Mr. Saurav Singh Yadav, Advocate v. GOVT. OF NCT DELHI

Through: Ms. Nitika Bhutani, Advocate CORAM: HON'BLE MR. JUSTICE SUBRAMONIUM PRASAD % I.A. 6326/2025 (Exemption) O R D E R 10.03.2025 Allowed, subject to all just exceptions. ARB.P. 449/2025 1. The present petition has been filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 by the Petitioners seeking appointment of an Arbitrator to adjudicate upon the disputes which have arisen under a Contract Agreement entered into between the Petitioner and the Respondent for the work of “Construction of Entry No. 3 of connectivity of Redevelopment of East Kidwai Nagar Project to Pandit Bhagwan Sahai Vats Vitti Marg, including electrical and road work”. 2. Material on record indicates that the work was completed and the final bill has been submitted by the Petitioner on 21.12.2021. Disputes have arisen between the parties under the final bill submitted by the Petitioner. 3. Clause 25 of the Contract Agreement contains an arbitration clause This is a digitally signed order. ARB.P. 449/2025 The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 18/03/2025 at 11:40:05 which read as under: “CLAUSE 25 Except where otherwise provided in the contract, all questions and disputes relating to the meaning of the specifications, design, drawings and instructions here-in 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 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 cancellation, termination, completion or abandonment thereof shall be dealt with as mentioned hereinafter: the work, (i) If the contractor considers any work demanded of him to be outside the requirements of the contract, or disputes any drawings, record or decision given in writing by the Engineer-in-Charge or if the Engineer in Charge considers any act or decision of the contractor on any matter in connection with or arising out of the to be contract or carrying out of unacceptable and is disputed, such party shall promptly within 15 days of the arising of the disputes request the Chief Engineer or where there is no Chief Engineer, the Additional Director General (CE/ADG) who shall refer the disputes to Dispute Reressal Committee (DRC) within 15 days along with a list of disputes with amounts claimed if any in respect of each such dispute. The Dispute Redressal Committee (DRC) shall give the opposing party two weeks for a written response, and, give its decision within a period of 60 days extendable by 30 days by consent of both the parties from the receipt of reference from CE/ ADG. The constitution of Dispute Redressal Committee (DRC) shall be as indicated in Schedule 'F'. Provided that no party shall be represented before the Dispute This is a digitally signed order. ARB.P. 449/2025 The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 18/03/2025 at 11:40:05 Redressal Committee by an advocate/legal counsel etc. If the Dispute Redressal Committee (DRC) fails to give its decision within the aforesaid period or any party is dissatisfied with the decision of Dispute Redressal Committee (DRC) or expiry of time limit given above, then either party may within a period of 30 days from the receipt of the decision of Dispute Redressal Committee (DRC), give notice to the Chief Engineer, CPWD, in charge of the work or if there be no Chief Engineer, the Additional Director General of the concerned region of CPWD or if there be no Additional Director General, the Director General, CPWD (CE/ADG/DG) for appointment of arbitrator on prescribed proforma as per Appendix XV under intimation to the other party. It is a ... invoking arbitration. The CE/ ADG/DG shall in such case appoint the sole arbitrator or one of the three arbitrators as the case may be within 30 days of receipt of such a request and refer such disputes to arbitration. Wherever the Arbitral Tribunal consists of three Arbitrators, the contractor shall appoint one arbitrator within 30 days of making request for arbitration or of receipt of request by Engineer-incharge to CE/ADG/DG for appointment of arbitrator, as the case may be, and two appointed arbitrators shall appoint the third arbitrator who shall act as the Presiding Arbitrator. In the event of a. A party fails to appoint the second Arbitrator, orb. The two appointed Arbitrators fail to appoint the Presiding Arbitrator, then The Director General, CPWD shall appoint the second or Presiding Arbitrator as the case may be. (ii) Disputes or difference shall be referred for adjudication through arbitration by a Tribunal having sole arbitrator where Tendered amount is Rs. 100 Crore or less. Where Tendered Value is more than Rs. This is a digitally signed order. ARB.P. 449/2025 The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 18/03/2025 at 11:40:05 100 Crore, Tribunal shall consist of three Arbitrators as above. The requirements of the Arbitration and Conciliation Act, 1996 (26 of 1996) and any further statutory modifications or reenactment thereof and the rules made there under and for the time being in force shall be applicable. It is a term of this contract that the party invoking arbitration shall give a list of disputes with amounts claimed, if any, in respect of each such dispute along with the notice for appointment of arbitrator and giving reference to the decision of the DRC. It is also a term of this contract that any member of the Arbitration Tribunal shall be a Graduate Engineer with experience in handling public works engineering contracts at a level not lower than Chief Engineer (Joint Secretary level of Government of India). This shall be treated as a mandatory qualification to be appointed as arbitrator.

4. Under the arbitration clause, the Petitioner had approached the Executive Engineer for settlement of disputes which was refused on the ground that the claim is barred by limitation. The said refusal came on

18.11.2024. Since the Respondent has declined to settle the disputes and also decline to refer the disputes to the Dispute Redressal Committee, the Petitioner has approached this Court by filing the present petition for appointment of an Arbitrator. 5. Ms. Nitika Bhutani, learned Counsel for the Respondent/GNCTD appears on advance notice. She vehemently submits that the claim is barred by limitation and since it is a dead claim, the disputes ought not to be referred to Arbitration. 6. The law on the aforesaid aspect has been crystallized by the Apex Court in its Judgment passed in SBI General Insurance Co. Ltd vs. Krish Spinning, 2024 SCC OnLine SC 1754. The relevant portion of the said This is a digitally signed order. ARB.P. 449/2025 The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 18/03/2025 at 11:40:05 Judgment reads as under: “127. In Arif Azim (supra), while deciding an application for appointment of arbitrator under Section 11(6) of the Act, 1996, two issues had arisen for our consideration: i. Whether the Limitation Act, 1963 is applicable to an application for appointment of arbitrator Conciliation Act, 1996? If yes, whether the petition filed by M/s Arif Azim was barred by limitation? Section 11(6) of the Arbitration ii. Whether the court may decline to make a reference under Section 11 of Act, 1996 where the claims are ex-facie and hopelessly time-barred?

