Rajshree Build Tech Pvt Ltd vs Indian Pharmaceutical Association

CNR No : HCBM020167402026

arbap414-2026-J.doc
AGK
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
ARBITRATION APPLICATION NO.414 OF 2026
Rajshree Build Tech Private Limited
… Applicant
Vs.
Indian Pharmaceutical Association
… Respondent
ATUL
GANESH
KULKARNI
Mr. Vilas Bombarde for the Applicant.
Digitally signed by
ATUL GANESH
KULKARNI
Date: 2026.10.19
13:34:52 +0530
Mr. Kushan Kode i/by Mr. Kalpesh Turalkar for the
Respondent.
CORAM : AMIT BORKAR, J.
RESERVED ON : OCTOBER 16, 2026.
PRONOUNCED ON : OCTOBER 19, 2026
JUDGMENT:
1. The present Application has been filed under Section 11 of
the Arbitration and Conciliation Act, 1996, for appointing an
independent Sole Arbitrator to decide the disputes which have
arisen between the Applicant and the Respondent from the
construction contract.
2. The Respondent's main objection is that under Clause 6.40.5
of the tender conditions, the Applicant cannot refer its claims to
arbitration because it did not ask for arbitration within 90 days
after receiving information that the final bill was released for
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payment. According to the Respondent, this period ended around
29 July 2024. However, the Applicant sent its notice asking for
arbitration only on 27 February 2025, which was received on 6
March 2025. Therefore, the Respondent says that there is no
existing arbitration agreement under which these claims can now
be decided.
3. I have gone through the pleadings of both parties, the
relevant conditions of the tender and work order, the
correspondence produced before the Court and the judgment of
this Court in M/s. Sowil Limited v. Deputy Chief Engineer
(Construction), Bhusawal , Commercial Arbitration Application No.
688 of 2025, decided on 28 January 2026, reported as 2026:BHC-
OS:2407. The main issue which arises is whether Clause 6.40.5
can be used for preventing the Applicant from referring its disputes
to arbitration, particularly when Section 28 of the Indian Contract
Act, 1872, and the judgments explaining that section are required
to be considered.
4. The Applicant's case is that the Respondent had given it the
work of constructing the proposed office building of the Indian
Pharmaceutical Association at Kalina, Santacruz (East), Mumbai.
The Letter of Acceptance was issued on 12 April 2018, followed by
the work order bearing reference No. IPA/110/118 dated 7 August
2018. The total contract amount was Rs. 7,32,96,669/-, excluding
GST. The contract conditions are contained in the Item Rate
Tender Form, Volume I, the Letter of Acceptance and the work
order. The Applicant relies upon Clause 6.40 of the tender as the
arbitration agreement. The Respondent is relying upon the
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conditions of the same tender for opposing the Application.
Therefore, there is no real dispute that the tender conditions are
part of the contract between them. According to the Applicant, it
completed the construction work and carried out additional work
as instructed by the Respondent and its architect, M/s. Amit
Valsangkar & Associates. The Applicant says that this additional
work was approved, but payment for it has still not been made. It
says that running bills and the final bill were submitted, and
several requests were made to the Respondent to release the
payment. Even after reminders and meetings, the amount claimed
for the additional work was not paid. For this reason, the Applicant
wants its claims relating to outstanding payments, escalation
charges and interest to be decided.
5. The Respondent disputes what the Applicant has stated. It
says that the construction was not completed within the time fixed
under the contract. The work order required completion within 12
months from 7 August 2018, meaning by 7 August 2019. However,
the Applicant has mentioned 8 February 2022 as the date of
completion in its notice. According to the Respondent, the work
was completed around two and a half years late and this caused
financial loss to it. The Respondent says that there was no written
approval for the alleged additional work, though such approval
was required under the work order. It states that the contract price
was fixed, and no price escalation was permitted. Its case is that
the final account was settled by making payment to the Applicant.
6. From the submissions of both parties, it appears that
disputes have arisen about payment for additional work, approval
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of changes, the reasons for delay, price escalation, interest, and
settlement of the final account. These disputes have arisen from
the construction contract. Whether the Applicant will be able to
recover the amounts claimed is a separate matter. At this stage, the
Court has to consider whether these disputes can be referred to
arbitration under the agreement between the parties and whether
the objection raised by the Respondent under Clause 6.40.5
prevents the reference.
