Generic Engineering Construction And Projects Ltd vs Maharashtra Maritime Board
- Court
- Bombay High Court
2026:BHC-OS:10778
Neeta Sawant CARBP-1070-2025
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
COMMERCIAL ARBITRATION PETITION NO. 1070 OF 2025
WITH
COMMERCIAL ARBITRATION APPLICATION NO. 675 OF 2025
Generic Engineering Construction
and Projects Ltd. ….. PETITIONER/APPLICANT
: VERSUS :
Maharashtra Maritime Board ….RESPONDENT
Mr. Rohaan Cama with Mr. Chetan Shah, Ms. Farnaaz Karbhari, Mr. Rahul
Jain and Mr. Sharan Shetty i/b HSA Advocates, for the Petitioner /Applicant.
Dr. Birendra Saraf , Senior Advocate with Mr. Jay Sanklecha, Mr.
Harshvardhan Nankani, Mr. Ishwar Nankani, Mr. Huzefa Khokhawala and
Mr. Kartik Gupta i/b Nankani & Associates, for the Respondent.
CORAM : SANDEEP V. MARNE, J.
Reserved On : 10 April 2026.
Pronounced On: 27 April 2026.
JUDGMENT:
1) Commercial Arbitration Application No. 675 of 2025 is filed
under Section 11 of the Arbitration and Conciliation Act, 1996
(Arbitration Act) seeking appointment of Arbitrator for adjudication of
disputes and differences between the parties, which have arisen out of
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Work Order dated 25 January 2023 and Agreement dated 6 February 2023
in relation to construction of office building on Plot No. C-47, Block G in
Bandra Kurla Complex, Mumbai. Commercial Arbitration Petition
No.1070 of 2025 is filed under Section 9 of the Arbitration Act for seeking
interim measures.
2) Petitioner is engaged in the business inter-alia of civil
construction projects. The Respondent/Maharashtra Maritime Board
( MMB ) floated tenders inviting online bids for construction of its office
building on Plot No. C-47, Block G, at Bandra Kurla Complex (BKC),
Mumbai, at estimated work value of Rs.68,18,50,446/-. The Petitioner
participated in the tender process and was declared as a successful bidder.
The Respondent issued Letter of Intent dated 30 September 2022 in
favour of the Petitioner. Thereafter Work Order dated 25 January 2023
was issued and Agreement dated 6 February 2023 was executed between
the Petitioner and Respondent. In terms of the Work Order and the
Agreement, the duration of project was 24 months. Since the work
commenced in February 2023 the same was supposed to be completed by
February 2025. According to the Petitioner, certain disputes arose
between the parties relating to site handover and commencement,
delayed removal of previous contractor’s material, delayed provision of
necessary drawings/approvals, issues relating to obtaining statutory
approvals and commencement certification and stop work notice from
statutory authority, delays in the issuance of various permissions and
NOCs and request for extension of time. The Respondent issued show
cause notice dated 28 July 2025 to the Petitioner alleging breaches of the
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Agreement and calling it upon to explain as to why the contract should
not be terminated. The Petitioner submitted reply dated 3 August 2025.
The Respondent issued order dated 18 August 2025 terminating the Work
Order and the Agreement.
3) The Petitioner invoked Clause 25 of Section 3 of Conditions
of Contract and suggested a name to be appointed as Dispute Review
Expert. However, the Respondent did not respond to the requisition sent
by the Petitioner. The Petitioner accordingly issued notice dated 11
September 2025 under Section 21 of the Arbitration Act suggesting the
name of the Arbitrator.
4)
The Petitioner filed Commercial Arbitration Petition No.1070
of 2025 under Section 9 of the Arbitration Act, seeking stay of
termination order dated 18 August 2025. The Respondent issued fresh e-
tender dated 9 October 2025 for completion of the project. The Petitioner
accordingly amended Section 9 Petition and sought stay in respect of
fresh e-tender dated 9 October 2025. The Respondent issued Work Order
dated 20 January 2026 to Akshaya Infra Projects Pvt. Ltd. and ShrijiKrupa
Projects Ltd. (JV) for completion of the balance work.
5) In the meantime, the Petitioner has filed Commercial
Arbitration Application No.675 of 2025 for appointment of Arbitrator
under Section 11 of the Arbitration Act. The Respondent have filed
affidavit-in-reply in both the proceedings. The Petition under Section 9 as
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well as Application under Section 11 of the Arbitration Act are taken up
for analogous hearing.
6) At the very outset, Mr. Cama, the learned counsel appearing
for the Petitioner has fairly submitted that if Arbitral Tribunal is
constituted in Section 11 Application, the Petitioner shall exercise the
remedy under Section 17 of the Arbitration Act before the Arbitral
Tribunal for seeking interim measures in the Application. However, Dr.