128. On the first issue, it was observed by us that the Limitation Act, 1963 is applicable applications filed under Section 11(6) of the Act, 1996. Further, we also held that it is the duty of the referral court to examine that the application under Section 11(6) of the Act, 1996 is not barred by period of limitation as prescribed under Article 137 of the Limitation Act, 1963, i.e., 3 years from the date when the right to apply accrues in favour of the applicant. To determine as to when the right to apply would accrue, we had observed in paragraph 56 of the said decision that “the limitation period for filing a petition under Section 11(6) of the Act, 1996 can only commence once a valid notice invoking arbitration has been sent by the applicant to the other party, and there has been a failure or refusal on part of that other party in complying with the requirements mentioned in such notice.”

129. Insofar as the first issue is concerned, we are of the opinion that the observations made by us in Arif This is a digitally signed order. ARB.P. 449/2025 The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 18/03/2025 at 11:40:05 Azim (supra) do not require any clarification and should be construed as explained therein.

130. On the second issue it was observed by us in paragraph 67 that the referral courts, while exercising their powers under Section 11 of the Act, 1996, are under a duty to “prima-facie examine and reject non- arbitrable or dead claims, so as to protect the other party from being drawn into a time-consuming and costly arbitration process.”

131. Our findings on both the aforesaid issues have been summarised in paragraph 89 of the said decision thus:— “89. Thus, from an exhaustive analysis of the position of law on the issues, we are of the view that while considering the issue of limitation in relation to a petition under Section 11(6) of the Act, 1996, the courts should satisfy themselves on two aspects by employing a two-pronged test - first, whether the petition under Section 11(6) of the Act, 1996 is barred by limitation; and to be secondly, whether arbitrated are ex-facie dead claims and are thus barred by limitation on the date of commencement of arbitration proceedings. If either of these issues are answered against the party seeking referral of disputes to arbitration, the court may refuse to appoint an arbitral tribunal.” the claims sought

132. Insofar as our observations on the second issue are concerned, we clarify that the same were made in light of the observations made by this Court in many of its previous decisions, more particularly in Vidya Drolia (supra) and NTPC v. SPML (supra). However, in the case at hand, as is evident from the discussion in the preceding parts of this judgment, we have had the benefit of reconsidering certain aspects of This is a digitally signed order. ARB.P. 449/2025 The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 18/03/2025 at 11:40:05 the two decisions referred to above in the light of the pertinent observations made by a seven-Judge Bench of this Court in In Re : Interplay (supra).

133. Thus, we clarify that while determining the issue of limitation in exercise of the powers under Section 11(6) of the Act, 1996, the referral court should limit its enquiry to examining whether Section 11(6) application has been filed within the period of limitation of three years or not. The date of commencement of limitation period for this purpose shall have to be construed as per the decision in Arif Azim (supra). As a natural corollary, it is further clarified that the referral courts, at the stage of deciding an application for appointment of arbitrator, must not conduct an intricate evidentiary enquiry into the question whether the claims raised by the applicant are time barred and should leave that question for determination by the arbitrator. Such an approach intention underlying Section 11(6-A) of the Act, and also to the view taken in In Re : Interplay (supra).” true meaning legislative

7. The final bill was submitted by the Petitioner on 21.12.2021. Applying the dictum of the Apex Court Suo Motu Writ Petition (C) No.3/2020 titled as Re: Congnizance for Extension of Limitation whereby the Apex Court has excluded the period between 15.03.2020 to 28.02.2022 for computing the limitation, the invocation of arbitration is within the period of three years and the Petitioner has approached this court within the period of limitation. Hence this Court is not inclined to dismiss the present petition on the ground of limitation at this juncture. 8. Accordingly, Mr. A.K. Singhal, Retd. Director General, CPWD (Mob. No. 9910444589) is appointed as the Sole Arbitrator to adjudicate This is a digitally signed order. ARB.P. 449/2025 The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 18/03/2025 at 11:40:05 upon the disputes between the parties. 9. It is made clear that all the observations made in this Order are only confined to the issue as to whether the Arbitrator should be appointed or not. It is open for the Respondent to raise the issue of limitation before the Arbitrator and it is for the Arbitrator to take a decision in accordance with law. 10. The arbitration would take place under the aegis of the Delhi International Arbitration Centre (DIAC) and would abide by its rules and regulations. The learned Arbitrator shall be entitled to fees as per the Schedule of Fees maintained by the DIAC. 11. The learned Arbitrator is also requested to file the requisite disclosure under Section 12(2) of the 1996 Act within a week of entering on reference. 12. All rights and contentions of the parties in relation to the claims/counter-claims are kept open, to be decided by the learned Arbitrator on their merits, in accordance with law. 13. Needless to say, nothing in this order shall be construed as an expression of this Court on the merits of the contentions of the parties. 14. The present petition stands disposed of in the above terms, along with pending application(s), if any. SUBRAMONIUM PRASAD, J MARCH 10, 2025 S. Zakir This is a digitally signed order. ARB.P. 449/2025 The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 18/03/2025 at 11:40:05