SHIVAM BUILD CON ASSOCIATES TH SHAILANDER VAID vs UNION OF INDIA TH CHIEF ENGINEER PROJECT BEACON 56 APO AND OTHERS

Court
Jammu and Kashmir High Court

HIGH COURT OF JAMMU & KASHMIR AND LADAKH
AT JAMMU

Arb P No. 20/2025

Pronounced on: 05.06.2026
Uploaded on: 05.06.2026

Whether the operative part or full
judgment is pronounced: Full

Shivam Build Con Associates

…. Petitioner/Appellant(s)
Through:- Mr. K.D.S. Kotwal, Advocate.

V/s


…..Respondent(s)
Union of India and others

Through:- Mr. Vishal Sharma, DSGI.


CORAM: HON’BLE MRS. JUSTICE SINDHU SHARMA, JUDGE

JUDGMENT



1. The present petition has been filed under Section 11(6) of the Arbitration
and Conciliation Act, 1996 seeking appointment of an Arbitrator.
2. The petitioner, a proprietorship concern, which is in the business of
construction of roads in the UT of J&K, was awarded a contractor
bearing No. CE(P) BCN/01/2023-24 for providing, laying and
compaction (with sensor paver) of readymade bituminous (HMP) mix for
Bituminous Macadam (BM) 50 mm thick (compacted), Bituminous
Concrete (BC) 40 mm thick (compacted), including road marking with
thermoplastic paint for resurfacing works between Km 0.00 to Km 10.00
(9.44 EQVT CL-9) on road Patnitop-Nathatop under 52 RCC Sector/760
BRTF Project Beacon in J&K UT.
3. The contract was alloted to the petitioner on 12.04.2023 and the total
value of the contract was fixed at Rs.2,44,10,600/-. Thereafter, the formal
work order was issued on 18.04.2023 and R.P. Gupta, AE (Civil), was
appointed as Engineer In-charge.

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4. The contention of the petitioner is that he mobilized the machinery
and visited the site, but the work remained suspended from 02.05.2023
till 31.05.2023 which resulted in losses to the petitioner. Thereafter, the
petitioner on 01.06.2023 requested the respondents to allow the petitioner
to resume the work as every day was causing financial loss to the
petitioner. The work remained suspended for 29 days till 29.06.2023.
Thereafter, the petitioner was informed that the work had been reduced
from the original amount of Rs.2,44,10,600/- to Rs.1,50,00,000/-. The
said work was accepted by the petitioner and completed within time.
5. The petitioner submitted his claim for reimbursement of the losses
suffered by him and sought release of the same by virtue of
communication dated 13.08.2024. The respondents did not respond to the
claim of the petitioner. This constrained the petitioner to invoke the
arbitration clause of the contract by virtue of communication dated
13.12.2024. It is submitted that despite service of the aforesaid notice, the
respondents have failed to act and direct the appointment of an Arbitrator.
6. Pursuant to the notice issued by this Court, the respondents have
caused appearance and filed their response.
7. In the reply filed by the respondents, allotment of the contract to the
petitioner has been admitted. It has also been admitted that the contract
was suspended for some period due to inclement weather conditions and
subsequently the amount was also reduced due to non-availability of
funds. The respondents submit that the petitioner agreed and submitted his
willingness to execute the work at the approved rates and the work was
completed. The petitioner had, in fact, also accepted the final bill. The

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notice for appointment of arbitrator was received by the respondents, who
vide their reply dated 26.12.2024 stated that in terms of Condition 70 of
the General Conditions of Contract, all disputes are to be referred to the
sole arbitration of an Engineer Officer to be appointed by the authority.
8. The execution of the contract is not in dispute. The contract provides
for resolution of disputes by reference of the same to arbitration. Clause
70 of the contract reads as under:
“70. Arbitration- All disputes, between the parties to the Contract(other
than those for which the decision of the C.W.E. or any other person is by
the Contract expressed to be final and binding) shall, after written notice
by either party to the Contract to the other of them, be referred to the sole
arbitration of an Engineer officer to be appointed by the authority
mentioned in the tender documents.
Unless both parties agree in writing such reference shall not take
place until after the completion or alleged completion of the Work
or termination or determination of the Contract under Condition
Nos. 55, 56 and 57 hereof.
Provided that in the event of abandonment of the Works or
cancellation of the Contract under Condition Nos. 52, 53 or 54
hereof, such reference shall not take place until alternative
arrangements have been finalized by the Government to get the
Works completed by or through any other Contractor or
Contractors or Agency or Agencies.
Provided always that commencement or continuance of any
arbitration proceeding hereunder or otherwise shall not in any
manner militate against the Government’s right of recovery from
the contractor as provided in Condition 67 hereof.
If the Arbitrator so appointed resigns his appointment or vacates
his office or is unable or unwilling to act due to any reason
whatsoever, the authority appointing him may appoint a new
Arbitrator to act in his place.
The Arbitrator shall be deemed to have entered on the reference on
the date he issues notice to both the parties, asking them to submit to
him their statement of the case and pleadings in defence.

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The Arbitrator may proceed with the arbitration, ex parte, if either
party, inspite of a notice from the Arbitrator fails to take part in
the proceedings.
The Arbitrator may, from time to time with the consent of the
parties, enlarge, the time upto but not exceeding one year from
the date of his entering on the reference, for making and
publishing the award.
The Arbitrator shall give his award within a period of six months
from the date of his entering on the reference or within the
extended time as the case may be on all matters referred to him
and shall indicate his findings, along with sums awarded,
separately on each individual item of dispute.
The venue of Arbitration shall be such place or places as may be
fixed by the Arbitrator in his sole discretion.
The award of the Arbitrator shall be final and binding on both
parties to the Contract.”

9. The respondents, by their own communication dated 26.12.2024,
requested the petitioner to furnish the agreement in the prescribed format
for appointment of an Arbitrator. The existence of the arbitration clause,
as noticed hereinabove, and its invocation by the petitioner vide notice
dated 13.12.2024 are not disputed. It is also well settled that in terms of
the amendment to the Arbitration and Conciliation Act, 1996, an
employee of one of the parties is ineligible to act as an arbitrator and, as
such, the arbitrator mentioned in the agreement is excluded from being
appointed as arbitrator in terms of the contract.
10. In the given facts and circumstances, coupled with the statements
made at the Bar, the present petition is allowed. Accordingly, with the
consent of learned counsel for the parties, Shri Vinod Gupta, Chief
Engineer (Retired), is appointed as the Sole Arbitrator, who shall proceed
with the matter in accordance with the provisions of the Arbitration and

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Conciliation Act, 1996 and make the award within the time prescribed
under the Act.
11. A copy of this order be communicated by the Registry to the learned
Arbitrator within a period of fifteen days.
12. The parties shall appear before the learned Arbitrator on a date to be
fixed by him. The fee of the learned Arbitrator shall be borne by the
parties, subject to the final award to be passed.




(Sindhu Sharma)
Judge

Jammu:

05.06.2026
Michal Sharma/PS

Whether approved for reporting : Yes/No