MANU/TN/1207/2016

IN THE HIGH COURT OF MADRAS

Original Petition No. 63 of 2016

Decided On: 01.07.2016

Appellants: Rockwell Automation India Pvt. Ltd.
Vs.
Respondent: ETA Engineering Pvt. Ltd.

Hon'ble Judges/Coram:
Sanjay Kishan Kaul

ORDER

Sanjay Kishan Kaul, C.J.

1. The Chennai Metro Rail Ltd., in its Phase-I of the Chennai Metro Rail Project, invited bidders for carrying on Design, Manufacture, Verification, Delivery, Installation, Testing, Commissioning etc., qua the Integrated Tunnel Ventilation System. The respondent herein was selected as a pre qualified bidder and was ultimately selected as successful bidder by award of the contract with the authority to assign, delegate the contract work to sub-contractors subject to the approval of the Chennai Metro Rail Limited. In furtherance of the project of sub-contracting of the work, the respondent obtained quotations from the petitioner, who is stated to have completed the work in respect of Dubai Metro and Delhi Airport Metro line. The quotation is stated to have been submitted on 04.04.2012 and the contract was ultimately entered into on 24.05.2012.

2. It is not necessary to go into the details of the execution of the work, but suffice to say that an amended contract was entered into on 28.09.2013 inter se the parties with the petitioner executing an advance bank guarantee for Rs. 57,89,434/- issued by the Bank of America valid till 31.12.2014.

3. There was also a further sub-contract agreement entered into between the petitioner and ''12ST'', on terms and conditions contained therein after approval of the respondent.

4. In the execution of the works, disputes have arisen inter se the parties in respect of payments to be made by the respondent to the petitioner and the petitioner actually puts the blame on the respondent which is equally true qua the petitioner in respect of stand of the respondent and the disputes could not be resolved amicably. There was exchange of correspondence inter se the parties with the petitioner claiming right to seek appointment of an Arbitrator to adjudicate the disputes inter se the parties. While on the other hand, the respondent took the stand that the settlement of dispute Clause inter se the Chennai Metro Rail Ltd., and the respondent was never incorporated in the agreement inter se the two parties. Thus, the occasion of appointing either the Adjudicator first followed by appointment of Arbitrator did not arise.

5. The petitioner preferred different Original Applications seeking interim reliefs under Section 9 of the Indian Arbitration and Conciliation Act, 1996. Those applications are stated to be pending with no interim orders.

6. The respondent has resisted the present application filed by the petitioner under Section 11(5) of the Arbitration and Conciliation Act, 1996.

7. In a nutshell, the defence as set out therein is that there is no arbitration Clause inter se the parties.

8. Learned counsel for the petitioner, in the course of proceedings held on 17.06.2016, had contended that the Arbitration Clause stood incorporated into the agreement inter se the parties. To support this plea, learned counsel for the petitioner relied on Clause - 5.0 of the contract inter se the parties, which reads as under:

"5.0. BASIS OF CONTRACT

The price for subject work shall be based on the enclosed document as given below and relevant scope of TVS SCADA system. The documents mentioned in this table including Annexure 6 shall form the CONTRACT AGREEMENT:

9. In the contract executed inter se the parties, amendments were incorporated to the General Conditions of the Contract and Special Conditions of Contract, and the submission of the learned counsel for the petitioner is that the Arbitration Clause is not one of the Clauses which stand modified or removed from the contract inter se the parties.

10. On the other hand, the submission of the learned counsel for the respondent was that when Clause 5.0 itself is relatable only to the aspect of determination of price, how could the same come to the aid of the petitioner.

11. On hearing the learned counsel for the parties, by a short order dated 17.06.2016, the aforesaid controvers........