IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE PIUS C.KURIAKOSE FRIDAY, THE 1ST FEBRUARY 2008 / 12TH MAGHA 1929 AR.No. 19 of 2007 ------------------- APPLICANT -------------------------- M.N.B.NAIR, CONTRACTOR, AMBATTU, AMBALAMUGAL P.O. BY ADV. SRI.K.L.VARGHESE SMT.SANTHA VARGHESE RESPONDENTS: OPPOSITE PARTY --------------------------- THE FACT ENGINEERING AND DESIGN ORGANISATION, UDYOGAMANDAL- 683 501, REPRESENTED BY THE CHAIRMAN & MANAGING DIRECTOR. BY ADV. SRI.A.M.SHAFFIQUE SRI.E.K.NANDAKUMAR SRI.A.K.JAYASANKAR NAMBIAR SRI.JOSON MANAVALAN THIS ARBITRATION REQUEST HAVING BEEN FINALLY HEARD ON 01/02/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: PIUS C. KURIAKOSE, J. A.R. NO. 19 OF 2007 DATED THIS THE 1st February 2008 ORDER This application has been filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 seeking appointment of an Arbitrator in accordance with law by a Contractor to the respondent company in respect of the work of “Implementation of Hazardous Waste landfill for FACT – Primary and Secondary Leachate Collection Layers” under Work Order No.32180-C0506 dated 13-12-2005 which was followed by execution of a formal agreement. It is submitted that as per the contract, the work costing Rs.13,55,000/- had to be completed within four months from the date of handing over the site, whereas the respondent was not able to handover the site for more than an year. In the meanwhile whatever materials to be supplied had been supplied by the applicant. Undisputedly, the respondent could not hand over the site or give facilities to do the work since another agency who had to do part of the job had not done so. In the A.R.NO. 19/2007 -2- meanwhile, the cost of construction increased disproportionately high and the applicant sought for enhancement of rates. Though the respondent convened a meeting and gave an impression that enhancement of rates would be recommended ultimately, the request for enhancement of rates was turned down and the contract was terminated followed by encashment of Bank Guarantee amount of Rs.1,35,500/- and withholding of final bill amount of Rs.5,83,060/-. The disputes having thus arisen are liable to be settled in arbitration. Article 41 of the Proforma Contract is an arbitration clause. Article 41 which is extracted in the application would show that the Chairman & Managing Director of the respondent Company is the nominated Arbitrator. Since the respondent was not prepared to refer the dispute in arbitration in that regard, the applicant has invoked the appointment procedure contemplated by Section 11(6) of the Arbitration and Conciliation Act. Even though several chances were given to the respondent for filing counter affidavit, till this moment the counter affidavit has not been filed. The averments in the application stand established. A.R.NO. 19/2007 -3- The result is that the Arbitration Request will stand allowed. Sri. S.Sainudheen, the retired District & Sessions Judge is appointed as Arbitrator to settle the disputes between the parties which are subject matters of Annexure-A1 claim notice. The Arbitrator will also settle the counter claims, if any, which were raised by the respondent through their claim statement. The Arbitrator will enter on reference at his earliest and pass award without undue delay. PIUS C. KURIAKOSE, JUDGE ks A.R.NO. 19/2007 -4- This application has been filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 to appoint an Arbitrator in accordance with law by the applicant, who is Contractor to the respondent company in respect of the work of “Implementation of Hazardous Waste landfill for FACT – Primary and Secondary Leachate Collection Layers” under Work Order No.32180-C0509 dated 19-1-2006 which was followed by execution of a formal agreement. It is submitted that as per the contract, the work costing Rs.14,93,500/- had to be completed within four months form the date of handing over the site, whereas the respondent was not able to handover the site for more than a year. In the meanwhile whatever materials to be supplied had been supplied by the applicant. Undisputedly, the respondent could not hand over the site or give facilities to do the work since another agency who had to do part of the job had not done so. In the meanwhile, the cost of construction increased disproportionately A.R.NO. 19/2007 -5- high and the applicant sought for enhancement of rates. Though the respondent convened a meeting and gave an impression that enhancement of rates would be recommended ultimately, the request for enhancement of rates was turned down and the contract was terminated followed by encashment of Bank Guarantee amount of Rs.1,49,3,50/- and withholding of final bill amount of Rs.1,46,296/-. The disputes having thus arisen are liable to be settled in arbitration. Article 41 of the Proforma Contract is an arbitration clause. Article 41 is extracted in the application which would show that the Chairman & Managing Director of the respondent Company is nominating Arbitrator. Since the respondent was not prepared to refer the dispute in arbitration in that regard, the applicant has invoked the appointment procedure contemplated by Section 11(6) of the Arbitration and Conciliation Act. Even though several chances were given to the respondent for filing counter affidavit, till this moment the counter affidavit has not been filed. The averments in the application stands established. The result is that the Arbitration Request will stand A.R.NO. 19/2007 -6- allowed. The retired District & Sessions Judge........ is appointed as Arbitrator to settle the dispute between the parties which is subject matter of Annexure-A1 claim notice. The Arbitrator will also settle the counter claims, if any, which were raised by the respondent through in their claim statement. The Arbitrator will enter on reference at his earliest and pass the award without undue delay. PIUS C. KURIAKOSE, JUDGE ks A.R.NO. 19/2007 -7-