- 1 - CMP No.196 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 31ST DAY OF JANUARY, 2025 BEFORE THE HON'BLE MR JUSTICE SACHIN SHANKAR MAGADUM CIVIL MISC. PETITION NO.196 OF 2024 BETWEEN: M/S. BSR INFRATECH INDIA LTD BENGALURU, CORPORATE OFFICE SITUATED AT NO.851, D-BLOCK 15TH CROSS, SAHAKARNAGAR BENGALURU, KARNATAKA - 560 092. REPRESENTED BY ITS SENIOR VICE-PRESIDENT AND AUTHORISED SIGNATORY SACHINDRA S. …PETITIONER (BY SRI. ZULFIKIR KUMAR SHAFI, ADVOCATE) AND: 1. THE MANAGING DIRECTOR BANGALORE METROPOLITAN TRANSPORT CORPORATION DOUBLE ROAD BMTC BUS STAND SHANTHI NAGAR BENGALURU - 560 027. 2. THE EXECUTIVE ENGINEER-3 (ZONE-2) BANGALORE METROPOLITAN TRANSPORT CORPORATION CIVIL ENGINEERING DEPARTMENT SHANTHI NAGAR BENGALURU - 560 027. …RESPONDENTS (BY SRI. P.D.SURANA, ADVOCATE FOR R1 & R2) Digitally signed by NAGARAJA B M Location: HIGH COURT OF KARNATKA - 2 - CMP No.196 of 2024 THIS CIVIL MISC. PETITION IS FILED UNDER SEC.11(6) OF THE ARBITRATION AND CONCILIATION ACT 1996 READ WITH NOTIFICATION NO.LCA/I/402/1996 DATED 13.11.1996 OF THE HIGH COURT OF KARNATAKA PRAYING TO APPOINT JUSTICE ASHOK B HINCHIGERI (RETD) JUDGE, HIGH COURT OF KARNATAKA AS A SOLE ARBITRATOR TO ADJUDICATE THE DISPUTE ARISING OUT OF CLAUSE NO.24 OF GENERAL CONDITIONS OF CONTRACT AND CLUSE NO.4 OF THE SPECIAL CONDITIONS OF CONTRACT VIDE ANNEXURE-A DATED 20.08.2014 AND TO PASS SUCH OTHER SUITABLE ORDERS AS NECESSARY UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. THIS CIVIL MISC. PETITION HAVING BEEN HEARD AND RESERVED FOR ORDERS ON 29.01.2025, THIS DAY ORDER WAS PRONOUNCED THEREIN, AS UNDER: CORAM: HON’BLE MR. JUSTICE SACHIN SHANKAR MAGADUM CAV ORDER This Civil Miscellaneous Petition is filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 (for short 'the Act') seeking appointment of sole Arbitrator to resolve the dispute and difference between the parties in terms of conditions of contract dated 20.08.2014 evidenced at Annexure-A. 2. After receipt of notice, the respondents have tendered appearance through learned counsel. The respondents called for tender for construction of passenger - 3 - CMP No.196 of 2024 amenity centre at BTM Layout, Bengaluru and petitioner was declared as successful bidder and the respondents entrusted the contract work to the petitioner. 3. Petitioner alleges that during the execution of the project, a dispute arose between petitioner and respondents and this prompted the petitioner to issue a letter on 10.10.2023 and in the said letter, petitioner tendered detailed claims to the respondents and requested to take decision. Petitioner alleges that there was no response by the respondents to this letter and therefore, left with no other option, petitioner was constrained to issue legal notice on 20.12.2023 failing which petitioner disclosed intention to invoke arbitration clause. In the said notice, petitioner also nominated an Arbitrator. The respondents though received legal notice failed to comply and hence, this civil miscellaneous petition. Learned counsel for the petitioner in support of his contention has placed reliance on the judgment rendered by the Hon'ble - 4 - CMP No.196 of 2024 Apex Court in the case of NBCC (India) Limited vs. Zillion Infraprojects Private Limited1. 4. Learned counsel for the respondents reiterating the grounds urged in the objection has vehemently argued and contended that clause 24 of the general conditions of contract and clause 4 of the special conditions of contract are not applicable. Referring to the tender conditions which also includes special conditions of contract, he would point out that these clauses stand deleted and therefore, clause 24 of general conditions of contract is not applicable to the present case on hand and therefore, the petitioner needs to be relegated to Civil Court to work out his remedies. 5. After thorough review of the petition, annexures and supporting documents, though there appears to be some ambiguity in the conditions of contract which is placed on record by the respondents vide Annexure-R1, 1 (2024) 7 SCC 174 - 5 - CMP No.196 of 2024 clause 2.2 would be relevant and therefore, this Court deems it fit to cull out clause 2.2 which reads as under: "2.2 The documents forming the Contract shall be interpreted in the following order of priority: (1) Agreement (2) Letter of Acceptance, notice to proceed with the works (3) Contractor's Tender (4) Contract Data (5) Conditions of Contract (6) Specifications (7) Drawings (8) Bill of quantities and (9) any other document listed in the Contract Data as forming part of the Contract." 