7. It is necessary to first look at the arbitration agreement
between the parties. Clause 6.40 of the tender provides that
disputes about the work, its execution or maintenance, and the
rights and liabilities of the parties, whether arising during the
contract or after its termination or closure, shall be referred to a
Sole Arbitrator after written notice is given by one party to the
other. The arbitrator is to be appointed in the manner stated in
that clause. Clause 6.40.1 provides that disputes relating to the
contract shall be referred to a Sole Arbitrator and that the party
asking for arbitration must give details of the disputes and the
amount claimed under each dispute.
8. The Respondent says that Clause 24 of the work order, which
was relied upon by the Applicant in its first notice, is not an
arbitration clause. The relevant portion of Clause 24 reads:
“That in the case of any dispute or difference or tendencies
of any litigation or arbitration proceeding between the
parties to this work order relating to the terms and
conditions, the execution of the services shall not be
stopped / prevented / obstructed in any manner, whatsoever
by you.”
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9. To this extent, the Respondent's argument is correct because
this part of Clause 24 does not provide a complete procedure for
appointing an arbitrator. It mainly says that the work should not be
stopped or obstructed because of any dispute or arbitration
proceeding between the parties. However, the same clause states
that the tender documents, minutes of the final negotiation
meeting and the Bill of Quantities will form part of the agreement
and must be read along with the work order. Therefore, Clause 24
cannot be read alone without considering the other documents
forming part of the contract. The tender conditions are part of the
contract, and Clause 6.40 of the tender provides for arbitration.
The Respondent is relying upon Clause 6.40.5 of the tender to
oppose the Applicant's request. It cannot rely upon the tender
conditions for resisting the appointment of an arbitrator and, at
the same time, deny that the arbitration clause in those conditions
forms part of the agreement. I therefore find that an arbitration
agreement exists between the parties under Clause 6.40 of the
tender. The objection that Clause 24 of the work order is not
independently an arbitration clause does not defeat the present
Application.
10. The main issue between the parties concerns Clause 6.40.5.
It reads as follows:
“6.40.5 it is a term of the contract that if the Contractor
does not make any demand for Arbitrator in respect of any
claim within 90 days of receiving the intimation from the
Owner that the final bill is released for payment, the claims
if any received after 30 days’ period shall be absolutely
barred from reference to the Arbitrator”.
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11. The Respondent says that the Applicant is bound by this
condition because it accepted the tender conditions. According to
the Respondent, arbitration can be requested only within the
period mentioned in the contract. Once that period has ended, the
claim cannot be referred to arbitration. Therefore, the Respondent
argues that this Court cannot appoint an arbitrator under Section
11 for claims which are barred by the contract. There is some
substance in the Respondent's argument that parties are generally
bound by the contract conditions which they have accepted. An
arbitration agreement is based on the consent of the parties. A
Court cannot compel parties to arbitrate a dispute which they have
excluded from arbitration. But the conditions of the arbitration
agreement must be read together and not separately. Clause 6.40.5
cannot be considered without looking at the other conditions
under Clause 6.40 and the effect of the restriction placed upon the
Applicant by this clause. The language of Clause 6.40.5 needs to
be considered. The first part speaks about making a demand for
arbitration within 90 days after receiving information that the final
bill has been released for payment. But the later part refers to
claims received after a “30 days’ period”. These two references do
not match with each other. The clause does not explain why it first
mentions 90 days and later refers to 30 days while stating the
result of delay. The Respondent wants the Court to treat the clause
as providing a period of 90 days. Even if the period of 90 days is
accepted for the present Application, the important question
remains whether the clause can take away the Applicant's right to
seek arbitration after that period has ended.
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12. The Respondent relies upon its letter dated 30 April 2024. It
says that the letter informed the Applicant that the final account
was settled, and the final payment had been released. The
Respondent states that a cheque for Rs. 8,93,869 was issued
towards the amount payable under the work order. According to it,
the letter was sent to the Applicant by email and the Applicant has
not denied receiving it. On this basis, the Respondent says that the
90-day period ended around 29 July 2024. The Applicant says that
the Respondent must first prove that the event mentioned in
Clause 6.40.5 took place before the period can be counted.
