M/S Progressive Engineering Co A Partnershp Firm vs. Bridge And Roof Company ( INDIA) Limited A Government Of INDIA Enterprises

Held

The Court held that the arbitration agreement between the parties, specifically Clause 47 of the General Conditions of Contract, stipulated a different arbitration mechanism than the Arbitration and Conciliation Act, 1996. Clause 47(ii) stated that for disputes concerning the interpretation and application of contracts and commercial agreements between the company and other Public Sector Undertakings/Government Departments, a sole arbitrator would be nominated by the Secretary of the Government of India in charge of the Department of Public Enterprises, and the Arbitration and Conciliation Act, 1996, would not be applicable. Therefore, the Court found that the parties had agreed that arbitration would not be under the 1996 Act but through a specific nomination process. Consequently, the Court directed the petitioner to file their application and claims before the Secretary, Government of India, in charge of the Department of Public Enterprises, who would then appoint a sole arbitrator as per the arbitration agreement. The application was disposed of with this direction.

Facts

M/s Progressive Engineering Co., a partnership firm, filed an application under Section 11(6) of the Arbitration and Conciliation Act, 1996, seeking the appointment of an arbitrator. The petitioner and the respondent, Bridge and Roof Company (India) Limited, entered into a contract for manufacturing, supply, laying, and fixing of paver and kerb blocks at the NTPC, Gadarwar Project. The contract value was Rs. 1,32,00,000/- excluding GST. The petitioner alleged that the respondent failed to fulfill its contractual obligations, including providing raw materials on time, adequate stacking space, and timely payment of running bills, leading to project delays and financial losses for the petitioner. The petitioner invoked the arbitration clause (Clause 47) of the General Conditions of Contract by issuing a notice on September 23, 2023. The respondent did not respond, prompting the petitioner to file this application. The respondent was served notice but did not appear before the Court.

Key Issues

1. Whether the Court has the jurisdiction to appoint an arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996, given the specific arbitration clause in the contract? (Question of law) Petitioner's arguments: The petitioner contended that an arbitration agreement exists between the parties as per Clause 47 of the General Conditions of Contract. They argued that the respondent's failure to cooperate and fulfill its obligations constituted a breach of contract, necessitating arbitration. The petitioner followed the procedure outlined in Clause 47 by issuing a notice to invoke arbitration, and since the respondent did not respond, the application under Section 11(6) is maintainable. Respondent's arguments: No arguments were recorded for the respondent as they remained ex-parte.