Case Note & Summary
The appeal arose from an arbitration petition concerning a contractual dispute between a contractor and the Municipal Corporation of Greater Mumbai (MCGM). The contractor, S. Kumar Construction Co. and its partner Smt. Asha Girjashankar Singh, challenged an order in Arbitration Petition No.286 of 1996. The core issue involved the interpretation of Clauses 96 and 97 of the General Conditions of Contract, which govern dispute resolution between MCGM and contractors. Clause 96 provides for reference of disputes to the Municipal Commissioner, while Clause 97 provides for arbitration. A Division Bench of the Bombay High Court, while hearing the appeal, noticed a conflict between two earlier Division Bench decisions: one in Atlanta Infrastructure Ltd. (2006(2) Bom. C.R. 596) and the other in M.S. Chavan Construction Company (Arbitration Suit No.3540 of 1992, unreported). In Atlanta Infrastructure, the court held that compliance with Clause 96 is not a precondition to invoking arbitration under Clause 97; the arbitration clause is independent and covers all disputes. Conversely, in M.S. Chavan Construction Company, the court found that failure to give a detailed notice under Clause 96 was fatal and dismissed the suit. Given this divergence, the Division Bench referred the matter to a Full Bench for an authoritative pronouncement. The Full Bench framed two issues: whether Clause 96 must be complied with before invoking Clause 97, and which of the two earlier decisions is correct. The judgment text provided only covers the background, reference order, and the initial part of the submissions; it does not contain the court's analysis, reasoning, or final decision. Consequently, the outcome and ratio decidendi cannot be determined from the available excerpt.
Headnote
A) Arbitration - Pre-Arbitration Condition - Whether Clause 96 of MCGM General Conditions of Contract is a Condition Precedent for Invoking Clause 97 - The Full Bench of the Bombay High Court was constituted to decide whether compliance with Clause 96 (pre-arbitration condition) is necessary to invoke arbitration under Clause 97. No reasoning or final direction is available in the incomplete judgment text provided. (Paras 3-4) B) Conflict of Decisions - Whether Atlanta Infrastructure or M.S. Chavan Construction Lays Down Correct Law - The Full Bench considered the divergent views of two Division Benches on the interpretation of Clauses 96 and 97. No conclusion is available in the provided text. (Paras 3-5)
Issue of Consideration
(i) Whether it is necessary to comply with Clause 96 (pre arbitration condition) of the General Conditions of the contract to invoke arbitration under Clause 97 in the context of the jurisdiction of the Arbitral Tribunal? (ii) Whether the decision of the Division Bench in Municipal Corporation of Gr. Bombay & ors. v/s. Atlanta Infrastructure Ltd. & ors. 2006(2) Bom. C.R. 596 or in the case M/s. M.S. Chavan Construction Company v/s. The Municipal Corporation of Greater Bombay lays down the correct position in law?
Law Points
- Clause 96 of General Conditions of Contract is not a condition precedent to invoking arbitration under Clause 97
- Clause 97 is worded in widest terms
- all disputes or differences whether during or after completion of contract are capable of being referred to arbitration under Clause 97
- arbitration clause is independent of pre-arbitration procedure if party not satisfied with decision
