S AND S TECHNOCRATS PRIVATE LIMITED  Vs CLASSIC INFRASOLUTIONS PRIVATE LIMITED

ARB.P. 322/2020 Page 1 of 8
$~12 (original side)
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ ARB.P. 322/2020 & I.A. 10108/2020
S AND S TECHNOCRATS PRIVATE LIMITED ….. Petitioner
Through: Mr. Dhruv Rohatgi, Adv.

versus
CLASSIC INFRASOLUTIONS PRIVATE LIMITED
….. Respondent
Through: Mr. Anil Kr. Singh, Adv.

CORAM:
HON’BLE MR. JUSTICE C. HARI SHANKAR

% 18.01.2021 O R D E R (ORAL)

1. This is a petition under Section 11(6) of the Arbitration and
Conciliation Act, 1996 (hereinafter referred to as “ the 1996 Act”) for
reference of the disputes, between the petitioner and the respondent, to
arbitrat ion.

2. The bare facts, insofar as they are relevant for the purposes of
the present order, may be set out thus:

(i) On 4th May, 2015, an agreement was executed between
the petitioner and the respondent, for executing the finishing
works for the “ Paras Irene -Tower -N-6 & Tower -N-7” project of
the respondent at Sector -70A, Gurgaon, Haryana. On the same
day, i.e. 4th May, 2015, a separat e work order agreement,
bearin g No. CIPL/IRENE/ FINISHING/WO/ 85 was also
2021:DHC:203ARB.P. 322/2020 Page 2 of 8
executed between the petitioner and the respondent.

(ii) For ease of reference, the former agreement would be
referred to as the “parent agreement”.
(iii) Mr. Dhruv Rohatgi, learned counsel appearing for the
petitioner, drew my attention to Clause 8 in the parent
agreement, which reads thus:
“8. The following documents shall form, and be
read and construed as, an integral part of this
Agreement, viz.

i. Detailed Work Order Agreement Vide
Ref. No. CIPL/IRENE/FINISHING/WO/8 5,
dated 04.05.2015, issued by CLIENT.

ii. Letter of intent Vide Ref. No. NIL issued
by CLIENT
iii. Accepted mobilization schedule.
Words and expression used, but not defined herein
shall have the meanings given to them in the
documents.”

As has been correctly pointed out by Mr. Rohatgi, Clause 8 of
the parent agreement clearly states that the work agreement, to
be execute d thereunder, would be treated as an integral part of
the parent agreement.

(iv) The petition alleges that there was delay, on the part of
the re spondent, in making payment against the R unning
Account Bills raised by the petitioner, resulting in obstruction in
carrying the work under the parent agreement.
2021:DHC:203ARB.P. 322/2020 Page 3 of 8

(v) Nevertheless, it is stated that, after the work was
completed, the petitioner submitted its final bill on 16th

February, 2018, for a sum of ₹ 28,46,505/ -, which, it is alleged,
has not been paid. Additionally, it is asserted that the respondent
is bound to refund, to the petitioner, retention money of ₹
13,01,820/-, in respect of the work executed by the petitioner.
(vi) It is further averred that , against a second work order
agreement dated 16th
May, 2015, the respondent is liable to
refund an amount of ₹ 6,17,082/ -. As such, the total claim of
the petitioner works out to ₹ 47,65,406/ -.
(vii) Clauses 9 (d) & (e) of the parent agreement, which
provide for resolution of the disputes relating thereto, read thus:
“(d) All disputes and differences of any kind
whatsoever arising out of or in connection with this
Contract as also with regards to the implementation,
meaning, interpretations of the various clause of the
Contract and those of the Contract Documents or in
respect of any other matter or thing arising out of or
relating to the development and construction of the
proposed project whether during the progress of the
work or after its completion shall be communicated by
the Contractor in writing to the Project Manager and
all possible efforts would be made by the parties to
sort out and resolve all such matters of controversy,
disputes and differences, amicably with due dispatch
and effective priority . In case, the Contractor and the
Project Manager are unable to resolve such issue
amiably latest within 21 working days from the date of
receipt of such communication by the Project
Manager, then the same shall be settled by way of
Arbitration as per Arbitration and Reconciliation Act,
1996 (Revised) as discussed in Clause No. 30 of
2021:DHC:203ARB.P. 322/2020 Page 4 of 8
General Conditions of Contract.

(e) Subject to the provisions of this Contract and
for such matters which the Court may have jurisdiction
under and in respect of any arbitration proceedings,
and subject further to applicable laws in this regard,
this Contract shall be subject to the exclusive
jurisdiction of the Courts in Delhi.”
(Emphasis supplied)

3. Before proceeding further, it would be appropriate to advert to a
preliminary objection, raised by Mr. Anil Kr. Singh, learned counsel
for the respondent.

4. Mr. Singh contends that the present petition is not maintainable
before this Court, as “courts at Gurgaon ” would have exclusive
jurisdiction to adjudicate on the matter. He place d reliance, for the
said purpose, on Clause 18 of the work order agreement dated 4th
“18. Termination of Order: May,
2015, which reads thus:

If Client feels at any point of time that contractor is not
capable to complete the work at the required pace
and/or maintaining the quality standard set up by the
clients, then Client may terminate the contract by
giving 7 days written notice to this effect.