Saraf, the learned Senior Advocate appearing for the Respondent has
strenuously opposed Application under Section 11 of the Arbitration Act.
Accordingly, I have heard extensive submissions canvassed by the learned
counsel appearing for the rival parties in Section 11 Application. I
proceed to briefly record their submissions canvassed.
7) Mr. Cama, the learned counsel appearing for the
Petitioner/Applicant submits that there is express agreement to arbitrate
between the parties under Clauses 24 and 25 of the General Conditions of
Contract (GCC) . He submits that Clause 24 of the GCC provides for
reference of dispute to Dispute Review Expert (Board), which has not
been nominated in any manner by the Respondent. That therefore the
Petitioner wrote to the Respondent on 16 August 2025 nominating
Dispute Review Expert and called upon the Respondent to confirm the
suggested name or to nominate any other Expert within a period of seven
days. He submits that Respondent however has failed to nominate
Dispute Review Expert. That in absence of any joint nomination of any
Dispute Review Expert, the Petitioner became entitled to invoke the
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arbitration clause and accordingly notice under Section 21 of the
Arbitration Act was served on 11 September 2025. He further invites my
attention to Clause 3 of the Special Conditions of Contract (SCC) , which
is referred to in Clause 25.3 of the GCC. He submits that though clause 3
refers to arbitration limited to matters concerning design and
methodology of construction, subsequent portion of clause also includes
references to arbitration for disputes relating to and arising out of the
entire contract. Clause 3.4 of SCC is widely worded and takes into its
sweep every dispute arising out of and relating to the contract in
question.
8) Inviting the Court’s attention to Clause 2 of the GCC, Mr. Cama
submits that mere heading of a clause has no significance and that
agreement in the clause has to be gathered from reading of the entire
clause ignoring the heading. He submits that parties have expressly
intended to arbitrate disputes relating to termination of contract, which
is a reason why Clause 3.3 of the SCC is deleted.
9) Mr. Cama further submits that Clause 3 of SCC needs to be read
in conjunction of Clause 25 and that therefore the term ‘engineer’
appearing in Clause 24.1 has to be understood as the ‘Superintending
Engineer’. That decision to terminate the contract is taken by
Superintending Engineer, who has signed the termination letter. He
submits that since Dispute Review Expert has not been appointed, the
Petitioner is entitled to seek appointment of Arbitrator by treating the
decision of the Superintending Engineer as final. He submits that
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intention of parties to arbitrate can clearly be gathered from conjoint
reading of various clauses of the Contract. He further submits that
Executive Engineer has also participated in the termination of the
contract since the show cause notice dated 28 July 2025 was issued by the
Executive Engineer. On the other hand, if the decision to terminate the
contract is actually taken by Chief Engineer, there is no point in leaving
the matter to be decided by any other inferior officer in the hierarchy and
appropriate course of action would be to appoint an Arbitrator. In
support, he relies on judgment of this Court in Quick Heal Technologies
1
Limited Versus. NCS Computech Private Limited and another in which
judgment of the Apex Court in Visa International Limited Versus.
2
Continental Resources (USA) Ltd. is followed. In support of his
contention that Court is empowered to appoint Arbitrator in absence of
Dispute Review Expert, reliance is placed on judgment of Calcutta High
Court in M/S. National Project Construction (NPCCL) Versus. Military
3
Engineer Services (MES) .
10) Mr. Cama also submits that this Court need not decide the
issue of arbitrability conclusively and the same can be left open to be
decided by the Arbitrator. That the present case clearly indicates
arbitration agreement in Clause 25 of GCC and that therefore the Court
may appoint Arbitrator leaving open all objections of Respondent to be
decided under Section 16 of the Arbitration Act. Mr. Cama therefore prays
for appointment of an Arbitrator under Section 11 of Arbitration Act. He
1 2020 SCC Online Bom 687
2 2009 2 SCC 55
3 AP-COM/559/2025 decided on 29 July 2025
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submits that Commercial Arbitration Petition No. 1070 of 2025 be
converted into Application under Section 17 of the Arbitration Act to be
decided by the Arbitral Tribunal.
