M/S Kmv Projects Limited vs. Karnataka Housing Board

Facts

M/s KMV Projects Limited (Petitioner) entered into a Construction Agreement dated 31.03.2017 with Karnataka Housing Board (Respondent) for construction of Mini Vidhana Soudha at Chittapura Taluk. The Petitioner claims to have completed the work by 20.10.2019, with the respondent taking possession on 18.01.2025. The Petitioner alleges non-release of payments for RA bills, final bills, price adjustment, escalation, additional quantities, GST, and other contractual entitlements, leading to a claim of Rs.8,37,70,608/- with interest. Disputes arose, and the Petitioner invoked the arbitration clause by issuing a notice under Section 21 of the Arbitration and Conciliation Act, 1996. The Respondent did not respond to the notice, prompting the Petitioner to file a petition seeking the appointment of a sole arbitrator.

Held

The Court held that a Sole Arbitrator is required to be appointed for the adjudication of the disputes between the parties. This decision was based on the existence of the arbitration clause within the Construction Agreement and the fact that the Petitioner had duly invoked this clause by issuing a notice under Section 21 of the Arbitration and Conciliation Act, 1996. The Respondent's submission of no objection further supported this conclusion. Consequently, the Court allowed the Civil Miscellaneous Petition and appointed Hon’ble Shri Justice A.N.Venugopala Gowda, Former Judge of the High Court of Karnataka, as the Sole Arbitrator. The Court directed that all claims and contentions of both parties are left open for the Arbitrator to decide. The Registry was instructed to communicate the order to the Arbitration and Conciliation Centre and the appointed Arbitrator, and to return original documents after obtaining photocopies. Parties were directed to appear before the Arbitration and Conciliation Centre on 04.11.2026.

Key Issues

1. Whether the Court should appoint a sole Arbitrator under Section 11(5) & 11(6) of the Arbitration and Conciliation Act, 1996, given the existence of an arbitration clause in the Construction Agreement and the invocation of the same by the Petitioner? Petitioner's contention: The Petitioner argued that a dispute has arisen between the parties concerning the Construction Agreement dated 31.03.2017, and the arbitration clause (Clause 4 of Special Conditions of Contract) was duly invoked by issuing a notice under Section 21 of the Act. The Respondent's failure to respond necessitated the present petition for the appointment of an arbitrator. Respondent's contention: The Respondent stated that they have no objection to the appointment of a sole Arbitrator and that all contentions of the parties may be left open for adjudication by the Arbitrator.