M/S Mbz Vkga Jv Th Vinay Kumar Gupta vs. Ut Of J And K Th Commissioner Secretary, Public Works (R And B) Department, Jammu And Others

Held

The Court held that the existence of the arbitration clause and its invocation by the petitioner were not disputed. Given the respondent's failure to nominate their arbitrator despite repeated notices, the Court found it appropriate to exercise its power under Section 11(6)(a)(c) of the Arbitration and Conciliation Act, 1996. The Court allowed the petition and, with the consent of both parties, appointed Mr. Justice Ali Muhammad Magrey (Retd. Chief Justice, High Court of J&K) as the sole arbitrator. The arbitrator was directed to proceed with the matter in accordance with the Act, make an award within the statutory time, and charge prescribed fees. The respondents were granted liberty to raise all objections regarding the subject matter before the learned Arbitrator. No issues were expressly left undecided.

Facts

The petitioner, M/s MBZ VKGA JV, filed a petition under Section 11(6)(a)(c) of the Arbitration and Conciliation Act, 1996, seeking the appointment of an independent arbitrator. The dispute arose from an EPC Contract Agreement dated August 27, 2018, executed with the UT of J&K for the construction of a bridge over the river Chenab for ₹119.67 crores. Disputes concerning payment delays, price escalation, and prolongation costs emerged during execution, with the petitioner attributing delays to factors like Covid-19 restrictions and non-timely payments, including GST expenses. The petitioner's attempts at amicable settlement and subsequent notices to nominate an arbitrator were not responded to by the respondents, leading to the present petition.

Key Issues

1. Whether the Court has the power to appoint an arbitrator under Section 11(6)(a)(c) of the Arbitration and Conciliation Act, 1996, when the respondent has failed to nominate its arbitrator as per the arbitration clause in the contract? Petitioner's contention: The petitioner argued that the existence of an arbitration clause and its invocation were undisputed. They contended that despite issuing notices for amicable settlement and subsequently for arbitration, the respondents failed to nominate their arbitrator or respond, thus necessitating the Court's intervention to appoint an arbitrator. Respondent's contention: The respondent, represented by the Sr. AAG, fairly submitted that an arbitrator could be appointed. However, they requested liberty to raise all possible pleas and objections before the appointed arbitral tribunal, as the petitioner's claim was vehemently disputed.