan And Ors

Both the parties are in agreement that the dispute between the parties is in relation to the contract entered between them relating to Design, Construction of Work of Water Supply Projection and Distribution Network Improvement and House Services Connections of Non-revenue Water Reduction and continuous Water Supply, Construction of Water Treatment Plant, Reservoirs, Pumping Stations, and Allied Works and Construction of Sewer Network with House Connections, Construction of Sewage Pumping and Stations, Sewage Treatment Plants, Effluents Reuse and Allied Works and Operations and Maintenance Services of the Entire System at Hanumangarh. Clause 20.8 & 20.11 of the Contract of an there is an arbitration clause provides which read as under:

"20.8 Arbitration :- Unless settled amicably, and subject to Sub-Clause 20.9[Failure to Comply with Dispute Adjudication Board's Decision], any Dispute in respect of which the DAB's decision (if any) has not become final and binding shall be finally settled by international arbitration. Unless otherwise agreed by both Parties :

(a) the Dispute shall be finally settled under the Rules of Arbitration of the international Chamber of Commerce,

(b) the Dispute shall be settled by three arbitrators appointed in accordance with these Rules; and

(c) the arbitration shall be conducted in the language for communications defined in Sub-Clause 1.4 [Law and Language] unless otherwise stated in the Contract Data.

The arbitrator(s) shall have full power to open up, review and revise any certificate, determination, instruction, opinion or valuation of the Employer's Representative, and any decision of the DAB, relevant to the Dispute. Nothing shall disqualify the Employer's Representative from being called as a witness and giving evidence before the arbitrator(s) on any matter whatsoever relevant to the Dispute.

Neither Party shall be limited in the proceedings before the arbitrator(s) to the evidence or arguments previously put before the DAB to obtain its decision, or the the reasons for dissatisfaction given in its Notice of dissatisfaction. Any decision of the DAB shall be admissible in evidence in the arbitration.

Arbitration may be commenced prior to or after completion of the Works. The obligations of the Parties, the Employer's Representative and the DAB shall not be altered by reason of any arbitration being conducted during the progress of the Works." "20.11: Expiry of Dispute Adjudication Board's Appointment: If a dispute arises between the parties in connection with, or arising out of, the Contract of the execution of the works and there is no DAB in place, whether by reason of the expiry of the DAB's appointment or otherwise:

(a) Sub-Clause 20.6(obtaining Dispute Adjudication Board's Decision) and Sub-Clause 20.7(Amicable Settlement), or Sub-Clause 20.10(Dispute Arising during the Operation Service Period) as the case may be, shall not apply and

(b) the Dispute may be referred directly to arbitration under Sub-Clause 20.8(Arbitration)."

I have considered the aforesaid clauses and perused the provisions of the contract. As per clause 20.11, since DAB has not taken up the case, the dispute has to be resolved by arbitration.

Keeping in view the admitted position as noted above, this court is satisfied that as per terms of agreement the mater could not be decided by the Dispute Adjudication Board and clause 20.8 of the Arbitration Clause in the agreement as noted above will apply and for the said purpose, both the parties are in agreement that an Arbitral Tribunal be formed for adjudication and resolution dispute.

In view of above, this court is of the considered opinion that a panel of three Arbitrators as per clause 20.8 requires to be appointed for adjudication of the dispute. The panel shall be consist of two retired Judges i.e. Hon'ble The Chief Justice(Retd.) and Hon'ble Justice(Retd.) and Chief Engineer of PHED(Retd).

Accordingly, an Arbitral Tribunal consisting of the Hon'ble The Chief Justice Shri Sunil Ambwani(Retd.); Hon'ble Justice Mr. Dinesh Chandra Somani(Retd.) & Mr. Banai Singh-Chief Engineer of PHED(Retd), Govt. of Rajasthan is formed to adjudicate the dispute. The Arbitral Tribunal shall hold its proceedings at Jaipur and would be entitled to lay down its fees as provided under the Manual of Procedure for Alternative Disputes Resolution, 2009 as amended from time to time and shall complete the proceedings within a period of one year from the date it commences its functioning.

This court deems it appropriate to direct the Registry to seek consent from Hon'ble The Chief Justice Shri Sunil Ambwani(Retd.),E-190, Gr. Floor, Opp. Nehru Place, Kalkaji, New Delhi, Ph.No.9415238954 and Hon'ble Justice Mr. Dinesh Chandra Somani(Retd.), HE 404 Pratap Apartment HIG Block, Sector 29 Pratap Nagar Sanganer, Jaipur, Ph. No. 9414503566 and Mr. Banai Singh- Chief Engineer of PHED(Retd.)-482, Shanti Nagar Durgapura Railway Station, Jaipur, Rajasthan, Ph.No.9414075984 who can work from civil side.

This arbitration application is allowed. The Arbitrators shall be entitled lay down its fees as provided under the Manual of Procedure for Alternative Disputes Resolution, 2009 as amended from time to time.