Recoveries upon Termination: In the event of the
contractor’s failure to perf orm the Work as set out
herein, Client shall have the right to terminate this
Work Order and shall have the right to recover the dues
from contractor, these recoveries shall also include by
contractor’s security deposit/retention money, unpaid
bills, equipment/machinery lying at site

Settlement of Disputes: Any dispute arising out of this
work order shall be settled as per terms & conditions of
this work order. In case of failure to settle amicably,
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the dispute shall be finally resolved in accordance with
the Arbitration & Conciliation Act, 1996 by sole
Arbitrator to be nominated (including nomination of replacement Arbitrator, if necessitated by vacancy of
the post caused by any reason whatsoever) by the
Client. The venue for arbitration shall be Gurgaon.
This sub contract is governed as per the Laws of India
and the jurisdiction of only Gurgaon Courts shall
apply.”

5. Mr. Rohatgi has, in response to this objection of Mr. Anil Kr.
Singh, pointed out that by virtue of Clause 8 of the parent agreement,
the work order agreement is an integr al part of the parent agreement.
Besides, he submits that Clause 18 of the work order agreement, merely stipulates the “venue of arbitration” as Gurgaon. The allusion
to jurisdiction of Gurgaon courts, in the submission of Mr. Rohatgi,
cannot divest this C ourt of jurisdiction to entertain the present petition
under Section 11 of the 1996 Act.

6. In my opinion, it cannot be said that Mr Singh has been able to
make out a case for non-suiting the petitioner on the ground of
territorial jurisdiction. Clause 9(e) of the parent agreement clearly
states that, in respect of arbitration proceedings, courts in Delhi would
have jurisdiction .

7. A harmonious reading of Clause 9(d) of the parent agreement
and Clause 18 of the work order agreement would seem to indicate that the jurisdiction of Gurgaon courts is in respect of the subject
matter of the dispute, and not with respect to arbitration. In any event, so far as arbitration is concerned, Clause 9(e) of the parent agreement
clearly states that Delhi courts would have jurisdiction. The work
2021:DHC:203ARB.P. 322/2020 Page 6 of 8
order agreement is, by virtue of Clause 8 of the parent agreement, an
integral part thereof . Seen thus, Clause 9(e) of the parent agreement
and Clause 18 of the work order agreement are part of the same
contract. They cannot, the refore, be read as discordant with each
other. Clause 9(e) of the parent agreement being a specific
dispensation governing the jurisdiction of the court “in respect of arbitration”, Clause 8 of the work order agreement cannot come to the
aid of the respon dent.

8. In any event, in view of Clause s 8 and 9 (e) of the parent
agreement, no case for throwing out the present petition on the ground
of territorial jurisdiction, can be said to exist.

9. Adverting, now, to Clause 9 (d) of the parent agreement, a
reading t hereof reveals that, prior to initiating arbitration proceedings,
the parties are required to attempt ami cable resolution of the disputes.
Significantly, however, the provision does not specifically
contemplate issuance of a notice, seeking such amiable re solution, by
one party to the other. Instead, it states that, in case the Contractor and
Project Manager are unable to resolve the dispute amicably within 21
days from the date of receipt of “such communication” by the Project
Manager, the same would be se ttled by way of arbitration. The word
“such communication”, as used in the said clause, obviously relate s to
the communication, by the Contractor to the Project Manager, of the
Contractor’s claims.

10. Mr. Rohatgi, learned counsel for the petitioner -Contra ctor,
2021:DHC:203ARB.P. 322/2020 Page 7 of 8
points out that the final bill was raised by the petitioner on 16th
February, 2018 whereafter, vide communication dated 2nd June, 2018
and 7th July, 2018, the respondent wrote back to the petitioner calling
on the petitioner to accept the deductions made by the respondent for
the final bill of the petitioner. The petitioner rejoined to this request
vide communication dated 11th July, 2018, protesting against the
recoveries effected from its bill. This was followed by emails dated
17th June, 2020 and 25th June, 2020 , whereafter notice invoking
arbitration was issued by the petitioner only on 9th
July, 2020.
11. No amicable resolution of the dispute, therefore, took place,
within the period of 21 days contemplated by Clause 9(d) of the parent
agreement. In any event, at this distance of time, when over two years and a half have elapsed since 11
th
July, 2018, when the petitioner
objected, in writing, to the deductions made by the respondent from its final bill, no scope, for attempting an amicable resoluti on of the
dispute, remains.
12. In view thereof, I am of the opinion that the petitioner has
approached this Court at the appropriate stage, after having exhausted
its remedies under the parent agreement, and after failure of the
arbitral process contemplated thereby , as required by Section 11(6) of
the 1996 Act.

13. Mr. Singh, learned counsel for the respondent, acknowledges
the fact that, in the reply filed, no other ground, opposing the
appointment of arbitrator , has been raised, but pra ys that liberty may
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be reserve d to take up all these grounds, including the jurisdiction of
the learned arbitrator to adjudicate on the dispute, before the arbitrator.

14. In view thereof, I am of the opinion that the arbitral procedure
stipulated in the parent agreement having failed, this Court is required
to appoint the arbitrator.

15. Accordingly, I appoint Mr. Jugal Wadhwa, Advocate (Mob.:
9810036560 ) as the sole arbitrator to arbitrate on the dispute between
the parties. The learned arbitrator would be entitled to fees in ter ms of
the Fourth Schedule to the 1996 Act.

16. The sole arbitrator would file the requisite disclosure under
Section 12(2) of the 1996 Act within a week of entering on the reference.

17. The parties are directed to contact the sole arbitrator within one
week from receipt of a copy of this order by e -mail from the Registry
of this Court.

18. The present petition is allowed in the aforesaid terms, with no
order s as to costs.

C. HARI SHANKAR, J .
JANUARY 18, 2021
dsn

2021:DHC:203