According to the Applicant, the period cannot be counted only
from the date when the work was completed or when the final bill
was internally processed. The clause refers to receiving
information that the final bill has been released for payment.
Therefore, the nature of the communication and the date on which
the Applicant received it are important matters.
13. There is substance in the Applicant's argument that the event
mentioned in the clause must be established before the period is
calculated. However, in the present case, the Respondent has relied
upon its letter dated 30 April 2024 and says that the Applicant
received it by email. It states that the letter informed the Applicant
about settlement of the final account and release of payment. For
deciding the main issue, even if I assume that the Applicant
received this information on 30 April 2024, it is still necessary to
consider whether Clause 6.40.5 can be enforced. If the 90-day
period is counted from 30 April 2024, it would end around 29 July
2024. The Applicant's first notice seeking arbitration was dated 27
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February 2025 and was received on 6 March 2025. Thus, the
notice was issued after the period mentioned in Clause 6.40.5. The
Applicant later issued another notice dated 27 June 2025, invoking
Clause 6.40 of the tender and giving details of the amounts
claimed. This notice was issued after the period relied upon by the
Respondent. Therefore, the issue cannot be decided only by
looking at which notice was issued first. What has to be considered
is whether the contractual time limit can prevent the Applicant
from seeking arbitration.
14. Section 28 of the Indian Contract Act, 1872, as amended
with effect from 8 January 1997, provides that certain agreements
restricting proceedings are void. The relevant part provides:
“Every agreement,—
(a) by which any party thereto is restricted absolutely from
enforcing his rights under or in respect of any contract, by
the usual proceedings in the ordinary tribunals, or which
limits the time within which he may thus enforce his rights;
or
(b) which extinguishes the rights of any party thereto, or
discharges any party thereto, from any liability, under or in
respect of any contract on the expiry of a specified period so
as to restrict any party from enforcing his rights, is void to
that extent.”
15. The object of this amended provision is to prevent contract
conditions which take away the rights of one party or free the
other party from liability only because a shorter contractual period
has expired. Parties may agree about the procedure for deciding
disputes. However, such an agreement cannot be used to defeat
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the protection given by law when the condition has an effect which
Section 28 does not permit. In Grasim Industries Ltd. v. State of
Kerala, (2018) 14 SCC 265 , the Supreme Court considered a
contractual condition relating to the time within which disputes
could be raised. In paragraph 8, the Supreme Court observed:
“Even otherwise, we are of the view, that in terms of Section
28 of the Indian Contract Act, 1872, such a stipulation in a
contractual obligation would not be valid and binding.”
16. This judgment shows that a condition cannot be enforced
merely because it is written in the contract, if its effect is to impose
a time limit which the law does not allow. The conditions of an
arbitration agreement must be understood subject to the law.
17. The same issue was considered by the Delhi High Court in
D.D.A. v. Pandit Construction Co., FAO(OS) No. 382 of 2007,
decided on 19 April 2012. The Court considered a clause which
required the contractor to demand arbitration within 90 days after
receiving information that the bill was ready for payment. If the
contractor failed to do so, the claim was to be treated as waived
and the employer would be released from liability. The Court held
that, after the amendment of Section 28, a contractual condition
which takes away a right or frees a party from liability after a
specified period is void to that extent. In that case, the wording
stated that the employer would be released from liability. The
present clause uses different words. Still, the principle under
Section 28 remains relevant. A contractual time limit cannot be
used to defeat a right which the law protects from being taken
away in this manner.
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18. The Respondent may argue that Clause 6.40.5 does not take
away the Applicant's actual monetary claim. According to it, the
clause only prevents the claim from being referred to arbitration.
This argument has to be examined along with the other conditions
of the same contract. Clause 6.40.15 of the tender states:
“The Owner and the Contractor hereby agree that arbitration
under this Clause shall be a condition precedent to any right
to action under the contract with regard to the matters
hereby expressly agreed to be so referred to arbitration.”
