,,
JAYANT NATH, J",,
1. This petition is filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as „the Arbitration Act‟) seeking",,
appointment of a Sole Arbitrator to adjudicate the disputes between the parties.Â,,
2. The case of the petitioner is that the petitioner was awarded the “Work of Site Leveling and Infrastructure Works Package for Meja Thermal,,
Power projects†vide Letter of Award of work contract on 18.05.2010. The parties executed a contract on 21.09.2010. The respondent is a joint,,
venture company of NTPC and Uttar Pradesh Rajya Vidyut Utpadan Nigam Ltd. Clause 56 of the Agreement i.e. the Arbitration Clause reads as,,
follows:-,,
“56. Except where otherwise provided for in the contract all questions and disputes relating to the meaning of the specifications, designs, drawings",,
and instructions herein 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 of otherwise concerning the works, or the execution or failure to execute the same whether arising during the progress of the work or",,
after the completion or abandonment thereof shall be referred to the sole arbitration of the General Manager of NTPC Limited (Formerly National,,
Thermal Power Corporation Ltd)., and if the General Manager is unable or unwilling to act, to the sole arbitration of some other person appointed by",,
the Chairman and Managing Director, NTPC Limited (Formerly National Thermal Power Corporation Ltd.), willing to act as such arbitrator. There",,
will be no objection if the arbitrator so appointed is an employee of NTPC Limited (Formerly National Thermal Power Corporation Ltd)., and that he",,
had to deal with the matters to which the contract relates and that in the course of his duties as such he had expressed views on all or any of the,,
matters in dispute or difference. The arbitrator to whom the matter is originally referred being transferred or vacating his office or being unable to act,,
for any reason as aforesaid at the time of such transfer, vacation of office or inability to act, Chairman and Managing Director, NTPC Limited",,
(Formerly National Thermal Power Corporation Ltd.), shall appoint another person to act as arbitrator in accordance with the terms of the Contract. It",,
is also a term of this Contract that no person other than a person appointed by CMD., NTPC Ltd. 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.",,
Subject as aforesaid the provision of the Arbitration Act, 1940, or any statutory modification or re-enactment thereof and the rules made thereunder",,
and for the time being in force shall apply to the arbitration proceeding under this clause.,,
.........â€,,
3. Vide amendment No.1 the contract was amended as under:-,,
“A) the CMD NTPC stood replaced with CEO MUNPL,",,
B) in the line 9, 10 and 11, it was mandated to replace “Shall be referred to ........ unable†with “Shall be referred to the Sole arbitration of the",,
Project-in-Charge concerned of MUNPL and if the Project-in-Charge is unable……â€,,
C) Arbitration Act 1940 is to be read as Arbitration and Conciliation Act 1996 (necessary Change may also be made in proforma Contract,,
Agreement).â€,,
4. It is pleaded that during the currency of the agreement, disputes arose between the parties regarding the payments demanded by the petitioner. The",,
petitioner invoked the arbitration Clause on 01.03.2013. In response to the said communication, the respondent appointed the then Project In-charge,",,
namely, Mr. Narsingh as the Sole Arbitrator to adjudicate the disputes between the parties. He marked the case as Arb. Case No. 1/2013.",,
5. However, subsequently on 17.01.2014, the respondent terminated the contract. On 22.02.2014, the respondent raised a demand of Rs.202.43 crores",,
on the petitioner on account of anticipated risk and cost as well as damages/losses. The respondent thereafter also invoked the arbitration Clause on,,
22.03.2014. Mr. Narshingh was again appointed as the Sole Arbitrator vide communication dated 02.04.2014 of the respondent. The new arbitration,,
case based on the invocation by the respondent was marked as Arb. Case No. 1/2014.Â,,
