Case Note & Summary
The applicants, BSI-JDN Joint Venture and others, filed four applications under Section 11 of the Arbitration and Conciliation Act, 1996, seeking appointment of an arbitral tribunal to adjudicate disputes arising from a contract dated 28 April 2017 with the respondent, the Board of Trustees of the Jawaharlal Nehru Port Trust. The contract was for deepening and widening of Mumbai Harbour Channel and JN Port Channel (Phase-II). The applicants completed the work in February-March 2019, ahead of schedule. Under Clause 48.1 of the General Conditions of Contract, a Taking Over Certificate (TOC) was to be issued by the Engineer with the respondent's approval within 21 days of the completion notice. The applicants issued the completion notice, but the respondent withheld approval of certain invoices and failed to issue the TOC. The respondent issued an Interim Payment Certificate (IPC) for Rs.100.72 crores on 25 March 2019, but payment was not made within the contractual 21 days. Disputes arose regarding non-payment of IPC Nos. 12, 13, 14 and failure to issue TOC. The applicants invoked the arbitration clause, but the respondent did not appoint an arbitrator, leading to these applications. The court considered whether the disputes were arbitrable and whether an arbitrator should be appointed. The court held that the disputes are arbitrable and the arbitration agreement exists, and appointed an arbitral tribunal to adjudicate the disputes.
Headnote
A) Arbitration Law - Appointment of Arbitrator - Section 11 of the Arbitration and Conciliation Act, 1996 - Existence of Arbitration Agreement - The court examined whether disputes regarding non-payment of Interim Payment Certificates and failure to issue Taking Over Certificate fall within the scope of the arbitration clause. Held that the disputes are arbitrable and the arbitration agreement exists, warranting appointment of an arbitral tribunal (Paras 1-3).
Issue of Consideration
Whether disputes between the parties regarding non-payment of Interim Payment Certificates and failure to issue Taking Over Certificate are arbitrable and warrant appointment of an arbitral tribunal under Section 11 of the Arbitration and Conciliation Act, 1996.
Final Decision
The court allowed the applications and appointed an arbitral tribunal to adjudicate the disputes between the parties.
Law Points
- Arbitration agreement exists
- disputes are arbitrable
- Section 11 of the Arbitration and Conciliation Act
- 1996
- appointment of arbitrator
Case Details
2022 LawText (BOM) (06) 41
Commercial Arbitration Application No. 140 of 2020 with Commercial Arbitration Application No. 1 of 2021, Commercial Arbitration Application No. 2 of 2021, Commercial Arbitration Application No. 3 of 2021
Mr. Naresh Thacker with Mr. Alok Jain, Mr. Samarth Saxena and Ms. Sharmin Kapadia i/b. Economic Laws Practice, Advocate for the Applicants. Mr. Omprakash Jha a/w. Ms. Shivani Kumbhojkar i/b. The Law Point, Advocate for the Respondent/JNPT.
BSI-JDN Joint Venture & Ors.
The Board of Trustees of the Jawaharlal Nehru Port Trust
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Nature of Litigation
Commercial arbitration application under Section 11 of the Arbitration and Conciliation Act, 1996 for appointment of arbitral tribunal.
Remedy Sought
Appointment of an arbitral tribunal to adjudicate disputes arising from a contract.
Filing Reason
Disputes regarding non-payment of Interim Payment Certificates and failure to issue Taking Over Certificate.
Issues
Whether disputes regarding non-payment of Interim Payment Certificates and failure to issue Taking Over Certificate are arbitrable.
Whether an arbitral tribunal should be appointed under Section 11 of the Arbitration and Conciliation Act, 1996.
Submissions/Arguments
Applicants contended that the respondent breached contractual obligations by withholding approval of invoices and failing to issue TOC and make payments.
Respondent argued that issuance of TOC was under examination and disputes were not arbitrable.
Ratio Decidendi
Disputes regarding non-payment of Interim Payment Certificates and failure to issue Taking Over Certificate are arbitrable under the arbitration clause in the contract, and the court has power to appoint an arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996 when the respondent fails to do so.
Judgment Excerpts
These are four applications filed under Section 11 of the Arbitration and Conciliation Act,1996 (for short ‘the Act’) whereby the applicants have prayed for appointment of an arbitral tribunal to adjudicate the disputes and differences which have arisen between the parties under the contract dated 28 April 2017 titled as 'Deepening and Widening of Mumbai Harbour Channel and JN Port Channel (Phase-II)'.
The applicants contend that the disputes between the parties have arisen in relation to non-payment of Interim Payment Certificate Nos.12, 13, 14; for failure to accord approval to the Engineer for issuance of Taking Over Certificate (TOC);
Procedural History
The applicants filed four applications under Section 11 of the Arbitration and Conciliation Act, 1996 seeking appointment of an arbitral tribunal. The respondent did not appoint an arbitrator despite invocation of arbitration clause. The court heard the applications and passed judgment on 9 June 2022.
Acts & Sections
- Arbitration and Conciliation Act, 1996: Section 11