19. This condition is important because it says that arbitration
must take place before a party can take action under the contract
for matters agreed to be referred to arbitration. If Clause 6.40.5 is
applied to prevent all the Applicant's claims from being referred to
arbitration after 90 days, Clause 6.40.15 would create a serious
difficulty for the Applicant in taking action for those claims. If both
clauses are read in the way suggested by the Respondent, the
agreed method of deciding the disputes would be taken away, and
the Applicant would be left without an effective remedy under the
contract for the claims covered by the agreement. This is different
from a contract which keeps a particular type of dispute outside
arbitration but allows the affected party to approach an ordinary
civil court. Clause 6.40.5 does not exclude a particular kind of
dispute from arbitration from the beginning. It applies to “any
claim” and makes arbitration dependent upon the contractor
making a demand within a short period after receiving information
about release of the final bill. In effect, it prevents an existing
claim from being referred to arbitration only because the
contractual period has passed. When read with Clause 6.40.15, it
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would take away the remedy which the parties had agreed upon
for enforcing their rights.
20. I am unable to accept that such a restriction can be enforced
only because the Applicant accepted the tender conditions. The
contract was entered into in 2018, long after the amendment to
Section 28 had come into force. Therefore, this statutory provision
has to be applied while considering the clause. To the extent
Clause 6.40.5 is relied upon to take away the Applicant's right to
seek arbitration only because a demand was not made within 90
days, it cannot be enforced consistently with Section 28. The
Respondent cannot use this clause to prevent the Applicant from
seeking a decision on disputes which otherwise fall within the
arbitration agreement.
21. The judgment of this Court in M/s. Sowil Limited , requires
consideration. In that case, the contract contained a condition that
claims exceeding 20 per cent of the contract value would not be
decided through arbitration. This Court held that the parties had
agreed to refer only claims within the specified value to
arbitration. In paragraph 38, the Court observed:
“It cannot be that once there is an arbitration agreement,
every claim under the contract must be resolved through
such arbitration especially when parties agree for exclusion
of certain nature of claims.”
22. The Court held that parties can agree that only certain
disputes will be decided through arbitration. It held that the
monetary restriction in that case did not take away the Applicant's
remedy because the Applicant could still file a civil suit for claims
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exceeding the specified value. The application was dismissed
because the particular claim, which was substantially above the
contractual limit, was not covered by the arbitration agreement.
The principle laid down in that judgment is accepted. However, it
has to be applied carefully to the present case. In M/s. Sowil
Limited , the restriction concerned the value of claims which the
parties had agreed to refer to arbitration. It was not a condition
which took away the right to seek arbitration for a claim otherwise
covered by the agreement only because a short period had expired.
Further, the Court found that the contractor could still approach
the ordinary civil court for relief.
23. In the present case, Clause 6.40.15 makes arbitration a
condition before action can be taken under the contract for matters
agreed to be referred. If Clause 6.40.5 is applied in the manner
suggested by the Respondent, arbitration would not remain
available after the specified period had expired. Reading both
clauses together would leave the Applicant without an effective
remedy under the contract. Therefore, the facts and conditions in
the two cases are materially different. It is necessary to consider
paragraph 29 of the judgment in M/s. Sowil Limited. While
discussing a decision of the Rajasthan High Court, this Court
recorded that a clause in the General Conditions of Contract which
prevented the contractor from raising claims after 90 days from
receiving information that the final bill was ready for payment had
been held to be:
“invalid and unenforceable in the light of provisions of
Section 28 of the Indian Contract (Amendment) Act, 1996.”
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24. This observation was made while distinguishing the
monetary restriction in that case from the time limit considered by
the Rajasthan High Court. M/s. Sowil Limited did not decide
whether a clause exactly like Clause 6.40.5 was valid. However,
paragraph 29 recognises the difference between a condition which
decides what claims can be referred to arbitration and a condition
which seeks to take away the right to raise a claim after a
particular period. This difference supports the conclusion reached
above.