6. It is the case of the petitioner that in the new case being Arb. Case. No. 1/2014, it moved an application under Section 23 of the Arbitration Act on",,
16.11.2015 seeking leave to file a counter claim for which it had allegedly reserved its rights in the statement of defence. On 26.05.2016, after hearing",,
the arguments the learned Arbitrator pronounced the order rejecting the application of the petitioner on the ground that there was inexplicable delay in,,
filing the application.Â,,
7. While the arbitration proceedings were pending, the petitioner moved a petition under Section 11(6) of the Arbitration Act on 23.08.2016 before this",,
court being Arb. Pet. No.537/2016. The details of the said petition are not stated in the present petition. A perusal of the order dated 11.04.2017,,
passed by this court, which is attached to the present petition, shows that the plea of the petitioner in the said petition moved under section 11 of the",,
Arbitration Act, was that the sole arbitrator had to be project In-charge and that Mr.Narsingh sole arbitrator appointed by the respondent was no",,
longer the project In-charge and could not continue. Hence, termination of the mandate of the Arbitrator was sought. The petitioner earlier had filed",,
an application under sections 12 and 13 of the Arbitration Act before the learned arbitrator which was dismissed. Hence, the new petition under",,
Section 11(6) of the Act. As a response to the petition, the respondent on 21.08.2016 appointed Sh.Ramesh Kher, one of its General Manager as the",,
new arbitrator in place of Mr.Narsingh. This petition was disposed of on 11.04.2017. This court held that in view of the arbitration clause i.e. Clause,,
56 of the General Conditions of Contract, the amended arbitration Act would be applicable. Hence in view of section 12(5) of the Arbitration Act,",,
Mr.Ramesh Kher being a serving General Manager of the respondent Company would be disqualified to be an arbitrator. It was in these facts, the",,
petition was allowed and the relief was granted to the petitioner.  Vide order dated 11.04.2017 Hon‟ble Mr.Justice G.S.Singhvi, Retired Judge,",,
Supreme Court was appointed as the sole arbitrator.,,
8. In the meantime while the petition under Section 11(6) of the Act was pending before this court, on 06.01.2017 by a communication addressed to",,
the respondent, the petitioner again sought adjudication of more disputes by way of arbitration for its losses/damages amounting to Rs.118.27 crores. It",,
is the grievance of the petitioner that despite receipt of this invocation request dated 06.01.2017, the respondent has failed to appoint a sole",,
arbitrator in terms of Clause 56 of the agreement. Hence, the present petition.",,
9. The respondent have opposed the present petition and have filed their reply. It has been pleaded in the reply that during the subsistence of the,,
agreement, as disputes arose between the parties the petitioner invoked the arbitration Clause on 01.03.2013 i.e. the first invocation requesting the",,
Appointing Authority to refer the disputes to arbitration. Accordingly, Mr.Narsingh was appointed as the Sole Arbitrator. The petitioner filed its claim",,
in the said arbitration proceeding which was numbed as Arb. Case No. 1/2013 by the learned arbitrator. Again, the petitioner issued a letter dated",,
28.08.2013 being a second invocation addressed to the respondent where the petitioner made various allegations and gave various reasons for the,,
work being incomplete. Further, claims were also made regarding outstanding amounts being due. The petitioner again requested the Authority to refer",,
the further disputes to the Sole Arbitrator. It is stated that the Appointing Authority again referred all the disputes raised by the petitioner to the Sole,,
Arbitrator-Sh.Narsingh on 16.09.2013. This was the second reference to Arbitration on the request of the petitioner. The Sole Arbitrator permitted the,,
petitioner to file an additional statement of claim by 15.10.2013 vide its communication dated 28.09.2013. It is pleaded that despite reference of the,,
S.No.,Description,Amount (Rs.)