6. Clause 24 of the conditions of contract would be also relevant and therefore, this Court deems it fit to extract clause 24 which reads as under: "24. Procedure for resolution of Disputes: 24.1 If the Contractor is not satisfied with the decision taken by the Employer, the dispute shall be referred by either party to Arbitration within 30 days of the notification of the Employer's decision. 24.2 If neither party refers the dispute to Arbitration within the above 30 days, the Employer's decision will be final and binding. - 6 - CMP No.196 of 2024 24.3 The Arbitration shall be conducted in accordance with the arbitration procedure stated in the Special Conditions of Contract." 7. A careful reading of Clause 2.2, when read in conjunction with Clause 24, clearly establishes the order of priority for interpreting the documents that constitute the contract. Clause 2.2 provides an explicit hierarchy, ensuring that any conflicts or inconsistencies between contractual documents are resolved in accordance with this prescribed order of precedence. Notably, the agreement executed between the petitioner and the respondents does not contain an independent clause detailing the mechanism for dispute resolution. However, Clause 24 of the Conditions of Contract unequivocally stipulates that any disputes arising under the contract shall be resolved exclusively through arbitration. This provision forms a fundamental part of the contract and, as such, must be given due effect. - 7 - CMP No.196 of 2024 8. In contrast, Clause 4 of the Special Conditions of Contract, which also pertains to arbitration procedures, has been expressly deleted. The deletion of Clause 4 signifies that the specific arbitration procedure outlined therein is not applicable. However, this does not negate or override the general arbitration mechanism provided under Clause 24 of the Conditions of Contract. The removal of Clause 4 merely implies that the parties did not intend to adopt a specific arbitration framework as outlined in the Special Conditions of Contract, but it does not nullify their consensus on arbitration as the designated mode of dispute resolution under Clause 24. 9. A detailed comparison of Clause 24 of the Conditions of Contract and Clause 4 of the Special Conditions of Contract reveals that Clause 24 takes precedence over Clause 4. The order of priority established under Clause 2.2 further reinforces this conclusion. Even if any ambiguity exists between these clauses, the governing principle of contractual - 8 - CMP No.196 of 2024 interpretation dictates that Clause 24 prevails. The deletion of Clause 4 does not, in any manner, abrogate the arbitration clause under Clause 24; rather, it merely removes the procedural aspects set out in the Special Conditions of Contract. Furthermore, it is essential to acknowledge that the Special Conditions of Contract, as set forth under Clause (F), form an integral part of the broader Conditions of Contract. Consequently, the respondents’ argument to the contrary is untenable. The dispute resolution framework under Clause 24 remains binding and enforceable, ensuring that arbitration remains the agreed upon mode of resolving disputes under the contract. 10. After thorough review of petition, annexures and supporting documents, this Court is satisfied that petitioner has met the procedural requirements outlined under Section 11(4) of the Arbitration and Conciliation Act. Consequently, the objections raised by the respondents - 9 - CMP No.196 of 2024 that the arbitration clause stands deleted in view of clause 4 of special conditions of contract is rejected. 11. In the light of the aforesaid clause 24 of the conditions of contract and the contentions advanced by the petitioner, this Court proceeds to pass the following: ORDER (i) Civil Miscellaneous Petition is allowed appointing Sri. Justice *Ajit. J. Gunjal, Former Judge, High Court of Karnataka as the sole Arbitrator to enter reference of the disputes between the petitioner and the respondents and conduct proceeding at the Arbitration and Conciliation Centre (Domestic and International), Bengaluru according to the Rules governing the said Arbitration Centre; (ii) All contentions inter se parties are left open for adjudication in the arbitration proceedings; (iii) Office is directed to communicate this order to the Arbitration and Conciliation Centre and to Sri. Justice *Ajit. J. Gunjal, Former Judge, High Court of Karnataka, as required *corrected vide court order dated 28.02.2025. - 10 - CMP No.196 of 2024 under the Arbitration and Conciliation Centre Rules, 2012. SD/- (SACHIN SHANKAR MAGADUM) JUDGE CA