25. The Respondent has argued that the Applicant did not
invoke the arbitration agreement in the proper manner. It points
out that the first notice dated 27 February 2025 referred to Clause
24 of the work order, which is not an arbitration clause. The
Respondent relies upon Clause 6.40.1, which requires the party
seeking arbitration to state the disputes and the amounts claimed
under each dispute. According to the Respondent, the amounts
mentioned in the two notices are different. The first notice claimed
Rs. 1,21,45,610.79/- as the balance amount and a total claim of
Rs. 2,66,20,934.04/-. The later notice dated 27 June 2025 claimed
Rs. 1,16,24,954.24/- as the balance amount, Rs. 38,52,333/-
towards escalation and Rs. 1,30,00,921 towards interest. The total
claim in the second notice was Rs. 2,84,78,208.24/-.
26. It is true that the amounts claimed in the two notices are
different. The Applicant will have to explain why the amounts
changed and give proper details of each claim. However, the
second notice invoked Clause 6.40 of the tender and stated the
amounts claimed under different heads. The fact that the amount
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in the later notice is different from the earlier amount does not
mean that there is no arbitration agreement between the parties.
The requirement to mention the disputes and amounts claimed is
meant to inform the other party about the claims which are being
referred to arbitration. Whether the details are sufficient, why the
amounts have changed and what amount is payable are matters
which the arbitrator can examine. The notice cannot be treated as
invalid merely because the Applicant will have to explain how the
monetary claim was changed.
27. There is no dispute that the Respondent received the first
notice on 6 March 2025 and the second notice on 7 July 2025. The
Respondent replied to the notices and denied that the Applicant
had an enforceable right to arbitration. Thus, the Applicant made a
written demand seeking arbitration, but the Respondent refused to
proceed with the appointment. Though the first notice referred to
Clause 24 of the work order, the later notice relied upon Clause
6.40 of the tender. The later notice is sufficient to show that the
Applicant wanted its disputes to be referred under the arbitration
agreement. Therefore, the objection about the reference to Clause
24 in the first notice does not defeat the demand for arbitration.
The Respondent says that under Clauses 6.40.2 to 6.40.4, it was
required to send a panel of three names within 30 days, from
which the Applicant could select one person. It argues that the
Applicant did not follow this procedure because it asked the
Respondent to jointly suggest a panel of three arbitrators within 14
days. This objection has to be considered along with Clause 6.40.1,
which provides that the Sole Arbitrator is to be appointed by the
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Managing Director of the Owner or his nominee and that the
contractor shall have no right to object to the appointment. The
conditions about appointment are not fully consistent with each
other. Clause 6.40.1 gives the Managing Director of the Owner or
his nominee the power to appoint the Sole Arbitrator. Clauses
6.40.2 to 6.40.4 provide for a panel procedure under which the
Owner sends three names and the contractor selects one. Thus, the
contract contains different provisions about the manner in which
the appointment is to be made. The Respondent has taken the
position that there is no enforceable arbitration agreement for the
Applicant's claims and has refused to act on the Applicant's
demand. In these circumstances, asking the Applicant to repeat its
request in another form would not serve any useful purpose.
28. The law regarding unilateral appointment of a Sole
Arbitrator must be considered. In Perkins Eastman Architects DPC
v. HSCC (India) Ltd., (2020) 20 SCC 760, the Supreme Court held
that a party which has an interest in the outcome of the dispute
cannot have the exclusive power to appoint the Sole Arbitrator.
The appointment procedure cannot put one party in a position
where it alone decides who will form the arbitral tribunal.
29. This principle was considered in M/s. Sowil Limited , where
this Court noted that appointment of an arbitrator by the General
Manager of the Railways could not be enforced in view of the later
position regarding unilateral appointment.
30. Applying these principles, Clause 6.40.1 cannot be enforced
in a way which gives the Respondent exclusive control over the
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appointment of the Sole Arbitrator. The Respondent has refused to
proceed with the appointment because, according to it, there is no
arbitration agreement for the Applicant's claims. As a result, the
parties have not been able to appoint the arbitral tribunal under
the agreed procedure. Once the objection under Clause 6.40.5 is
rejected, this Court can appoint an independent Sole Arbitrator
under Section 11, so that neither party controls the decision-
making process.