1,Para 3 Blasting WorksÂ,"27,28,26,000
2.,Para 5 Excavation Works,"86,00,000
3.,Para 5 Soil Works,"44,04,000
4.,Boundary Wall ExcavationÂ,"9,00,000
5.,TD-7&8 Excavation,"17,85,500
6.,Kheri Road Drain Excavation,"1,25,000
7.,Porta Cabin (FOA),"16,00,000
8.,Porta Cabin Electrical,"4,50,000
9.,Reservoir Earth Work,"23,00,000
been sought be raised. The additional claims are explained as follows:-,,
“Further, on the basis of the aforesaid termination, which in the view of the Contractor was totally illegal in the given facts and circumstances and",,
the terms of the Contract, M/s. MUNPL encashed three Bank Guarantees of the Contractor, cumulatively amounting to Rs.13,03,57,106/- on",,
21.01.2014, thereby, committing further illegality, apart from inflicting huge losses to the Contractor and the same was in addition to the non-payment",,
of the pending/outstanding amounts of the Contractor, which were overdue against the work done, and the costs incurred by the Contract in the",,
Extended Period of the Contract till the date of termination that have not been paid till date.,,
Needless to say that the Contractor also suffered loss of profits due to the said illegal termination of the Contract, as at the time of the illegal",,
termination, the Contractor had executed work of approximately Rs. 85,17,29,665/- of billed works and unbilled executed value of works amounting to",,
Rs.1,69,54,461/- (excluding other pending payments for different items as summarized later in this submission) out of a total Contract Price of",,
Rs.137,21,75,327/-. Therefore, Contractor suffered loss of profits @ 10% in the balance Contract value of Rs.50,34,91,201/- along with interest",,
accrued thereon @ 18%/annum, calculated from the date if illegal termination of the Contract. It may be noted that unbilled amount equivalent of",,
works executed remains unpaid to the Contractor till date and, therefore, the Contractor is also entitled to interest @ 18% from the date of termination",,
till the realization of the same. Please note that the interest shall also accrue on the unbilled value of the works so executed by the Contractor.,,
Further, the Contractor suffered loss of interest due to the encashment of the Bank Guarantees @ 18% of the total encashed amount of Rs.",,
13,03,57,106/- from the date of encashment; please note that the same is in addition to the refund of the encashed amount as principal. Additionally,",,
LD illegally retained by M/s.MUNPL, amounting to Rs.2,24,52,847/-, is also liable to be returned to the Contract with interest @ 18%/annum from the",,
date, first demand for the same was made.â€",,
19. The above claims are further elaborated in Exhibit 1 and Annexure 1 to Annexure 9 to the above communication. It is claimed that substantial part,,
of this claim arises subsequent to the termination of the contract by the respondent on 17.01.2014.,,
20. It is clear from the perusal of the above two invocation letters, namely, the second invocation dated 28.08.2013 and the third invocation dated",,
06.01.2017 that there is some overlapping in the claims raised in the two communications. The commonality between the two invocations relates to,,
claims 2 to 9 as described above which form part of the second invocation dated 28.08.2013. Other than this overlapping, there is no commonality",,
between the two invocations. In fact, the bulk of the claims which are sought to be raised by the third invocation letter dated 06.01.2017 as noted",,
above arise after termination of the contract on 17.01.2014 and could not have been raised along with the second invocation. Hence, to that extent the",,
submission of the learned counsel for the respondent cannot be accepted that the two invocations deal with the same set of claims. It cannot be said,,
that all the disputes raised in the third invocation dated 06.01.2017 stand referred to arbitration.,,
21. The next contention that was strongly raised by the respondent is the issue of res-judicata/constructive res-judicata/Order 2 Rule 2 CPC. It has,,
been pleaded that when Mr.Narsingh was appointed as the Sole Arbitrator and he was hearing the Arb. Case. No. 1/2014 which was the case,,
initiated by the respondent, the petitioner while filing its statement of defence on 23.08.2014 had reserved its right to file a counter claim. Thereafter",,
after a delay of more than 1 year, it moved an application under Section 23 of the Arbitration Act seeking leave to the learned Arbitrator to file a",,
counter claim. This plea was rejected on 26.05.2016.,,
Further pursuant to the second invocation dated 28.08.2013, the matter was referred to the learned Sole Arbitrator Sh. Narsingh. Despite opportunity",,
granted by the learned Arbitrator, no claim petition was filed.",,
In view of the above two events, it is pleaded that the claim of the petitioner is barred by res-judicata/constructive res-judicata/Order 2 Rule 2 CPC.",,
22. For the reasons stated herein below, I do not propose to go into the merits of the above contentions raised by the learned counsel for the",,
respondent. It would be appropriate that these issues are decided by the learned Arbitrator. I may only note that in the two arbitration proceedings that,,
