M/S. EAGLE-MPCC (JV), A REGISTERED FIRM AND HAVING v. THEJESWINI

ORDER R.DEVDAS J., (ORAL): This Civil Miscellaneous Petition is filed under Section 11(5) and (6) of the Arbitration and Conciliation Act, 1996 (herein after referred to as 'the Act' for short) seeking appointment of a sole arbitrator to adjudicate the dispute between the parties arising under the letter of acceptance dated 27.01.2011.

2. After issuance of notice, the respondent has appeared and the respondent is represented by learned Central Government Senior Standing Panel Counsel.

3. Learned counsel for the respondent submits that an elaborate statement of objections have been filed and it is - 3 - NC: 2024:KHC:25765 CMP No. 498 of 2021 pointed out that the respondent invited tenders for earthwork, major bridges, road under bridges, road over bridges, protective work, road work, and other miscellaneous works from CH 83000 to CH 88000 between Yediyur and B.G.Nagar section in terms of tender notice dated 29.09.2010. The letter of acceptance was issued to the petitioner on 02.03.2011. The petitioner was to submit security deposit and performance guarantee within fifteen days from the date of issuing the letter of acceptance. The petitioner failed to submit security deposit and performance guarantee. The respondent therefore issued a notice on 09.05.2011 to the petitioner, granting seven days to submit the security deposit and performance guarantee. The petitioner did not submit the security deposit and performance guarantee in compliance with the notice. Thereafter, the respondent once again issued a notice on

02.06.2011 granting 48 hours to submit the security deposit and performance guarantee. Since the respondent failed to comply with the requirement of the tender notice, the respondent terminated the contract on 23.06.2011.

4. Learned counsel for the respondent therefore submits that having regard to the established position of law as - 4 - NC: 2024:KHC:25765 CMP No. 498 of 2021 reiterated in M/s B and T Ag Vs. Ministry of Defence reported in (2024) 5 SCC 358, time started running for the petitioner from 23.06.2011 when the contract has terminated and the three years period having lapsed from the said day, this civil miscellaneous petition is not maintainable.

5. Per contra, learned counsel for the petitioner draws the attention of this Court to the statement of objections filed by the respondent and submits that the respondent do not dispute the fact that the petitioner filed W.P.No.29575/2011 on

22.08.2011, two months after the date of termination of the contract at the hands of the respondent. The said writ petition was dismissed on 25.01.2019 while noticing respondent has lien in respect of the claim in other contracts between the parties. In that view of the matter, this Court held that there is a written agreement under which there is an arbitration clause, and it is very clear that all disputes and differences of any kind whatsoever arising out of or in connection with the contract, any other contract, work in progress, the parties can invoke the arbitration clause. It was therefore directed that the petitioner can invoke the arbitration clause. Further, in an intra Court appeal filed at the hands of - 5 - NC: 2024:KHC:25765 CMP No. 498 of 2021 the petitioner in W.A.No.943/2019, by order dated 29.06.2021, the Division Bench reserved liberty to the petitioner herein to seek relief under Section 9 of the Arbitration and Conciliation Act, 1996, in accordance with law. Thereafter, the petitioner issued an arbitration notice on 18.08.2021 calling upon the respondent to nominate an arbitral tribunal. The respondent issued a reply on 07.12.2021 declining to come forward for arbitration while clearly stating that the claim was time barred. Learned counsel for the petitioner draws the attention of this Court to a recent decision of the Hon'ble Apex Court in the case of M/s Arif Azim Co. Limited Vs. M/s Aptech Limited, (2024) 5 SCC 313. In the said decision, the judgment cited by the learned counsel for the respondent, namely, M/s B and T AG (supra), has also been considered.