31. The Respondent's objection that the claim for additional
work is outside the arbitration agreement cannot be accepted at
this stage. Clauses 19 and 20 of the work order require prior
written approval of the rates for additional work and written
approval for any change from the tender specifications. The
Respondent says that the Applicant has not produced such written
approval. The Applicant, however, relies upon correspondence,
instructions given by the architect and directions issued while the
work was being carried out. Whether the additional work was
properly authorised and whether the documents relied upon by the
Applicant amount to the written approval required under the
contract are matters which will need to be examined on the basis
of evidence. The arbitration clause covers disputes about the work,
its execution and the rights and liabilities of the parties arising
from or connected with the contract. A dispute about payment for
additional work said to have been carried out on the instructions
of the Respondent or its architect comes within the wide wording
of Clause 6.40. Whether the Applicant is entitled to payment will
depend upon the evidence and the contract conditions. The claim
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cannot be kept outside arbitration merely because the Respondent
disputes the approval of the work or the Applicant's right to
receive payment.
32. The same reasoning applies to the claim for price escalation.
The Respondent relies upon Clause 2 of the work order, which says
that the contract price is fixed and no price escalation will be
allowed on any ground. The Applicant relies upon delay in
receiving approvals from MCGM and changes which, according to
it, were directed by the architect. The Applicant says that these
circumstances increased the cost of steel and other construction
materials. The parties have a dispute about why the cost increased
and whether the contract permits payment on that basis. The
condition which does not permit escalation may be a strong
defence to the Applicant's claim. But the existence of such a
defence does not mean that the dispute falls outside the arbitration
agreement. The arbitrator will have to examine the relevant
contract conditions and decide the claim accordingly.
33. The Respondent says that the Applicant completed the work
only on 8 February 2022, although the contract required
completion by 7 August 2019. It relies upon Clause 10 of the work
order, which treats time as the essence of the contract and provides
for liquidated damages at 1 per cent per week, subject to a
maximum of 5 per cent. The Applicant says that the delay
happened because approvals were not received in time and
changes were made to the work. The completion date mentioned
by the Applicant shows that the work was completed after the date
fixed in the work order. However, this fact alone does not prove
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that the entire delay was caused by the Applicant or that the
Respondent is entitled to recover the damages claimed by it. The
reasons for the delay and whether liquidated damages can be
applied will have to be decided on the basis of evidence. The
Respondent will be free to present its case and raise any
counterclaim which is permitted by law before the arbitrator.
34. The objection about settlement of the final account needs to
be examined. The Respondent relies upon its letter dated 30 April
2024 and the cheque for Rs. 8,93,869. It says that the final
account was settled, and no amount remained payable. The
Applicant, however, says that payment for the additional work was
not made. According to the Respondent's own case, its letter dated
30 April 2024 disputed the alleged additional work and rejected
the Applicant's claim in that regard. This shows that there was a
dispute between the parties. Merely paying the amount shown in
the final account does not prove that every other disputed claim
between the parties was settled. The material presently identified
does not show that the Applicant accepted the cheque in full and
final settlement of all claims or signed a separate document
releasing the Respondent from all liability.
35. The Respondent relies upon Clause 22 of the work order,
which requires a no-dues and no-claim certificate to be submitted
along with the final bill. But the fact that the contract requires
such a certificate does not prove that the Applicant signed it or
that all claims were settled. Whether the Applicant gave any no-
claim certificate, whether it covers the present claims and whether
there was a full and final settlement between the parties will
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depend upon the relevant documents and the surrounding
circumstances. These matters cannot be decided only on the
Respondent's statement that the final bill was paid. Therefore, the
dispute about the outstanding payments still remains to be
decided.
36. The Respondent argues that the claims are barred by
limitation because the work was completed on 8 February 2022
and the notice seeking arbitration was received on 6 March 2025,
more than three years later. This calculation alone cannot provide
a complete answer to the Applicant's claims. The Applicant says
that bills were raised in 2023 and that the Respondent's letter
dated 30 April 2024 informed it about settlement of the final
account and disputed the claims relating to additional work. The
first notice seeking arbitration was issued in February 2025. The
date on which each claim became payable, the date on which it
was denied and the effect of the correspondence between the
parties may be different depending upon the nature of the claim.
