Delhi High Court Sms Ltd. vs Rail Vikas Nigam Limited on 14 January, 2020 Equivalent citations: AIRONLINE 2020 DEL 15 Judgment delivered on: January 14, 2020 + ARB.P. 167/2019 SMS LTD. ..... Petitioner Through: Mr. Ritin Rai, Sr. Advocate with Mr. Sandeep Das, Mr. Mridul and Ms. Surbhi Sharma, Advs. versus RAIL VIKAS NIGAM LIMITED ..... Respondent Through: Mr. Anil Seth and Mr. Prateek, Advs. HON'BLE MR. JUSTICE V. KAMESWAR RAO JUDGMENT V. KAMESWAR RAO, J 1. The present petition has been filed by the petitioner under Section 11(6) read with Section 11(12)(b) of the Arbitration and Conciliation Act, 1996 (in short, „Act of 1996‟) with the following prayers: "In light of the facts and circumstances of the case, the Petitioner Company, therefore, most humbly prays that this Hon'ble Court may be pleased to: (a) Appoint a nominee Arbitrator on behalf of the Respondent Company or alternatively, without prejudice to aforesaid, appoint an independent sole Arbitrator to adjudicate upon and decide all the ARB.P. 167/2019 Page 1 of 25 disputes between the Petitioner Company and the Respondent Company in connection with and under the Contract Agreement dated 27.05.2010; and (b) Pass such further orders as this Hon 'ble Court may deem fit and proper in the facts and circumstances of the case." 2. It is the case of the petitioner that it was incorporated in 1997 at Nagpur and is one of the leading infrastructure companies in Central India. The respondent Company is the Rail Vikas Nigam Limited (RVNL), which is a 100% owned PSU of Ministry of Railways, was incorporated on January 24, 2003 with the objective of raising extra budgetary resources and implementing projects relating to creation and augmentation of capacity of rail infrastructure on fasttrack basis. 3. The respondent Company in March, 2009, invited tenders from eligible bidders for "Construction of Roadbed, Supply of Ballast Major and Minor Bridges, Residential and Service Buildings and General Electrical Work etc. for Dallirajhara Keoti Section in connection with a new rail link between Dallirajhara and Rowghat in Raipur Division of South East Central Railway in the State of Chhattisgarh, India at an estimated cost of `115.62 Crores with completion period of 24 months along with 6 months defect liability period. The petitioner Company submitted its bid dated June 16, 2009 to the respondent Company. The respondent Company after evaluation of the same accepted the petitioner Company's bid vide its letter dated October 20, 2009 which was to be treated as the Letter of ARB.P. 167/2019 Page 2 of 25 Acceptance (LoA). By way of the said LoA the respondent Company called upon the petitioner Company to submit Performance Security. The petitioner Company on receipt of the LoA duly submitted the "performance security" and the "additional performance security". The respondent Company thereafter issued another letter dated November 30, 2009 in accordance whereof the work was to be commenced by December 10, 2009. Subsequently, the Contract Agreement dated May 27, 2010 („Contract Agreement‟, for short) was executed between the petitioner Company and the respondent Company. Further, as per the Contract Agreement, the work was to be completed by December 09, 2011 which excludes six months as defect liability period. 4. It is the case of the petitioner Company, that due to the respondent Company's failure to adhere to the agreed terms and conditions of the Contract Agreement, the contract has been delayed by many years due to which the petitioner Company had to remain on site for much longer than agreed. On account of such breaches and delays, the work was limited to 017.6 kms. instead of 042 kms. Further, due to the various breaches on part of the respondent Company, the petitioner Company claimed damages which accrued up to May 31, 2012. These claims were partially allowed in favour of the petitioner Company. 5. It is the case of the petitioner Company that despite the aforesaid, the respondent Company has further delayed the project and breached its obligations under the