6. Having heard the learned counsels on both side, this Court is required to decide as to whether, the civil miscellaneous petition filed under Section 11 is required to be rejected on the ground that the claim is time barred/ it is dead wood or whether this Court should proceed to appoint an arbitrator in terms of the arbitration clause which was contained in the tender document. - 6 - NC: 2024:KHC:25765 CMP No. 498 of 2021

7. In Arif Azim (supra), the three judges bench has taken into consideration all the earlier judgments, including Bharat Sanchar Nigam Limited and another Vs. Nortel Networks India Private Limited reported in (2021) 5 SCC 738; Utkal Commercial Corporation Vs. Central Coal Fields Limited reported in (1999) 2 SCC 571; M/s B and T Ag Vs. Ministry of Defence reported in (2024) 5 SCC 358, and many other cases inducing Vidya Drolia vs. Durga Trading Corporation reported in (2021) 2 SCC 1. Insofar as the issue as to whether the claim sought to be arbitrated are ex-facie dead claims are thus barred by limitation on the date of commencement of arbitration proceedings, it is no doubt clear that all the decisions are of the opinion that where once the time has begun to run, no subsequent disability or inability to institute a suit or make an application can stop the time. However, it has also been held in all such cases, having regard to the other provisions of the Limitation Act, a party can always point out, having regard to a certain document, that there is acknowledgement on the part of the respondent and therefore there is an extension of the period of limitation; similarly, there is an express agreement between the parties or implied - 7 - NC: 2024:KHC:25765 CMP No. 498 of 2021 agreement between the parties, extending the time for completion of the contract. In such cases, it will be for the arbitral tribunal to consider as to whether such claim or documents were produced at the hands of the claimants. It is for the Arbitral Tribunal to assess as to whether the period of limitation has been mutually extended by the parties. For that purpose, evidence will have to be recorded, and such decision cannot be taken by this Court while considering an application under Section 11 of the Act.

8. In the present case, as contended by the learned counsel for the petitioner and not disputed by the learned counsel respondent, petitioner W.P.No.29575/2011 on 22.08.2011, two months after the termination of the contract at the hands of the respondent. The said writ petition was dismissed on 25.01.2019 clearly permitting the petitioner to invoke the arbitration clause. The Division Bench, in its order in writ appeal has also granted liberty to the petitioner to invoke the arbitration clause and file an application under Section 9 of the Arbitration and Conciliation Act, 1996. That being the admitted position, the arbitral tribunal will have to take all these aspects into - 8 - NC: 2024:KHC:25765 CMP No. 498 of 2021 consideration. Having regard to these admitted facts, this Court is of the considered opinion that it cannot declare the claim of the petitioner as a dead wood. The contention of the learned counsel for the respondent is that in the writ petition filed at the hands of the petitioner, in the year 2011, the prayer was not the same as sought to be made out before this Court. Insofar as the contention of the learned counsel for the respondent that in the writ petition filed by the petitioner, such a claim was not made, this Court is of the opinion that these are all questions that are required to be considered by the arbitral tribunal.

9. This Court has gone through the annexures filed along with the memorandum of Civil Miscellaneous Petition. This Court is satisfied that the petitioner company has fulfilled the requirements under Section 11 of the Arbitration and Conciliation Act, 1996.

10. In the light of the aforesaid clause of arbitration and the contentions advanced by the petitioners the following order is passed: NC: 2024:KHC:25765 CMP No. 498 of 2021 - 9 - ORDER (a) The petition is allowed appointing Hon'ble Justice Shri.Pradeep D Waingankar, Former Judge, High Court of Karnataka, as the sole arbitrator to enter reference of the disputes between the petitioners and the respondents and conduct proceeding at the Arbitration and Conciliation Centre (Domestic and International), Bengaluru according to the Rules governing the said Arbitration Centre. (b) All contentions inter se parties are left open adjudication arbitration proceedings. (c) The office is directed to communicate this order to the Arbitration and Conciliation Centre and to Hon'ble Justice Shri.Pradeep D Waingankar, Former Judge, High Court of Karnataka, as required under the Arbitration and Conciliation Centre Rules, 2012. Sd/- JUDGE List No.: 1 Sl No.: 14 CT: BHK