Therefore, merely because the work was completed in February
2022, it does not automatically follow that every monetary claim
became barred by limitation on that date. At the stage of deciding
an application under Section 11, an objection based on limitation
can defeat the application where the bar is clear from the admitted
facts and does not require examination. In the present case, the
record shows that the parties exchanged communications about
payment and that the Respondent communicated its position about
the final account in April 2024. The Applicant thereafter invoked
arbitration in 2025 and filed the present Application in 2026. In
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these circumstances, it cannot be held that all the Applicant's
claims are barred under the ordinary law of limitation. The
Respondent will be free to raise the limitation issue before the
arbitrator. The arbitrator will decide it according to law and after
considering the dates relevant to each claim. The finding that the
contractual period of 90 days cannot be enforced does not mean
that the Applicant's claims automatically fall within limitation
under the Limitation Act, 1963.
37. The Respondent has questioned the authority of the person
who affirmed the Application. It points out that there are defects in
the verification and that a separate resolution authorising the
signatory has not been attached. These objections do not concern
the existence of the arbitration agreement or the question whether
Clause 6.40.5 can be enforced. The Application contains a
statement that Shri Kirti Kumar J. Sharma is authorised to sign and
verify the pleadings. If proof of his authority is required, the Court
can direct the Applicant to produce it. A procedural defect of this
kind, if it can be corrected, would not be a reason to refuse
reference of the disputes to arbitration, when the arbitration
agreement otherwise exists and the appointment procedure has
failed.
38. For these reasons, I find that the Respondent's objection
under Clause 6.40.5 does not defeat the present Application. The
arbitration agreement under Clause 6.40 remains enforceable. The
Respondent has refused to proceed with the appointment of the
arbitrator, and the contractual appointment procedure cannot be
enforced in a manner which gives the Respondent exclusive
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control over the appointment of the Sole Arbitrator. Therefore, this
Court can appoint an independent Sole Arbitrator under Section
11 of the Arbitration and Conciliation Act, 1996.
39. The Application, therefore, deserves to be allowed. An
independent Sole Arbitrator shall be appointed to decide the
disputes arising from the contract, including the Applicant's claims
for additional work, outstanding payments, escalation and interest,
along with any counterclaims of the Respondent which fall within
the arbitration agreement. The findings in this opinion regarding
the merits of the claims are limited to the question of appointment
of an arbitrator. The arbitrator shall decide the actual rights of the
parties, the effect of the contract conditions, the question of
ordinary limitation, the claim of full and final settlement, the delay
in completing the work and the amount, if any, payable to either
party. These matters shall be decided on the basis of evidence and
according to law.
A) Mr. Dormaan Dalal, an Advocate of this Court is hereby
appointed as the Sole Arbitrator to adjudicate upon the
disputes and differences between the parties arising out of
and in connection with the Agreement referred to above;
Office Address:- Office No. 206 & 207, Blue Moon Chambers,
25, nagindas Master Road, Fort, Mumbai 400 023
Email ID: [email protected]
B) A copy of this Order will be communicated to the
Learned Sole Arbitrator by the Advocates for the Petitioner
within a period of one week from today. The Petition shall
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provide the contact and communication particulars of the
parties to the Arbitral Tribunal along with 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 two 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, to
obtain appropriate directions with regard to conduct of the
arbitration including fixing a schedule for pleadings,
examination of witnesses, if any, schedule of hearings etc. At
such meeting, the parties shall provide a valid and functional
email address along with mobile and landline numbers of the
respective Advocates of the parties to the Arbitral Tribunal.
Communications to such email addresses shall constitute
valid service of correspondence in connection with the
arbitration;
E) All arbitral costs and fees of the Arbitral Tribunal shall
be borne by the parties equally in the first instance, and shall
be subject to any final Award that may be passed by the
Tribunal in relation to costs.
40. Needless to say, nothing contained in this order is an
expression of an opinion on merits of the matter or the relative
strength of the parties.
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41. All issues on merits are expressly kept open to be agitated
before the arbitral tribunal appointed hereby.
42. All actions required to be taken pursuant to this order shall
be taken upon receipt of a downloaded copy as available on this
Court’s website.
43. The Application stands disposed off in above terms.
(AMIT BORKAR, J.)
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