11) Dr. Saraf, the learned Senior Advocate appearing for the
Respondent opposes Section 11 Application submitting that here is no
arbitration agreement between the parties and that therefore no
reference can be made to arbitration. He submits that Clause 2.3 of GCC
provides for priority in the matter of interpretation of various documents
forming part of contract and according to him, the terms and conditions
of contractor’s bid would have priority over the General Conditions of
Contract including Special Conditions of Contract. He submits that
Clause 36 is a part of contractor’s bid, which provides for mechanism of
decision by Superintending Engineer, appeal before the Chief Engineer
and Second Appeal before the Secretary of the Department. That Clause
36 of contractor’s bid does not provide for resolution of disputes through
arbitration. That if there is any conflict between clause 36 of contractor’s
bid and clauses 24 and 25 of the GCC, the conditions of contractor’s bid
would prevail. He further submits that Section 4 of the Contract
specifically provides that Dispute Review Expert would be as per Clause
36 of Section 1 (Contractor’s Bid) and contests the argument of Petitioner
that no Dispute Review Expert is nominated. He further submits that the
decision to terminate the contract is taken by the Chief Executive Officer
of Respondent and his decision cannot otherwise be made subject matter
of arbitration under Clauses 24 or 25 of the GCC. That under Clause 59 of
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GCC, only the employer himself can terminate the contract, which in the
present case is the CEO of the Respondent.
12) Dr. Saraf further submits that even if it is assumed that
Clauses 24 and 25 GCC constitute arbitration agreement, only the
disputes relating to a decision taken by the ‘engineer’ can be subject to
arbitration. He submits that the word ‘engineer’ appearing in clause 24.1
means the Executive Engineer as per Section 4 of the Contract. That in
the present case, no decision is taken by the engineer. That if the
Superintending Engineer is treated to have taken decision to terminate
the contract, the same would not be a decision of the engineer, capable of
being subject to arbitration. That even if the decision to terminate is
treated to be the one taken by the engineer, only departmental remedies
of appeals before the Chief Engineer and Secretary is all that is agreed
between the parties. That Clause 25.3 of GCC provides for arbitration in
accordance with the procedure stated in the SCC. That Clause 3 of the
SCC provides for merely a decision by the Superintending Engineer. That
GCC are ultimately superseded by the special conditions, which are
specially made applicable to the contract in question. That parties have
consciously deleted clauses 3.1 to 3.3 of the SCC meaning thereby that
there is conscious agreement not to arbitrate the disputes.
13) Dr. Saraf, relies on judgment of this Court in M/s. Mehra &
4
Company Versus. State of Maharashtra . He submits that the
contractual clauses involved in M/s. Mehra & Company (supra) were
4 Arbitration Application No.4/2016 decided on 2 December 2022
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identical to the one involved in the present case. Without prejudice, Dr.
Saraf submits that the Applicant has otherwise not followed the
procedure of filing appeals before the Chief Engineer and Secretary of the
Department. He therefore submits that there is no question of appointing
an arbitrator. Dr. Saraf accordingly prays for dismissal of Section 11
Application. So far as Section 9 petition is concerned, he submits that
since there is no agreement to arbitrate, there is no question of making
any interim measures in the present case. He prays for dismissal of both
the petition under Section 9 and Application under Section 11.
14) Rival contentions urged on behalf of the parties now fall for
my consideration.
15) In these two petitions filed by the Petitioner for appointment
of arbitrator and for seeking interim measures, dispute is raised on behalf
of the Respondent about existence of arbitration agreement and it is
therefore necessary to first take up Section 11 Application (CARAP-675 of
2025) for consideration.
16) The disputes between the parties have arisen out of
performance of contract/agreement dated 6 February 2023, which was
executed for construction of office building of Maharashtra Maritime
Board on Plot No.C-47, Block-G, Bandra Kurla Complex at Mumbai. After
issuing show cause notice dated 28 July 2025, the contract has been
terminated by the Respondent-MMB vide order dated 18 August 2025.
While terminating the Contract, the Respondent-MMB has also sought
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recovery of amount of Rs.7,37,30,023/- and after adjusting the amounts of
the Petitioner available with it, the Board has demanded amount of
Rs.3,00,80,888/- from the Petitioner.
17) Petitioner is aggrieved by termination of its contract and
after initially seeking reference to Dispute Review Expert, it has invoked
arbitration clause by issuing notice dated 11 September 2025 under
Section 21 of the Arbitration Act. Since notice dated 11 September 2025 is
not responded to by the Respondent, the Petitioner has filed the present
application under Section 11 of the Arbitration Act for appointment of an
arbitrator. Respondent disputes that Clause 25.3 of Section 3 of
Conditions of Contract contains arbitration agreement. It would therefore
be necessary to reproduce Clauses 24 and 25 of the Agreement which
reads thus:
24.0 Disputes
24.1 If the Contractor believes that a decision taken by the Engineer was
either outside the authority given to the Engineer by the Contract or
that the decision was wrongly taken, the decision shall be referred to the
Dispute Review Expert within 14 days of the notification of the
Engineer's decision.
