M/A Psa Mumbai Investments Pte. Limited vs The Board Of Trustees Of The Jawaharlal ...

2. The factual matrix in which the present matter arises is that the Respondent No.1 issued a Global Invitation of Request for Qualification (hereinafter referred to as “RFQ”) in March, Digitally signed by R NATARAJAN Date: 2018.09.14 2009 inviting applications from interested persons for the 17:07:18 IST Reason: development of the 4th Container Terminal Project on Design, 1 Build, Finance, Operate and Transfer Basis at Jawaharlal Nehru Port. The RFQ document of 02.03.2009 expressly contained a clause by which the bidder could be a Single Entity or a Consortium. On facts, the appellant and the Respondent No.2 before us together formed a Consortium with the appellant as the Lead Member, Technical Member and Financial Member of the Consortium. It may be pointed out at this stage that the appellant is a Company registered in Singapore, whereas Respondent No.2 is a Company registered in India.

The two Arbitrators so appointed shall appoint the third Arbitrator who shall act as the ‘Presiding Arbitrator’. If the other Party fails to appoint a second Arbitrator within 30 (thirty) days from the receipt of the request to do so, then the Arbitrator so appointed by the first party shall adjudicate the disputes as ‘Sole Arbitrator’.

7) This being the case, on 18.09.2012, the bid security that was given by the Consortium was encashed by Respondent No.1 for the recovery of which, a Suit has been filed on 21.09.2015, which is still pending. At this stage, by a show- cause notice dated 12.09.2012 by Respondent No.1, the Consortium was called upon to perform its part of the bid as originally agreed to. Since this was not done, by a letter dated 16.10.2012, the Letter of Award that was accorded and acknowledged by the appellant on 26.09.2011 was “withdrawn” by the Respondent No.1. Consequent to this, Respondent No.1, in a letter dated 26.11.2014, claimed a sum of Rs.446.28 Crores by way of damages against the Consortium, and sent an arbitration notice dated 18.02.2015 stating that, according to it, Clause 19 of the draft Concession Agreement would be the arbitration clause governing the parties, and that they were appointing Retired Justice V.G. Palshikar of the Bombay High Court as their Arbitrator. The appellant and Respondent No.2 were called upon to appoint their Arbitrator within 30 days of receipt of this letter. By a reply dated 29.04.2015, the appellant stated that as no agreement was entered into between the 9 parties, Clause 19 of the draft Concession Agreement would not govern the parties and indicated that if the Respondent No.1 agreed, an Arbitration Agreement could be entered into between the parties to sort out the disputes arising on various scores. By their reply to this letter dated 04.07.2015, the Respondent No.1 continued to reiterate that it was governed by the arbitration clause in the draft Concession Agreement and that as 30 days had elapsed and no arbitrator was appointed by the Appellant, and as the said clause provided that the Arbitrator appointed by the Respondent No.1 would now be the sole Arbitrator to decide the disputes between the parties, called upon Justice Palshikar to adjudicate the disputes between the parties.

The Bidder shall bear all its costs associated with or relating to the preparation and submission of its Bid including but not limited to preparation, copying, postage, delivery fees, expenses associated with any demonstrations or presentations which may be required by the Authority or any other costs incurred in connection with or relating to its Bid. All such costs and expenses will remain with the Bidder and the Authority shall not be liable in any manner whatsoever for the same or for any other costs or other expenses incurred by a Bidder in preparation or submission of the Bid, regardless of the conduct or outcome of the Bidding Process.” xxx “1.1.2 The selected Bidder, who is either a company incorporated under the Companies Act, 1956 or undertakes to incorporate itself as such prior to execution of the Concession agreement (the “Concessionaire”), shall be responsible for (Designing, engineering), financing, procurement, construction, operating and maintenance of the Project under and in accordance with the provisions of a long term Concession agreement (the “Concession Agreement”) to be entered into between the selected Bidder and the Authority in the form provided by the Authority as Part of the Bidding Documents pursuant hereto.

1. Last date of receiving queries To be specified

5. Bid Due Date(s) 22nd July 2010

The documents shall include:

xxx 6.1 The Bidding Process shall be governed by, and construed in accordance with, the laws of India and the Courts at Mumbai shall have exclusive jurisdiction over all disputes arising under, pursuant to and/or in connection with the Bidding Process.”

xxx

xxx

21) We may hasten to add that this judgment would have no manner of application on the facts of this case for the reason that it has been found by us that there is no agreement between the parties at all in the facts of the present case, making it clear, therefore, that the arbitration clause contained in the draft Concession Agreement would not apply. Further, even the without prejudice argument of Mr. Sibal is worthy of acceptance. Mr. Sibal argued, relying strongly upon M.R. Engineers and Contractors Private Limited (supra), that 33 assuming that there was an arbitration clause which governs the parties, the said clause would be wholly inapt as it would only cover disputes between a Special Purpose Vehicle and the Respondent No.1 arising from the Concession Agreement not yet entered into, and not between the Respondent No.1 and the appellant and Respondent No. 2. He is correct, and we agree with this contention as well.

22) We now come to the last argument of Mr. Dave that, on the assumption that the High Court judgment is incorrect, yet we should not, in our discretionary jurisdiction under Article 136 of the Constitution of India, interfere.

23) Mr. Dave relies upon the fact that a subsequent tender has been accepted, causing great financial loss to the Respondent No.1. Mr. Sibal has replied by saying that the subsequent tender contained different tender conditions and, in any case, insofar as that subsequent tender was concerned, his bid was considered the best amongst six other bidders. Apart from this, we are of the view that the High Court judgment is wholly incorrect in holding that the Letter of Award would 34 constitute a binding contract between the parties for the reasons given above. It would be a travesty of justice, in the facts of the case, if we were not to interfere and set aside the same. Consequently, the impugned judgment of the High Court is set aside and the order of the learned Arbitrator is reinstated.

24) The appeal is allowed in the aforesaid terms.

25) It would be open for the Respondent No.1 to pursue its claim of Rs. 436 Crores plus in an appropriate forum, which will decide the same on its own merits in accordance with law.

September 11, 2018.