Delhi HC Sends Contractor’s MCD Payment Dispute To Mediation, Names Sole Arbitrator If Settlement Fails

The petitioner was awarded civil construction work under a Work Order dated 14 October 2021. He claimed that amounts remained outstanding despite completion of the work and passing of the final bill on 9 October 2023; the last part-payment was received on 26 December 2024.

The petitioner invoked arbitration by notice dated 7 July 2026, served on the respondent on 9 July 2026, under Clause 44 of the parties’ agreement.

Both parties agreed to attempt mediation and, if it failed, to refer the disputes to arbitration; they did not dispute the existence of a valid arbitration agreement.

Section 11 of the Arbitration and Conciliation Act, 1996 governs the Court’s appointment of an arbitrator, and the Court stated that its enquiry at this stage is confined to examining the prima facie existence of an arbitration agreement.

Clause 44 of the agreement provided for arbitration of unresolved disputes and designated Delhi as the place of arbitration.

The Court also directed that the arbitrator furnish the requisite disclosure under Section 12(2) of the Act.

The parties agreed both to mediation and to arbitration if mediation did not resolve the dispute.

As they also accepted that a valid arbitration agreement existed, the Court found no impediment to appointing an arbitrator under its limited Section 11 enquiry.

It left questions including arbitrability, jurisdiction and limitation for the arbitrator to determine, and clarified that its observations would not bind the arbitrator on the merits.

If mediation failed, Mr. Vishal Singhal, Advocate, was appointed as Sole Arbitrator, to enter upon the reference within three weeks of the mediation report recording failure; the arbitration is to proceed under the aegis of DIAC and its fee schedule.

The petition was disposed of accordingly.