TMI Blog2019 (11) TMI 663X X X X Extracts X X X X X X X X Extracts X X X X ..... THAT:- Under Clause 64(1) of GCC, if there is any dispute or differences between the parties or the respective rights and liabilities of the parties on any matter in question or any other ancillary dispute arising from the terms of the contract or if the railway administration fails to make a decision within the time stipulated thereon, then in any such case, but except in any of the excepted matters , the General Manager may nominate the officer by designation as referred to under Clause 64(3)(a)(i) and a(ii) respectively with further procedure being prescribed for the sole arbitrator or the Arbitral Tribunal to adjudicate the dispute/differences arising under the terms of the contract between the parties. In Union of India and another v. M.P. Gupta [ 2004 (2) TMI 725 - SUPREME COURT ], Union of India v. Singh Builders Syndicate [2 009 (2) TMI 794 - SUPREME COURT] and in a catena of judgments, the court held that whenever the agreement specifically provides for appointment of named arbitrators, the appointment of arbitrator should be in terms of the contract. The court, however observed in para (6) that in the case of public institutions which are slow in responding to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e same day i.e. on 06.05.2014, parties also entered into a supplementary agreement which recorded full accord and satisfaction as on 06.05.2014. In the meanwhile, on 05.05.2014, respondent sent a letter to the appellant alleging that under the compulsion of circumstances, it had to sign the so-called final bill without protest as desired by the administration, otherwise heavy financial loss would have been caused to respondent and it may not be in a position to tender and execute further works. The respondent averred that a sum of over ₹ 1.50 crores still remains to be paid to the respondent and calling upon the appellant to make the payment within 90 days. The respondent vide its letter dated 05.05.2014 invoked arbitration clause as contained under Clause 64 of General Conditions of Contract. 3. The appellant issued a reply dated 25.07.2014 rejecting the arbitration claim of the respondent, taking the stand that the respondent had signed the final bill and also signed the supplementary agreement which clearly stipulates that it was agreed between the parties that the respondent has accepted the said sums mentioned therein in full and final satisfaction of all dues ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e High Court held that though the appellant claims that the disputes raised by the respondent are in the nature of excepted matters but that the issue can be examined by the arbitrator. With those findings, the court appointed Mr. H.K. Chaturvedi, advocate as Sole Arbitrator and directed that arbitration shall take place under the aegis of the Delhi International Arbitration Centre. 7. Mr. Bharat Singh, learned counsel appearing for the appellant- Union of India-Railways submitted that the request for appointment of arbitrator was made before the Amendment Act, 2015 (w.e.f 23.10.2015) and hence, the proceedings will have to be proceeded in accordance with the pre-amended provision of the Act, 1996. It was submitted that the High Court erred in appointing an independent arbitrator instead of directing the General Manager, Railway administration to appoint an arbitrator as per the terms and conditions of Clause 64 of GCC which stipulates that excepted matters cannot be referred to arbitration. 8. Per contra, Mr. Shantanu Kumar and Ms. Geetanjali Mohan, learned counsel for the respondent(s) submitted that once the appellant has failed to appoint an arbitrator u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng to SP Singla Pvt. Ltd. v. State of Himachal Pradesh and another (2019) 2 SCC 488, in Union of India v. Parmar Construction Company 2019 (5) SCALE 453, it was held as under:- 26. We are also of the view that the Amendment Act, 2015 which came into force, i.e. on 23rd October, 2015, shall not apply to the arbitral proceedings which has commenced in accordance with the provisions of Section 21 of the Principal Act, 1996 before the coming into force of Amendment Act, 2015, unless the parties otherwise agree. 27. In the instant case, the request was made and received by the Appellants in the concerned appeal much before the Amendment Act, 2015 came into force. Whether the application was pending for appointment of an arbitrator or in the case of rejection because of no claim as in the instant case for appointment of an arbitrator including change/substitution of arbitrator, would not be of any legal effect for invoking the provisions of Amendment Act, 2015, in terms of Section 21 of the principal Act, 1996. In our considered view, the applications/requests made by the Respondent contractors deserves to be examined in accordance with the principal Act, 1996 wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. For this purpose, the Railway will send a panel of more than 3 names of Gazetted Railway Officers of one or more departments of the Railway which may also include the name(s) of retired Railway Officer(s) empanelled to work as Railway Arbitrator to the contractor within 60 days from the day when a written and valid demand for arbitration is received by the GM. Contractor will be asked to suggest to General Manager at least 2 names out of the panel for appointment as contractor's nominee within 30 days from the date of dispatch of the request by Railway. The General Manager shall appoint at least one out of them as the contractor's nominee and will, also simultaneously appoint the balance number of arbitrators either from the panel or from outside the panel, duly indicating the 'presiding arbitrator' from amongst the 3 arbitrators so appointed. GM shall complete this exercise of appointing the Arbitral Tribunal within 30 days from the receipt of the names of contractor's nominees. While nominating the arbitrators, it will be necessary to ensure that one of them is from the Accounts Department. An officer of Selection Grade of the Accounts Department shall be c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ditions of Contract came up before this Court and this Court held that where two gazetted railway officers are appointed as the Arbitral Tribunal, the High Court should not appoint a retired Judge of the High Court as a sole arbitrator and the appointment of sole arbitrator was set aside. The conditions of clauses 63 and 64 of the General Conditions of Contract are almost analogous to the one we have in our hand. In that case also relying on clause 64 of the contract a three-Judge Bench presided over by the Chief Justice of India observed as follows: (SCC p. 505, para 4) 4. In view of the express provision contained therein that two gazetted railway officers shall be appointed as arbitrators, Justice P.K. Bahri could not be appointed by the High Court as the sole arbitrator. On this short ground alone, the judgment and order under challenge to the extent it appoints Justice P.K. Bahri as sole arbitrator is set aside. Within 30 days from today, the appellants herein shall appoint two gazetted railway officers as arbitrators. The two newly appointed arbitrators shall enter into reference within a period of another one month and thereafter the arbitrators shall make their ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , was not right in appointing an independent arbitrator ignoring Clause 64 of the General Conditions of Contract. 16. Insofar as the plea of the appellant that there was settlement of final bill/issuance of No Claim letter, the learned counsel for the appellant has drawn our attention on Clause 43(2) Signing of the No Claim Certificate and submitted that as per Clause 43(2), the contractor signs a No Claim certificate in favour of the railway in the prescribed format after the work is finally measured up and the contractor shall be debarred from disputing the correctness of the items covered under the No Claim certificate or demanding a clearance to arbitration in respect thereof. On behalf of the respondent, it has been seriously disputed that issuance of No Claim certificate as to the supplementary agreement recording accord and satisfaction as on 06.05.2014 (CA No.6400/2016) and issuance of No Claim certificate on 28.08.2014 (CA No.6420/2016) that they were issued under compulsion and due to undue influence by the railway authorities. We are not inclined to go into the merits of the contention of the parties. It is for the arbitrator to consider the clai ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
