1 arbap86-06 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION ARBITRATION APPLICATION NO.86 OF 2006 WITH NOTICE OF MOTION NO.847 OF 2007 S.L. Khatri ....Applicant V/s. The Vice Chairman & Managing Director, MSRDC ....Respondent Mr.Uday Sankar Samudrala for the Applicant. Mr.Prashant Chavan with Mr.V.M. Bhate for the Respondent. CORAM : S.J. VAZIFDAR, J. DATE : 26TH AUGUST, 2010. P.C. :- 1. This is an application under section 11 of the Arbitration and Conciliation Act, 1996. The Notice of Motion has been taken out by the Applicant seeking condonation of delay of nine months and twenty days in invoking the arbitration clause. The delay arises on account of specific term in clause 67.3 of the arbitration agreement. 2. There is no dispute that the parties have entered into the contract and the same contains an arbitration clause embodied in clause 67. Clause 67 reads as under :- 67.0 Settlement of Dispute 67.1 If a dispute of any kind whatsoever arises between the Engineer and the Contractor in connection with, or arising out of, the Contract or the execution of the Works, whether during the execution of the Works or after their completion and whether before or after repudiation or 2 arbap86-06 termination of the Contract, including any dispute as to any opinion, instruction, determination, certificate of valuation of the Engineer, the matter in dispute shall, in the first place, be referred in writing to the Engineer within 14 days of occurrence for review with a copy to the Employer. If the contractor fails to refer the dispute for review within 14 days, the Engineer’s decision shall be final and binding on the contractor. Such reference shall state that it is made pursuant to this Clause. No later than the Fourteen days after the day on which he received such reference the Engineer shall give notice of his decision to the Employer and the Contractor. Such decision hall state that it is made pursuant to this Clause. Notwithstanding arises of any dispute, unless the Contract has already been repudiated or terminated, the Contractor shall, in every case, continue to proceed with the Works with all due diligence and the Contractor and the Engineer shall give effect forthwith to every such decision unless and until the same shall have been revised, as hereinafter provided. 67.2 If either the Employer or the Contractor disagrees with the decision of the Engineer, the decision shall then be referred by the employer or by contractor, within 14 days of the Engineer’s Decision to the Steering Committee constituted by the MSRDC Ltd. The Steering Committee shall give its advice in writing within 28 days of receipt of a notification by it. The Steering Committee may call upon the Engineer and Contractor to hear their case before giving its advice. 67.3 If the decision of the Employer reached on consideration of the advice of the Steering Committee is not agreeable to the Contractor, the Contractor shall notify the Employer within 14 days of the receipt of the said decision, failing which the Employer’s decision shall be final and binding on the contractor. The Employer shall then nominated any person, who shall be a retired chief Secretary of Government of Maharashtra, such person to be selected by Managing Director, Maharashtra State Road Development Corporation Limited, as a arbitrator, within 28 days of the receipt of a contractor’s notice for non-acceptance of Employer decision. The arbitrator so nominated shall carry out to arbitration proceedings in, accordance with Arbitration and Conciliation Act, 1996, or any modification thereof, and give his decision in the case within 4 months from the date of reference of dispute to him. The decision the above said arbitrator shall be final 3 arbap86-06 and binding Employed and Contractor. 67.4 Where neither the Employer nor the Contractor has given notice of intention to commence arbitration of a dispute within the period stated in Sub- Clause 67.1 and the related decision has become final and binding, either party may, if the other party fails to comply with such decision, and without prejudice to any other rights it may have, refer the failure to arbitration in accordance with Sub-Clause 67.3. The provisions of Sub- Clause 67.1 and 67.2 shall not apply to any such reference. 3. It was contended by the Respondent that there is nothing left to be decided in view of the fact that the decision of the Respondent has become final under clause 67. I had in another matter on 8.7.2010 passed an oral judgment in Arbitration Application No.100 of 2007, in the case of - M/s.Madhav Structural Engineering Ltd. v. The Vice Chairman & Managing Director, Mumbai, holding that the consequence of a delay under clause 67.1 of the Engineer’s decision becoming final and binding on the Applicant, does not reflect upon or annul the arbitrability of the disputes, and does not affect the jurisdiction of the arbitrator to decide the same. Further it would be open to the Respondent to raise contentions regarding the Engineer’s decision being final and binding on the contractor/Applicant. Whether in the instant case itself it is so or not is for the arbitrator to decide. 4. The same reasoning would also apply to a case under clause 67.3. In other words, the effect of the Respondent’s decision having become final and binding upon the Applicant would be decided by the arbitrator. The delay on the part of the Applicant in notifying the Respondent does not affect the arbitration clause or the jurisdiction of the 4 arbap86-06 arbitrator to decide the issues. 5. The Notice of Motion does not require any consideration. This case does not fall within the ambit of section 43(3) of the Arbitration and Conciliation Act, 1996. Section 43(3) of the said Act cannot be invoked to deprive the Respondent of a right regarding the finality of its decision on account of the said delay on the Applicant’s part under clause 67.1. 6. The Notice of Motion is therefore, dismissed. 7. The arbitration application however is allowed. The Respondent shall appoint an arbitrator in accordance with clause 67 and in particular clause 67.3 within twelve weeks from the date of receipt of the certified copy of this order. No order as to costs.