In a recent judgement, the Madhya Pradesh High Court(HC) Petition under section 11(6) of the Arbitration and Conciliation Act, 1996 is not maintainable when there was agreement on procedure for appointing an arbitrator.
M/s A K Shivhare Infrastructure Pvt. ltd., the applicant has filed a petition under Section 11(6) of the Arbitration and Conciliation Act, 1996 seeking the appointment of an Arbitrator by Arbitration Clause 26.3 in the agreement dated 26.02.2018.
The Ministry of Road Transport and Highways i.e. Respondent No.1 invited proposals from the bidders for “Rehabilitation and Upgradation of intermediate lane flexible pavement to 2 lanes with paved shoulders Rigid Pavement on Khilchipur-Jirapur Road from Km 5.500 to Km 22.910 on Khilchipur to Jirapur section of newly declared NH-752B including the section from km 5.500 to km 22.910 [(17.410+7.748 (Overlay on existing) km)] in the State of Madhya Pradesh on EPC Mode”. The applicant participated in the tender process and stood as L1.
An agreement was executed with the respondents. According to the agreement respondent, No.2 MPRDC issued a work order dated 28.02.2018 for a contract amount of Rs.65,62,00,000/- with a completion period of 18 months including the rainy season and a maintenance period of four years.
During the pendency of the contract, the work of supervision was transferred from MPRDC to N.H. Division of Madhya Pradesh Public Works Department. According to the applicant the work was completed and as per the estimated cost of the work was 65.62 Crore but liability on account of GST was excluded.
On audit of the accounts, it came to the notice that the amount of Rs.7,51,99,414/- has wrongly been deducted under the head of the GST account. The applicant demanded a refund from the respondents which were not accepted.
It was evident from the arbitration clause that the parties did agree that in case of any dispute which is not resolved amicably by conciliation as provided in Clause 26.2 same shall be finally settled by way of conciliation and thereafter by way of the arbitration by the Rules of Arbitration of society for affordable redressal of dispute (SAROD). Even if the parties did not enter into the conciliation proceedings, the dispute is liable to be settled by arbitration by the rules of arbitration of the SAROD.
A Coram comprising Justice Vivek Rusia observed that since the applicant and respondents had agreed to the agreement on a procedure to be followed for appointing an arbitrator or arbitrators and if the aforesaid procedure fails only then the applicant can approach the Court by way of a petition under Section 11(6), therefore, the applicant is required to exhaust the remedy available under the aforesaid SAROD Arbitration Rules for affordable redressal of dispute. The petition was dismissed.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
