M/S A K Engineer And Contractor PVT LTD Th Anil Sharma vs. Ut Of J And K Th Commissioner Secretary, Public Works Department, Jammu And Others

Held

The Court held that the existence of the arbitration clause and its invocation by the petitioner vide notice dated 30.09.2024 was not disputed. Despite the respondents initially filing objections, their learned counsel, during the course of the hearing, pleaded no objection if the petition was allowed. Consequently, the Court allowed the application, appointing Mr. Justice M. K. Hanjura (Former Judge, High Court of Jammu & Kashmir and Ladakh) as the sole arbitrator. The arbitrator is to proceed with the matter in accordance with the provisions of the Arbitration and Conciliation Act, 1996, and make an award within the time provided by the Act, with the prescribed fee and incidental expenses to be shared by the parties. The Registry was directed to send a copy of the order to the learned arbitrator.

Facts

M/s A K Engineer and Contractor Pvt. Ltd. (Petitioner) was awarded a contract for a bridge construction project valued at Rs. 1939.50 lacs by the Chief Engineer-respondent no.2 on September 9, 2019. The petitioner executed 60% of the work, valued at Rs. 11.50 crores, but received only Rs. 1.35 crores due to the department's inability to release funds. Subsequently, Rs. 10.60 crores were released. After two years of silence from the respondents regarding the balance work, a show cause notice was issued for resumption. The petitioner requested price variation with 6% GST or pre-closure. The respondents eventually terminated the contract and debarred the petitioner. The petitioner invoked arbitration clauses 23 and 24 of the contract on September 30, 2024, but the respondents failed to appoint an arbitrator, leading to the present petition under Section 11(6) of the Arbitration and Conciliation Act, 1996.

Key Issues

1. Whether the Court has the power to appoint an arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996, when the respondents have failed to appoint one after invocation of arbitration clauses by the petitioner? The Petitioner argued that a valid arbitration agreement existed, it was invoked by issuing a notice dated 30.09.2024, and the respondents failed to appoint an arbitrator, thus necessitating the Court's intervention under Section 11(6). The Petitioner relied on the arbitration clauses 23 and 24 of the General Conditions of the Contract. The Respondents, initially filing objections stating the petitioner failed to execute the work and raised disputes outside the contract, and that timely payments were made, later pleaded no objection to the petition being allowed during the hearing.