M/S Rkmt Buildcon Private Limited vs. Government Of National Capital Territory Of Delhi

Facts

The petitioner, M/s RKMT Buildcon Private Limited, filed a petition under Section 11(6) of the Arbitration and Conciliation Act, 1996, seeking reference of certain additional claims to arbitration. The disputes arose from a contract for civil and electrical work awarded to the petitioner following a tender process. The contract contained an arbitration clause requiring prior reference to a Dispute Redressal Committee (DRC) and then to an arbitrator appointed by the Chief Engineer. An Arbitral Tribunal, consisting of a sole arbitrator, Mr. Bharat Bhushan Makkar, was already constituted to adjudicate certain claims. The petitioner sought to refer additional claims, including those related to security deposit deductions, delay in R/A bills, and GST implications, to the same Arbitral Tribunal. The Chief Engineer of the respondent, Government of NCT of Delhi, failed to refer these additional claims.

Held

The Court held that it accedes to the petitioner's prayer to refer the additional claims to arbitration. The Court noted that the Sole Arbitrator was unilaterally appointed by the respondent, an issue that has been consistently frowned upon in numerous judgments. However, the Court acknowledged the petitioner's submission that they are desirous of waiving the provisions of Section 12(5) of the Arbitration and Conciliation Act, 1996, and entering into an express agreement with the respondent in this regard. This waiver would enable the existing Arbitrator to exercise jurisdiction and adjudicate the additional claims. The Court directed that the additional claims be referred to the Sole Arbitrator appointed by the respondent, subject to the parties entering into an express agreement waiving Section 12(5) of the A&C Act. If there is any impediment in this regard, the parties are at liberty to avail appropriate remedies under law. The Court disposed of the petition with these directions.

Key Issues

1. Whether the Court should direct the respondent's Chief Engineer to refer the petitioner's additional claims to the existing Arbitral Tribunal, despite the Chief Engineer's failure to do so. 2. Whether the petitioner's willingness to waive Section 12(5) of the Arbitration and Conciliation Act, 1996, in relation to the unilaterally appointed arbitrator, is a prerequisite for referring the additional claims to arbitration. Petitioner's Arguments: The petitioner argued that the present petition is confined to seeking the reference of additional claims to the Arbitrator already appointed by the Chief Engineer. The petitioner expressed willingness to waive the provisions of Section 12(5) of the A&C Act and enter into an express agreement with the respondent to enable the existing Arbitrator to adjudicate these claims. The petitioner relied on various judgments concerning the unilateral appointment of arbitrators, which indicate that such appointments are frowned upon, but parties can waive this objection through an express agreement. Respondent's Arguments: The respondent's counsel appeared and did not record any specific arguments against the referral of additional claims, given the petitioner's willingness to waive Section 12(5) and the Court's observation regarding unilateral appointments.