had commenced which the former learned Arbitrator-Sh. Narsingh had marked as Arb. Case. No. 1/2013 and Arb. Case. No. 1/2014, the Award has",,
not been passed.,,
23. I may also note that this court in its order dated 11.04.2017 in Arb. Pet. No. 537/2016 which was filed by the petitioner under Section 11(6) of the,,
Arbitration Act/also reported as Ratna Infrastructure Projects Pvt. Ltd v. Meja Urja Nigam Pvt. Ltd. (MUNPL), 2017 SCC OnLine Delhi 7808",,
had noted that in terms of the arbitration Clause, it would be the Amended Arbitration Act as amended  w.e.f. 24.10.2015 that would apply to the",,
present petition. This court had accordingly, terminated the mandate of the Arbitrator appointed by the respondent as he was an employee of the",,
respondent and had appointed Justice G.S.Singhvi (Retd.) as the Sole Arbitrator to adjudicate the disputes between the parties.Â,,
24. As the Amended Arbitration Act is what is applicable, reference may be had to Section 11(6-A) of the Arbitration Act. The same reads as",,
follows:-,,
xxx",,
6-A The Supreme Court or, as the case may be, the High Court, while considering any application under sub-section (4) or subsection (5) or sub-",,
section (6), shall, notwithstanding any judgment, decree or order of any court, confine to the examination of the existence of an arbitration agreement.",,
xxx""",,
25. Reference may also be had to the judgment of the Supreme Court in Duro Felguera, S.A. vs. Gangavaram Port Ltd., (2017) 9 SCC 729 where the",,
Supreme Court held as follows:-,,
58. This position was further clarified in National Insurance Company Limited v. Boghara Polyfab Private Limited To quote (SCC p.283, para 22):",,
“22. Where the intervention of the court is sought for appointment of an Arbitral Tribunal under Section 11, the duty of the Chief Justice or his",,
designate is defined in SBP & Co. This Court identified and segregated the preliminary issues that may arise for consideration in an application under,,
Section 11 of the Act into three categories, that is, (i) issues which the Chief Justice or his designate is bound to decide; (ii) issues which he can also",,
decide, that is, issues which he may choose to decide; and (iii) issues which should be left to the Arbitral Tribunal to decide.",,
22.1. The issues (first category) which the Chief Justice/his designate will have to decide are:,,
(a) Whether the party making the application has approached the appropriate High Court.,,
(b) Whether there is an arbitration agreement and whether the party who has applied under Section 11of the Act, is a party to such an agreement.",,
22.2. The issues (second category) which the Chief Justice/his designate may choose to decide (or leave them to the decision of the Arbitral Tribunal),,
are:,,
(a) Whether the claim is a dead (long-barred) claim or a live claim.,,
(b) Whether the parties have concluded the contract/transaction by recording satisfaction of their mutual rights and obligation or by receiving the final,,
payment without objection.,,
22.3. The issues (third category) which the Chief Justice/his designate should leave exclusively to the Arbitral Tribunal are:,,
(i) Whether a claim made falls within the arbitration clause (as for example, a matter which is reserved for final decision of a departmental authority",,
and excepted or excluded from arbitration).,,
(ii) Merits or any claim involved in the arbitration.â€,,
59. The scope of the power under Section 11(6) of the 1996 Act was considerably wide in view of the decisions in SBP and Co. [SBP and Co. v.,,
Patel Engg. Ltd., (2005) 8 SCC 618] and Boghara Polyfab [National Insurance Co. Ltd. v. Boghara Polyfab (P) Ltd., (2009) 1 SCC 267 : (2009) 1",,
SCC (Civ) 117] . This position continued till the amendment brought about in 2015. After the amendment, all that the courts need to see is whether an",,
arbitration agreement existsâ€"nothing more, nothing less. The legislative policy and purpose is essentially to minimise the Court's intervention at the",,
stage of appointing the arbitrator and this intention as incorporated in Section 11(6-A) ought to be respected.""",,
26. Hence, while considering an application under Section 11(6) of the Arbitration Act, the court shall confine itself to the examination of the existence",,
of an arbitration agreement only.,,
27. The pleas which are now strongly urged, namely, of resjudicata/constructive res-judicata and limitation are issues which the respondent may raise",,
before the learned Arbitrator as noted above. In view of Section 11(6A) of the Act, this court has to confine its examination to the existence of an",,
arbitration agreement. As the arbitration agreement undoubtedly exists, it would be appropriate to refer the parties to arbitration. 28. In the course of",,
hearing on 10.07.2018, I was informed that the proceedings are still pending before the learned Arbitrator appointed by this court by its order dated",,
11.04.2017 in Arb. Pet. No. 537/2016. Accordingly, I appoint Justice G.S. Singhvi (Retd.), Former Judge of the Supreme Court as the Sole",,
Arbitrator to adjudicate the disputes between the parties. He shall be free to fix his fees in consultation with the parties.,,
29. The parties are free to raise all their pleas before the learned Arbitrator as per law.,,
30. Petition stands accordingly disposed of.,,