25.0 Procedure of Disputes
25.1 The Dispute Review Expert (Board) shall give a decision in writing
within 28 days of receipt of a notification of a dispute.
25.2 The Dispute Review Expert (Board) shall be paid daily at the rate
specified in the Contract Data together with reimbursable expenses of
the types specified in the Contract Data and the cast shall be divided
equally between the Employer and the Contractor, whatever decision is
reached by the Dispute Review Expert. Either party may give notice to
the other to refer decision of the Dispute Review Expert to an Arbitrator
within 28 days of the Dispute Review Expert's written decision. If neither
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party refers the dispute to arbitration within the next 28 days, the
Dispute Review Expert's decision will be final and binding.
25.3 The arbitration shall be conducted in accordance with the
arbitration procedure stated in the Special Conditions of Contract.
18) Thus, under Clause 25.2 of the GCC, the decision of Dispute
Review Expert can be referred by either party to an arbitrator and the
arbitration is required to be conducted in accordance with the arbitration
procedure stated in the SCC. Clauses 25.2 and 25.3 therefore create a clear
prima-facie
impression about existence of arbitration agreement between
the parties. However, the Respondent has contended that the present
dispute relating to termination of contract is not agreed to be referred to
arbitration by the parties. Therefore, though Clauses 25.2 and 25.3 of GCC
do envisage resolution of disputes through arbitration, this Court is
required to examine, in the context of various other clauses of the
contract, as to whether the dispute, which has arisen due to termination
of contract, can be referred to arbitration or not. It would therefore be
necessary to consider various other clauses of the agreement. The
Agreement dated 6 February 2023 is just a two-page document and Clause
4 thereof provides thus :
4. The following documents shall be deemed to form and be ready
construed as part of this agreement viz.
i) Work Order
ii) Site Handover Letter
iii) Contractor's Bid
iv) Condition of contract: General and Special
v) Contract Date
vi) Additional condition
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vii) Drawings
viii) Bill of Quantities and
ix) Any other documents listed in the Contract Data as forming part of
the Contract
19)
Thus, the documents enumerated in Clause 4 of the
Agreement forms part of the contract between the parties, which includes
inter-alia contractors bid and conditions of contract, both general and
special. Section 1 of the bid documents contain instructions to bidders
and Clause 36 of Section 1 provides for Dispute Review Expert and it reads
thus:
36.0 Dispute Review Expert
36.1 Except where otherwise specified in the contract and subject to the
powers delegated to him by Government under the code, rules then in
the force, the decision of the Superintending Engineer of the Circle for
the time being shall be final, conclusive and binding on all parties of the
contract upon all questions relating to the meaning of the specifications,
designs, drawings and instruction hereinbefore mentioned and as to the
quality of workmanship or materials used on the work, or as to any other
question, claim right, matter or things whatsoever, if any way arising out
of, or relating to the contract, designs, drawings, specifications,
estimates, instructions, orders, or other conditions, or 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.
36.2 The Contractor may within thirty days of receipt by him of any
order passed by the Superintending Engineer of the Circle as aforesaid
appeal against it to the Chief Engineer. concerned with the contract
work or project provided that -
(a) The accepted value of the contract exceeds Rs. 10 lakhs (Rupees Ten
lakhs)
(b) Amount of claim is not less than Rs. 1,00,000 (Rupees one lakh)
36.3 If the Contractor is not satisfied with the order passed by the Chief
Engineer as aforesaid, the Contractor may, within thirty days of receipt
by him of any such order appeal against it to the concerned Secretary,
Public Works Department/Irrigation Department who, if convinced that
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Prima-facie the Contractors claim rejected by Superintending
Engineer/Chief Engineer is not frivolous and that there is some
substance in the claim of the Contractor as would merit a detailed
examination and decision by the Standing Committee, shall put up to
the Standing Committee at Government level for suitable decision.
20) Section 3 of the bid document contains conditions of contract
and part (a) thereof deals with GCC. Clauses 24 and 25 of the GCC have
already been reproduced above. Part (f) of Section 3 contains SCC and
under clause 3, thereof parties have agreed as under:
3. ARBITRATION (Limited to Design & Methodology of construction
only)
3.1The Employer proposes that [name of proposed Dispute Review
Expert as indicated in Appendix] be appointed-as-Dispute-Review-
3.2 For-works-costing-above Rs 5 crore the-procedure-for-arbitration
will be as per GR-of-Law & Judiciary Department issued vide-Sankim
2016/CR 20/ Ka-19 dt 13/10/2016-regarding Institutional Arbitration-
Policy"
3.3 The Arbitration Clause does not applicable for termination of
contract.
