THE HON'BLE SRI JUSTICE B.SESHASAYANA REDDY Arbitration Application No.60 of 2011 9th September, 2011 Between :- M/s.Saradambika Power Plant Pvt.Ltd., Rep.by its Director Mr.Satya S.Boyina .. Applicant And M/s.Greensol Power Systems Pvt.Ltd., Rep.by its Managing Director – JSR Prasad And another .. Respondents THE HON'BLE SRI JUSTICE B.SESHASAYANA REDDY Arbitration Application No.60 of 2011 ORDER:- This application has been taken out by M/s.Saradambika Power Plant Pvt.Ltd., represented by its Director Mr.Satya S.Boyina under sub-sections (5) and (6) of Section 11 of the Arbitration and Conciliation Act, 1996 read with para 3 (i)(c) of the Scheme for Appointment of Arbitrators, 1996, seeking appointment of an Arbitrator for resolution of the disputes relatable to agreements dated 3-3-2007, 3-3-2007, 30-6-2007 and 1-6-2007 and Memorandum of Understanding dated 4-10-2010. The applicant is a Power Generating Company engaged in the business of generating of power and sale of the same. The applicant and the respondent entered into agreements vide Agreement No.06- 07/SPPPL/GPSPL/STG/SUPPLY, dated 3-3-2007; Agreement No.SPPPL/GPSPL/BLR/SUPPLY, dated 3-3-2007; Agreement No.SPPPL/GPSPL/STG/E&C/0607, dated 30-6-2007; and Agreement No.SPPPL/HYD/06-07/1023, dated 1-6-2007, for supply, erecting and commission of plant at Chimur village, Chandrapur District, Maharashtra State, on turn key basis for establishing 10 Mega Watts Bio-mass Power Plants at Plot No.B1, MIDC, Chimur village, Chandrapur District, Maharashtra State. The scope of works which the respondents have to carry out has been detailed in the agreements. According to the applicant, the machinery supplied, erected and commissioned by the respondent under the tripartite agreements are found to be defective. The applicant and the respondent entered into Memorandum of Understanding on 4-10-2010 whereunder the respondent agreed to rectify the defects on payment of Rs.50,00,000/- for completing the works. The applicant paid Rs.50 lakhs so that the respondent would rectify the defects. Despite receiving the amount, the respondents have not completed the works. The applicant got issued notice dated 11-4-2011 invoking the arbitration clause, the agreements for resolution of the disputes and differences arising out of the agreements and the MOU dated 4-10- 2010. The respondents did not act on the said notice nor nominated arbitrator on their side. The arbitration clause in the agreements stipulates two arbitrators, one nominated by each party, the two arbitrators shall thereafter choose an umpire to constitute Arbitration Tribunal. The arbitration clause in the agreements reads as hereunder:- SETTLEMENT OF DISPUTES/DISPUTE RESOLUTION: a. Consultation: i) In the event of any dispute, controversy or claim arising out of or relating to any provision of this Agreement, or the interpretation, enforceability, performance, breach, termination or validity hereof, including without limitation, the interpretation of this Article (a “Dispute”) the parties shall attempt, in good faith, to amicably resolve the Dispute. Either Party may give the other Party Written notice of any Dispute not resolved in the normal course of business, within Twenty (20) days after the receipt of any such notice, the chairperson of Saradambika Power Plant Pvt.Ltd., or their authorized representative shall negotiate in good faith to resolve the Dispute. ii) If the relevant individuals are successful, the parties shall take all action necessary to ensure that their resolution of the Dispute is implemented in a manner consistent with all requirements of the Laws of India. If the Dispute has not been resolved within iii) Sixty (60) days of the receipt of the disputing party’s notice by other party, or if the other Party does not meet the other party within twenty (20) days of its receipt of such notice, either Party may submit the Dispute to arbitration as provided in Article of this Agreement. If the Chairperson of a Party intends to be accompanied at a meeting of the Parties by an attorney, the Chairperson of the other Party shall be given at lest Five (5) business days notice b. Submission to Arbitration: i) Any Dispute that is not resolved within Sixty (60) days of the receipt of the Disputing Party’s notice by the other Party, or that may otherwise be referred to arbitration, shall be solely and finally settled by arbitration according to the Arbitration and Conciliation Act, 1996 in force at that time. ii) Each party shall appoint one Arbitrator and these two 92) Arbitrators so appointed shall jointly agree on and appoint the third Arbitrator. If the two (2) Arbitrators appointed cannot agree on a third Arbitrator, the third Arbitrator shall be appointed in accordance with the provisions of the Arbitration and Conciliation Act, 1996. The language of arbitration shall be English. iii) The award of the Arbitrator (s) shall be the sole and exclusive remedy between the Parties regarding any and all claims and counterclaims with respect to the subject matter of the Dispute and shall be binding and conclusive upon the Parties, their successors and assigns and each shall comply in good faith with any and all rulings of the Arbitrators; iv) Judgment upon the Award of the Arbitrators may be entered in any Court for competent jurisdiction. The applicant issued a notice 11-4-2011 nominating Sri D.Srinivasa Rao, Sr.Structural Engineer, as Arbitrator on its behalf. There being no response to the notice, the applicant has filed this application. Notices to respondents came to be ordered on 20-7-2011. The applicant was permitted to take out notices to the respondents by Registered Post with Acknowledgment Due. The applicant took out notices to the respondents and filed proof of service vide Memo dated 10-8-2011. Sri Seshadri Naidu, learned Counsel representing Sri J.N.Bhushan, learned Counsel for respondents 1 and 2 reports no objection for appointment of Arbitrator on behalf of the respondents. In that view of the matter, the application is allowed. No costs. Sri Justice T.Ch.Surya Rao, a retired Judge, High Court of Andhra Pradesh, is appointed as arbitrator on behalf of the respondents. He shall fix his own fee. _________________________ B.Seshasayana Reddy, J 9th September, 2011 smr