(Prayer: Petitions filed under Section 11 (6) of the Arbitration and Conciliation Act, 1996, to constitute an arbitral tribunal consisting of a sole Arbitrator as agreed by the parties under the Arbitration Agreement dated 01.10.2009 and 20.02.2010 respectively.)
1. The petitioner has filed the petitions under Section 11 (6) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the said Act') in respect of disputes which have arisen inter se the parties, in respect of agreements dated 01.10.2009 and 20.02.2010 respectively. The petitioner was awarded the contracts by the respondent i.e., 1) for providing and enabling, supply erection of Fire Protection and Utility system at the engineering college of the respondent for a contract value of Rs.6,38,21,930/- and 2) for plumbing and sanitary work for a contract value of Rs.1,23,44,127/-. It is the case of the petitioner that the invoices were raised, but the full payment has not been made, consequent to which the arbitration notices were issued on 29.02.2016 through counsel.
2. Learned counsel for the respondent relying on the counteraffidavit raises a dual defence: (1) the arbitration petitions are premature as the mutual settlement clause has not been given effect to; and (2) the claim is a stale one and is ex facie barred by time.
3. In so far as the first plea is concerned, learned counsel for the respondent refers to clause 16, which is the settlement of disputes/claims/remedies clause more specifically Clauses 16.4 and 16.5. In both the cases, the clauses are the same and hence, the clauses in O.P.No.335 of 2016 are re-produced as under:
''16.4.If for any reason VRT and the CONTRACTOR are unable to resolve a claim for an adjustment, the CONTRACTOR shall notify VRT in writing that a dispute exists and request a final determination by VRT. VRT and the CONTRACTOR will meet for negotiations at a mutually agreed time and place. The Parties shall endeavor to settle the claim through discussions between the Parties' duly appointed representatives. It is agreed by the Parties that if the matter does not get resolved within 15 (fifteen) calendar days from the commencement of such negotiations, the Parties shall consider resolution of the dispute through arbitration.
16.5. All disputes and differences of any kind whatsoever arising out of or in connection with this Agreement that is not resolved as per Article 16, shall be dealt with as per the Arbitration and Conciliation Act, 1996. The arbitration shall be at Chennai and the proceedings shall be held in English.''
4. It is the submission of the learned counsel for the respondent that Clause 16.4 has not been given effect to for purpose of resolution of dispute.
5. On the other hand, learned counsel for the petitioner has drawn the attention of this Court, inter alia, to the letter dated 24.10.2015 requesting for release of payment and endeavouring to settle the dispute, but to no avail. The said letter ends with ''We hope you understand our situation and give us your convenient date to meet and close this issue at the earliest.''
6. In my considered view, the aforesaid shows that it is not as it Clause 16.4 was not resorted to, but on the other hand, the mechanism envisaged under Clause 16.4 ultimately failed and thus, Clause 16.5 would come into operation.
7. The second plea of limitation arises from the letter dated 01.07.2014, in which the date of the invoice is given as 11.02.2013, while the last date of payment is given as 01.08.2012. In respect of another invoice dated 14.02.2013, the last date of payment is given as 11.05.2012.
8. Learned counsel for the petitioner points out that the trigger for the arbitration ultimately arose when the respondent sought a 'no due certificate', while actual payment was outstanding and such a letter was issued on 30.06.2014.
9. I am of the view that this is not a matter where at the threshold the claim can be rejected as barred by time. This issue would have to be decided on trial.
10. In view of the aforesaid facts and circumstances, both the objections are rejected.
11. Learned counsel for parties state that a retired District Judge may be appointed as the Sole Arbitrator to enter upon reference and adjudicate the disputes inter se the parties. 12.I, thus, with consent of parties, appoint Mr.J.Krishnamoorthy, a retired Judicial Officer, as the Sole Arbitrator to enter upon the reference and adjudicate the disputes inter se the parties in both the cases. As requested, the arbitration proceedings will be conducted under the aegis of the Madras High Court Arbitration Centre and the parties will be governed by the Rules of the Centre.
13. The original petitions are, accordingly, allowed, leaving the parties to bear their own costs.