3.4 Except where otherwise specified in the contract and subject to the
powers delegated to him by Government under the code, rules then in
the force, the decision of the Superintending Engineer of the Circle for
the time being shall be final, conclusive and binding on all parties of the
contract upon all questions relating to the meaning of the specifications,
designs, drawings and instruction hereinbefore mentioned and as to the
quality of workmanship or materials used on the work, or as to any other
question, claim right, matter or things whatsoever, if any way arising out
of, or relating to the contract, designs, drawings, specifications,
estimates, instructions, orders, or other conditions, or
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.
3.5. The Contractor may within thirty days of receipt by him of any order
passed by the Superintending Engineer of the Circle as aforesaid appeal
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against it to the Chief Engineer, concerned with the contract work or
project provided that-
(a) The accepted value of the contract exceeds Rs. 10 lakhs (Rupees Ten
lakhs)
(b) Amount of claim is not less than Rs. 1.00 Lakh (Rupees One Lakh).
3.6. If the Contractor is not satisfied with the order passed by the Chief
Engineer as aforesaid, the Contractor may, within thirty days of receipt
by him of any such order appeal against it to the concerned Secretary,
Public Works Department/Irrigation Department who, if convinced that
Prima-facie the Contractors claim rejected by Superintending
Engineer/Chief Engineer is not frivolous and that there is some
substance in the claim of the Contractor as would merit a detailed
examination and decision by the Standing Committee, shall put up to
the Standing Committee at Government level for suitable decision (Vide
PW Circular No. CAT-1086-CR-110/Bldg.2 Dated 7.5.1986).
21) Under clause 2 of the GCC, order of priority for interpreting
the documents forming contract is agreed upon and clause 2.3 reads thus:
2.3. The documents forming the Contract shall be interpreted in the
following order of priority
(1) Agreement
(2) Letter of Acceptance, notice to proceed with the works
(3) Contractor's Bid
(4) Contract Data
(5) Conditions of Contract including Special Conditions of Contract
(6) Specifications
(7) Drawings
(8) Bill of quantities and
(9) any other document listed in the Contract Data as forming part of the
Contract.
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22) Relying on clause 2.3 of the GCC, it is contended on behalf of
the Respondent-Board that Clause 36 of the contractor’s bid would
prevail over General or Special Conditions of Contract. Under Clause 36 of
the contractor’s bid, parties agreed that decision of Superintending
Engineer of the Circle would be final, conclusive and binding on parties
and that contractor can appeal before the Chief Engineer if the accepted
value of contract exceeds Rs.10 lakhs and amount of claim is not less than
Rs.1 lakhs. If the contractor is still not satisfied with the order passed by
the Chief Engineer, there is further provision of appeal before the
Secretary of the Department. Thus, Clause 36 of contractor’s bid talks of
only internal dispute resolution mechanism. As against this, Clauses 24
and 25 of the GCC specifically provide for resolution of disputes through
qua
arbitration. Thus, the arbitration agreement, there is no conflict
between clause 36 of contractor’s bid and clause 25 of the GCC. Therefore,
it is not necessary to go into the issue of order of priority and reliance by
the Respondents on clause 2.3 of GCC providing for order of priority in
interpreting contract documents is misplaced.
23) Coming to clauses 24 and 25 of the GCC, it is sought to be
contended by the Respondent that only a decision taken by the ‘engineer’,
which is further reviewable by the Dispute Review Expert, can be referred
to arbitration. Under Clause 24, a decision taken by the ‘engineer’ with
which contractor is aggrieved, can be referred to Dispute Review Expert.
Though it is sought to be contended by the Petitioner that no Dispute
Review Expert is nominated/appointed, Section 4 of the contract provides
that the Dispute Review Expert appointed jointly by employer and
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contractor would be as per Clause 1.1 of Section 3 or Clause 36 of Section
1. Under Clause 1.1 of Section 3 the term ‘adjudicator’ which is
synonymous with ‘Dispute Review Expert’ is defined to mean as under :
The Adjudicator (synonymous with Dispute Review Expert) is the person
appointed jointly by the Employer and the Contractor to resolve disputes
in the first instance, as provided for in Clauses 24 and 25 (Section 3). The
name of the Adjudicator is defined in the Contract Data. Bill of
Quantities means the priced and completed Bill of Quantities forming
part of the Bid.
24) Thus, Dispute Review Expert is to be appointed jointly by the
employer and contractor to resolve the disputes as provided for in clauses
24 and 25 of GCC and it is provided that the name of the adjudicator is
defined in the contract data (Section 4). Thus, Clause 1.1 of Section 3, by
itself, does not clarify as to who exactly is the Dispute Review Expert.
