Delhi High Court Salma Dam Joint Venture Through: Sjv ... vs Wapcos Limited on 25 January, 2019 Equivalent citations: AIRONLINE 2019 DEL 517 * Judgment reserved on: 27.9.2018 Judgment pronounced on: 25.01.2019 + ARB.P. 810/2016 & I.A. 15589/2017 (for impleadment) SALMA DAM JOINT VENTURE THROUGH: SJV PROJECTS PVT. LTD. ..... Petitioner Through: Mr. Shreyas Jayasimha, Ms. Supriya Jain and Ms. Shweta Vaishisht, Advs. versus WAPCOS LIMITED ..... Respondent Through: Mr. Arvind K. Nigam, Sr. Adv. with Mr. Milanka Choudhury, Mr. Vineet Dvivedi, Ms. Naina Dubey and Ms. Sakshi Singh, Advs. for R1. Ms. Geeta Luthra, Sr. Adv. with Mr. R.K. Sanghi, Mr. Satyendra Kumar, Mr. Ishan Sanghi and Mr. K. Prasanna, Advs. for R2 HON'BLE MR. JUSTICE RAJIV SHAKDHER RAJIV SHAKDHER, J. Prefatory facts: 1. This is a petition filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 (hereafter referred to as "1996 Act"). 2. The petitioner before me is a joint venture entity going by the name: Salma Dam Joint Venture (hereafter referred to as "J.V. entity"). The J.V. entity comprises a company by the name of SSJV Projects Private Limited (in short "SSPL") and another company by the name: M/s Angelique International Ltd. (in short "AIL"). The J.V. entity was formed pursuant to ARB. P. No.810 of 2016 Page 1 of 23 a Joint Venture Agreement dated 9.9.2005 (in short "JV Agreement") executed between SSPL and AIL. 2.1 It may be relevant to note at the very outset that AIL communicated to the respondent, WAPCOS Limited (hereafter referred to as "WAPCOS"), vide letter dated 11.11.2016 that it had withdrawn the authority granted to SSPL under the JV Agreement to represent AIL. The reason that I have referred to this aspect at the very threshold is on account of the fact that WAPCOS has opposed the instant petition on two principal grounds; one of which relates to withdrawal of authority given to SSPL. As to what is the impact, if any, of the objections taken by WAPCOS will be dealt with by me in the later part of the judgment. 3. However, in order to adjudicate upon the present petition, to my mind, the following broad facts are required to be noticed. 3.1 It appears that in and about 1976, the work pertaining to construction of the Salma Dam, which is located in Afghanistan, was initiated. This work was abandoned due to unrest and civil war. Around November 2004, the Government of India picked up the threads of the job left undone. 3.2 For this purpose, the Government of India through Ministry of External Affairs (MEA) entered into an agreement dated 29.11.2004 with WAPCOS; which is a public sector enterprise working under the aegis of the Ministry of Water Resources, River Development and Ganga Rejuvenation. 3.3 Under the aforementioned agreement, WAPCOS was appointed as a specialized agency to provide financial, administrative and contract management services to MEA for taking forward the work of constructing the Salma Dam. The respondent was to be paid a commission for its efforts, while the funding for the construction of the dam was required to be ARB. P. No.810 of 2016 Page 2 of 23 provided by MEA. However, payments made by MEA to the J.V entity were required to be routed via WAPCOS. 3.4 It may be relevant to note that the agreement dated 29.11.2004, to which I have made a reference above, was followed by a Supplementary Agreement dated 5.2.2016. 3.5 The construction of the dam was divided into five main packages. Being cognizant of the nature of job entrusted to it, WAPCOS in and about 2005, took out a public tender. Against this tender, the J.V. entity preferred a bid visàvis one of the packages, which is described as "Reconstruction, Rehabilitation and Completion of Salma Dam Project (3x14 MW), Afghanistan, Package III: Main Civil & Hydro Mechanical Works" (hereafter referred to as "subject project"). 3.6 The J.V. entity was declared successful and awarded the subject project on 17.1.2006. 3.7 Consequent thereto, on 9.3.2006, a Contract Agreement (in short "C.A.") was executed between WAPCOS and the J.V. entity. The C.A. was, however, made effective from the date when the tender was first awarded to the petitio