Tpf Getinsa Eurostudios Sl Joint Venture With Rodic Consultants PVT LTD Th Anshuman Krishanu vs. Jammu Smart City LTD Th Ramesh Kumar

Held

The Court held that an arbitration clause exists in the contract and that the petitioner had validly invoked it by issuing a Notice of Dispute and subsequently a Notice for Invocation of Arbitration. The Court acknowledged the petitioner's claims regarding the non-release of the Performance Bank Guarantee, non-payment of outstanding invoices, and cost of funds. The respondent's contention that no arbitral dispute exists was implicitly rejected by the Court's subsequent actions. The Court appointed Hon'ble Ms. Justice R. Banumathi, Former Judge Supreme Court of India, as the nominee Arbitrator on behalf of the petitioner, and Hon'ble Mr. Justice Tashi Rabstan, Former Chief Justice of High Court of Jammu & Kashmir and Ladakh, as the nominee Arbitrator on behalf of the respondent. These two arbitrators are directed to appoint a third arbitrator to act as the Presiding Arbitrator. The duly constituted Arbitral Tribunal is to proceed with the reference and make an award within the time provided by the Act, with the respondent at liberty to raise all objections before the Tribunal. The petition was disposed of accordingly.

Facts

The petitioner, TPF Getinsa Eurostudios SL Joint Venture with Rodic Consultants Pvt. Ltd., filed a petition under Section 11(6) of the Arbitration and Conciliation Act, 1996, seeking the appointment of a nominee arbitrator for the respondent, Jammu Smart City Ltd. (JSCL). The parties entered into a contract on March 6, 2019, for Project Management Consultancy Services for ₹38,587,314/- (excluding GST) for 36 months. The petitioner raised invoices totaling ₹70,017,958/- (including GST), of which ₹20,000,000/- was paid. After contract expiry and extensions, outstanding amounts were calculated at ₹396,444,222/- (including GST), with ₹225,401,360/- released. The petitioner issued a Notice of Dispute on February 26, 2024, seeking ₹288,615,134/-. JSCL directed the petitioner to resubmit/validate the Performance Bank Guarantee (PBG) and later declared the firm ineligible for payment. The petitioner invoked arbitration on October 22, 2024, citing non-release of PBG, non-payment of outstanding invoices, and cost of funds. JSCL failed to nominate an arbitrator.

Key Issues

1. Whether an arbitral dispute exists between the parties, as contended by the respondent, under the terms of the Contract Agreement dated 06.03.2019, particularly concerning the outstanding payments and the Performance Bank Guarantee. The petitioner argued that a dispute clearly exists, evidenced by their Notice of Dispute and subsequent invocation of arbitration due to the respondent's failure to release payments and the PBG. They relied on Clause 8.1 and 8.2 of the General Conditions of Contract (GCC) for amicable settlement and arbitration. The respondent argued that no arbitral dispute exists and that the petition is misconceived and untenable, based on a bare analysis of the case set out in the petition. They did not explicitly name any specific provisions or precedents relied upon for this contention.