That takes us to clause 36 of Section 1, which is already reproduced
above, and which does not seek to nominate the Dispute Review Expert in
any manner. Clause 36 only provides for decision of Superintending
Engineer shall be final and can be appealed before the Chief Engineer and
Secretary of the Department. Again, the Second Appeal is provided before
the Secretary Public Works Department/Irrigation Department. It is not
very clear whether Secretary of the Public Works Department or Irrigation
Department can decide an appeal against decision of Chief Executive
Officer of the Maharashtra Maritime Board. Therefore, it is difficult to
conclude that any Dispute Review Expert is nominated mutually by the
parties. The hierarchical departmental remedies for challenging decision
of Superintending Engineer cannot be treated as ‘Dispute Review Expert’
within the meaning of Clauses 24 and 25 of the GCC. Faced with this
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difficulty, the Petitioner sought to nominate Dispute Review Expert vide
notice dated 16 August 2025 and sought concurrence of the Respondent
or in the alternative suggested nomination of any other Dispute Review
Expert. This is clear from the following portion of notice dated 16 August
2025 :
However, since there is no named person in the Contract Data and in
terms of Clause 24.1 of the Section 3-Condition of Contract under the
Work Order, we call upon you to appoint a Dispute Review Expert / we
hereby nominate Mr. Jayesh Rawal to be appointed as the Dispute
Review Expert.
You are requested to confirm the name or suggest an Expert within a
period of 7 days from the date of receipt of the present notice.
25) Respondent did not reply to the notice dated 16 August 2025
indicating that the so-called mechanism of internal appeals before the
Chief Engineer and Secretary under Clause 36 of contractors bid was the
Dispute Review Expert available for the Petitioner. Instead, Respondent
chose to maintain silence and created an impression as if no Dispute
Review Expert was available. After waiting for some time, the Petitioner
was left with no other alternative but to invoke arbitration as per Clause
25 vide notice dated 11 September 2025. Even after receipt of that notice,
Respondent chose to maintain silence and did not dispute existence of
arbitration agreement nor suggested to the Petitioner that Dispute
Review Expert was available.
26) This takes me to another objection sought to be raised by the
Respondent that only a decision taken by the ‘engineer’ is capable of
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being referred to arbitration. Reliance is placed on Section 4 ‘Contract
Data’ under which the term ‘Engineer’ is defined as under:
The Engineer is Executive Engineer, Maharashtra Maritime Board,
Mumbai 2nd floor, Indian Mercantile Chambers, Ramjibliai Kamani
Road, Ballard Estate, Fort, Mumbai 400 001.
27) It is therefore contended by the Respondent that only
decision of Executive Engineer was capable of being referred to
arbitration, that too, after decision of reference by Dispute Review Expert.
In the present case, the show cause notice was issued by the Executive
Engineer, Maharashtra Maritime Board on 28 July 2025. Petitioner
responded to the show cause notice on 3 August 2025 by addressing the
response to the Executive Engineer. It is Respondent’s own case that
decision to terminate the contracts is taken by the Chief Executive Officer
and that the same is merely communicated by the Superintending
Engineer. Thus, though Executive Engineer issued the show cause notice,
termination letter dated 18 August 2025 is signed and addressed by the
Superintending Engineer, Maharashtra Maritime Board, Mumbai.
However, it is the case of the Respondent that the Superintending
Engineer is not capable of taking a decision to terminate the contract and
that the same can only be taken only by the employer itself, which, in the
present case, is the CEO. Reliance is placed on Clause 59.1 of the
Contract which reads thus:
59.1 The Employer or the Contractor may terminate the Contract if the
other party causes a fundamental breach of the Contract.
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28) If Respondent’s contention is accepted that only Engineer’s
decision can be referred to arbitration ( after decision of reference by
Dispute Review Expert) it would mean that no decision relating to
termination can ever be referred to arbitration. This is because, it is
Respondent's own case that decision to terminate the contract cannot be
taken by the Executive Engineer and is always taken by the CEO.
However, if clause 3.3 of the SCC is considered, the same deletes the
condition for non-reference of dispute relating to termination of contract.
Thus, there is a conscious deletion of clause for not making reference to
arbitration relating to termination of contract. Thus, the deleted Clause
3.3 of SCC renders the contention raised by the Respondent about
impermissibility to make reference to arbitration in relation to
termination decision taken by CEO is completely misplaced. If decision to
terminate can only be taken by the CEO and if decision of CEO is
otherwise non-arbitrable ( since it is not taken by the ‘engineer’ ), there was
no necessity to delete clause 3.3 of the SCC. On the other hand, deletion
of clause 3.3 of SCC creates an impression that parties have agreed to
arbitrate the decision relating to termination of contract.
