M/S. Team One INDIA PVT. LTD. vs. The Commissioner

Held

The Court held that at the stage of an application under Section 11(6) of the Arbitration and Conciliation Act, 1996, its role is limited to determining whether a dispute has arisen between the parties concerning the agreement and whether an arbitration clause exists. The Court is not required to delve into the merits of the rival claims or express any opinion on the parties' contentions regarding breach of contract or prematurity of the application. These matters are to be adjudicated by the arbitrator. Therefore, the Court found that the dispute between the parties could only be adjudicated by an arbitrator. Accordingly, Mr. Alladi Radha Krishna, Retired District Judge, was appointed as the sole arbitrator. The parties were granted liberty to file their respective pleadings before the arbitrator, and the arbitrator was to settle their fee, place, and other terms in consultation with the parties. The Arbitration Application was disposed of.

Facts

M/s. Team One India Pvt. Ltd. (the applicant) filed an application under Section 11(5) and (6) of the Arbitration and Conciliation Act, 1996, seeking the appointment of an arbitrator. The dispute arose from a consultancy agreement dated March 31, 2018, entered into with the Commissioner, Andhra Pradesh Capital Region Development Authority (APCRDA) and others (the respondents). The applicant was appointed as a consultant for the design and implementation of the Judicial Complex in Amaravati Capital City Area project. The applicant claims the respondents failed to pay the consultancy fee despite repeated requests and a legal notice dated October 24, 2019. The respondents contended that the applicant had not availed internal remedies and that the application was premature. They also argued that the applicant's failure to provide consultancy services led to construction delays, constituting a breach of contract.

Key Issues

1. Whether a dispute has arisen between the parties in respect of the consultancy agreement dated March 31, 2018, as contemplated by the arbitration clause, and if so, whether the present application under Section 11(6) of the Arbitration and Conciliation Act, 1996, is maintainable. Petitioner's arguments: The applicant argued that a dispute had indeed arisen due to the non-payment of consultancy fees and that the respondents had failed to appoint an arbitrator after receiving a legal notice, necessitating the present application. Respondents' arguments: The respondents contended that the applicant had not exhausted internal remedies and that the application was premature. They further argued that the applicant was responsible for breach of contract due to delays in providing consultancy services, which impacted construction.