29) It is also sought to be suggested on behalf of the Respondent
that GCC are mere conditions of contract which are general in nature and
that SCC contain conditions which are specific to the contract in
question. It is therefore sought to be contended that SCC would prevail
over GCC. I am unable to accept this contention in view of clause 23 of
GCC relied upon by the Respondents themselves, which does not give any
special priority to SCC over the GCC. Both GCC and SCC contain same
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priority as compared to other contractual stipulations. Even otherwise,
clause 25 of the GCC needs to be read harmoniously with clause 3 of the
SCC. Clause 25.3 of GCC makes a specific reference to the procedure
prescribed in the SCC. Therefore, when it comes to determining existence
of arbitration agreement, reference to SCC is necessary only for
determining the arbitration procedure and nothing more. The arbitration
agreement is in clause 25 of the GCC and if arbitration procedure is to be
considered, reference to clause 3 of the SCC may become necessary.
Therefore, clause 3 of the SCC does not determine whether parties have
agreed for arbitration or not. Parties have undoubtedly agreed for
arbitration under clause 25.2 of the GCC. Deletion of clauses 3.1 to 3.3 of
the SCC would only mean that no specific arbitration procedure is agreed
between the parties. Deletion of Clauses 3.1 to 3.3 of the SCC would not
mean that arbitration agreement in clause 25.2 of the GCC would get
wiped off.
30) It is also sought to be contended on behalf of the Respondent
that clauses 3.4 to 3.6 of SCC again puts back parties to internal dispute
resolution mechanism of filing appeal to Chief Engineer and Secretary. I
am unable to agree. Clause 3 of the SCC may have relevance to only
procedure agreed for arbitration. Clauses 3.4 to 3.6 ( which are merely
reproduction of clause 36 ) do not prescribe any arbitration procedure
contemplated under clause 25.3 of the GCC. Therefore, for interpreting
clause 25 providing for arbitration, clause 3 of the SCC does not provide
any real assistance. At the highest, it can be contended that if a
Superintending Engineer has taken a decision, the same is final subject to
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appeals before the Chief Engineer and Secretary. This would mean that
the Contractor may have to exhaust internal departmental remedies
before the Chief Engineer and Secretary ( which according to the
Respondent is the Dispute Review Expert) and thereafter seek reference to
arbitration. In the present case, however the decision is not taken by the
Superintending Engineer which can be appealed before the Chief
Engineer. CEO carries designation higher than the Chief Engineer.
Therefore, the Chief Engineer cannot decide Appeal over the CEO’s
decision. Therefore, even if clauses 3.4 to 3.6 of the SCC are read to mean
prescription of mandatory per-arbitration procedure, the same are clearly
inapplicable to the present case.
31)
In my view, therefore holistic reading of various clauses of
the contract clearly creates an impression that parties have agreed for
resolution of disputes even relating to termination of contract through
arbitration. Petitioner has relied upon judgment of Calcutta High Court in
M/S. National Project Construction (NPCCL) (supra) which also
contemplated decision by Dispute Resolution Board before reference to
arbitration. The Calcutta High Court held that Clause 28 of the contract
providing for dispute resolution through Dispute Resolution Board could
not be treated as mandatory. The Court further held that no useful
purpose would be served by relegating the matter to Dispute Resolution
Board which comprised of officers of MES. It was further observed that
decision to cancel the contract was taken before the constitution of the
Dispute Resolution Board and before communicating the composition of
Dispute Resolution Board to the Petitioner therein. In the present case,
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even if Dispute Review Expert is treated to be in hierarchical level of
Superintending Engineer, Chief Engineer and Secretary, the same is not
available in relation to decision taken by the Chief Executive Officer.
Therefore, there is no per-arbitration procedure, which is applicable in
the present case, without following of which, reference to arbitration
cannot be made.
32) Mr. Cama also relied upon judgments of the Apex court in
Visa International Limited (supra) and of this Court in Quick Heal
Technologies (supra) in which it has been held that if correspondence
between the parties make it abundantly clear that settlement was not
possible, the condition in the contract providing for arbitration of only
which cannot be settled amicably shall be finally settled in
those disputes ‘
accordance with the 1996 Act ’ would not come in the way of appointment
of Arbitrator. In the present case also, this Court is satisfied that decision
by Dispute Review Expert is not possible on account of decision of
termination of contract being taken by Chief Executive Officer.
Therefore, there is no per-arbitration procedure available for the
Petitioner which he must exhaust before seeking appointment of
Arbitrator.
33) Reliance by Dr. Saraf on judgment of this Court in M/s.
Mehra & Company is inapposite. Though contractual clauses in case
before this Court in M/s. Mehra & Company appear to be similar to
clause 36 of contractor’s bid and clauses 3.4 to 3.6 of the SCC, it appears
that there was no separate arbitration agreement/clause in case before
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this Court in M/s. Mehra & Company. This Court relied upon its
judgment in B.T. Patil Construction Versus. Maharashtra Krishna
5
Valley Development Corporation, ( which also contained similar clauses)
and this Court held that the clauses quoted therein did not contain
arbitration agreement. The case in M/s. Mehra & Company and B.T.
Patil Construction (supra) did not involve the issue of conflict between
various clauses of contract. There was no specific arbitration agreement
and mere contractual clauses providing for appeals before the Chief
Engineer and Secretary was held to be not constituting arbitration
agreement between the parties. The judgment in the case of M/s. Mehra
& Company is thus clearly distinguishable.
34)
In a case where few other clauses in the contract may be
slightly inconsistent or may be in conflict with the main arbitration
clause, the Courts will have to rule in favour of the arbitration rather than
giving weightage to those confusing or conflicting clauses. Once there is
clear agreement to arbitrate, the Courts would tend to ignore other
clauses of contract which may create confusion about existence of
arbitration agreement. After all arbitration is aimed at declogging the
overburdened Courts and therefore Courts need to necessarily rule in
favour of arbitration rather than concentrating on other inconsistent
clauses for holding that specific arbitration clause present in the contract
would get nullified by those clauses.
5 Arbitration Application No. 117 of 2013 decided on 11 July 2024
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35) Considering the overall conspectus of the case, I am of the
view that there exists arbitration agreement between the parties and
disputes relating to termination of Petitioner’s contract can be referred to
arbitration. It would therefore be just and proper to constitute Arbitral
Tribunal of a sole arbitrator for adjudication of disputes and differences
between the parties arising out of contract/agreement dated 6 February
2023.
36) Coming to Petition filed under Section 9 of the Arbitration
Act (CARBP-1070 of 2025), Mr. Cama submits that Petition under Section
9 can be converted into application under Section 17 of the Arbitration
Act since pleadings therein are complete and that if Arbitral Tribunal is
constituted, Petitioner is willing to exercise remedy under Section 17 of
the Arbitration Act before the Arbitral Tribunal.
37) In view of the above, I proceed to pass the following order :
(A) Smt. Justice Anuja Prabhudesai, former Judge of this Court, is
appointed as the Sole Arbitrator to adjudicate upon the disputes
and differences between the parties arising out of
contract/agreement dated 6 February 2023 referred to above. The
contact details of the Ld. Arbitrator are as under:
Office Address :- Office No.106, Arcadia Building, NCPA
Marg, Nariman Point, Mumbai-400 021.
Email ID :- [email protected]
Mobile No.:- 9823855445
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(B) A copy of this order be communicated to the learned sole
Arbitrator by the Advocate for the Petitioner/Applicant within
a period of one week from the date of uploading of this order.
The Petitioner/Applicant shall provide the contact and
communication particulars of the parties to the Arbitral
Tribunal alongwith a copy of this order.
(C) The learned sole Arbitrator is requested to forward the statutory
Statement of Disclosure under Section 11(8) read with Section
12(1) of the Act to the parties within a period of 2 weeks from
receipt of a copy of this order.
(D) The parties shall appear before the learned sole Arbitrator on
such date and at such place as indicated by her to obtain
,
appropriate direction with regard to conduct of the arbitration
including fixing a schedule for pleadings, examination of
witnesses, if any, schedule of hearings etc.
(E) The fees of the sole Arbitrator shall be as prescribed under the
Bombay High Court (Fee Payable to Arbitrators) Rules, 2018 and
the arbitral costs and fees of the Arbitrator shall be borne by the
parties in equal portion and shall be subject to the final Award
that may be passed by the Tribunal.
38)
Commercial Arbitration Petition No. 1070 of 2025 is
converted into application under Section 17 of the Arbitration Act to be
decided by the learned Arbitrator on its own merits.
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39) All rights and contentions of the parties are expressly kept open to
be raised before the Arbitral Tribunal.
40) With the above directions, the Petition and Application are
disposed of.
[SANDEEP V. MARNE, J.]
NEETA
SHAILESH
SAWANT
Digitally signed by
NEETA SHAILESH
SAWANT
Date: 2026.04.27
19:15:51 +0530
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