5' ■ ^ >*■ IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAV FRIDAY, THE SEVENTH DAY OF FEBRUARY TWO THOUSAND AND TWENTY FIVE PRESENT HON’BLE SRI JUSTICE DHIRAJ SINGH THAKUR, THE CHIEF JUSTICE ARBITRATION APPLICATION No.13 of 2019 Between: M/s.Sew Infrastructure Limited, rep by its Asst. General Manager, Mr. Ch. Gowrisankara Rao, 6-3-871, 1®* floor, Snehalata Greenlands Road, Begumpet, Hyderabad-500016. ...Applicant AND Rashtriya Ispat Nigam Limited, rep by its Dy. General Managing (c) / Contracts, Visakhapatnam Steel Plant, Admn Building, Visakhapatnam -530031. ...Respondent Application under Section 11 (4) R/w 11(3) of the Arbitration and Conciliation Act, 1996 (as amended in 2015) to appoint a nominee arbitrator on behalf of the Respondent as per the provisions under sec 11(4) read with 11(3) of the Arbitration and Conciliation Act, 1996 (as amended in 2015), read with relevant Rules and scheme under the Act and enable the constitution of the Arbitral Tribunal as per the provisions of the Agreement between the parties. Counsel for the Petitioner : Sri V Seetharama Avadhani Counsel for the Respondent : Sri V Subrahmanyam The Court made the following: 4- 0227262019 _#• ■< Bench Sr.No;-6 [3441] IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI ; * 0^ ARBITRATION APPLICATION NO: 13 of 2019 . » ...Applicant Sew Infra Structures Vs. ...Respondent Rashtriya Ispat Nigam ********* cf Mr. V. Seetharama Avadhani Advocate for Applicant; Advocates for Respondent; Mr. V. Subrahmanyam CORAM :THE CHIEF JUSTICE DHIRAJ SINGH THAKUR DATE : February, 2025. PC : This is an application filed under Section 11 of the Arbitration and Conciliation Act, 1996, seeking reference of the disputes arising out of and in connection with Agreement, dated 13.02.2009, to an arbitrator. The Agreement was executed in regard to the construction of Civil 2. Engineering Works of Special Bar Mill (Zone-09). The value of the contract as per the Agreement was Rs.80,78,29,964/- and the same had to be completed within a period of 19 months. The stipulated date of completion of works was 24.04.2010. The petitioner claims that execution of the works gpt delayed for a period of 47 months, beyond the stipulated time period, for reasons beyond the control of the petitioner and reasons solely attributable to the respondent. 3. ✓ 2 HCJ ARBAPPL 13 2019 The works were completed on 31.03.2014. It is stated that the Defect Liability Period (DLP) also ended on 31.03.2015. The petitioner also claims that extension of time was granted on a number of occasions without imposing any Liquidated Damages (LD), therefore, indicating that the extension was justified as the reasons for delay could not be attributed to the petitioner. 4. The petitioner further states that during execution of the works, there were certain deviations also ordered, which led to the delay in execution of the 5. works. The petitioner claims that it suffered huge losses due to the delays caused by the respondent as also due to the extra works imposed upon him, which were otherwise not covered by the agreement and therefore, states that it filed a claim through a communication, dated 04.03.2017 seeking compensation for an amount of Rs.49,3372,844/- from the respondent. The claim, however, was rejected vide letter dated 07.09.2017. 6. It was urged that even when Final Work Completion Certificate was issued by the respondent on 07.12.2017 certifying that the works had been completed satisfactorily, no effort was made to redress the claims of the petitioner and issued the final bill along with the details of the payment made to the applicant. 3 HCJ ARBAPPL 13 2019 Learned counsel for the applicant states that the genuine claims of the 7. applicant were never considered and therefore, urges reference of the disputes in terms of Clause 28.2 of the GCC, which envisages settlement of disputes through the mechanism of arbitration by a three-member Tribunal. It is stated that the petitioner nominated Justice G. Rohini as its 8. arbitrator and called upon the respondent to nominate their arbitrator by virtue of communication dated 28.05.2019. The request for nomination of the arbitrator for purposes of constituting the Arbitral Tribunal was rejected by the respondent vide communication dated 04.06.2019, on the ground that the arbitration had been sought beyond the agreed period of six months from the date of issuance of the Final Work Completion Certificate dated 07.12.2017. 9. In the facts and circumstances above, counsel for the applicant prays that the disputes having arisen between the parties and in view of the refusal on the part of respondent to nominate its arbitrator, the present application is required to be allowed and arbitrator be nominated on behalf of the respondent. 10. Learned counsel for the respondent, on the other hand, resisted the present arbitration application, on the ground that the applicant having issued the No Claim Certificate, in regard to the works executed, could not be permitted to raise any fresh claims in connection with the contract in question. It is also stated that, even otherwise, the claims were barred in terms of 11. the agreement, since the same had not been raised within the period 4 HCJ ARBAPPL 13_2019 X . prescribed in terms of Clause 28.3 of the Agreement which envisaged that no dispute could be raised later than six months from the date of the satisfactory completion of the work. In the present case, there is no dispute with regard to the existence of an arbitration clause and since disputes have arisen between the parties, the required to be resolved through the mechanism of arbitration as has been agreed to by the parties in terms of Clause 28.2 of the agreement. Considering the view expressed by the Apex Court in a recent judgment in Aslam Ismail Khan Deshmukh vs. ASAP Fluids Private Limited and another ’’, the scope of examination by the referral Court is limited to determining whether there exists an arbitration agreement or not. The Apex Court held; 11. same are 12. 51. It is now well settled law that, at the stage of Section 11 the referral Courts need only to examine whether the application arbitration agreement exists - nothing more, nothing less. This approach upholds the intention of the parties, at the time of entering into the agreement, to refer all disputes arising between themselves to arbitration. However, some parties might take undue advantage of such a limited scope of judicial interference of the referral courts and force other parties to the agreement into participating in a time- consuming and costly arbitration process. This is especially possible including but not limited to, where the claimant in instances canvasses either ex facie time-barred claims or claims which have been discharged through "accord and satisfaction", or cases where the impleadment of a non-signatory to the arbitration agreement is sought etc. In order to balance such a limited scope of judicial with the interests of the parties who. might be 52. interference constrained to participate in the arbitration proceedings, the arbitral tribunal may direct that the costs of the arbitration shall be borne by the party which the Tribunal ultimately finds to have abused the (2025)1 see 502 5 HCJ ARBAPPL 13 2019 process of law and caused unnecessary harassment to the other party to the arbitration.” i/ Be that as it may, the present arbitration application is allowed. In addition the Arbitrator nominated by the applicant, Justice Ramesh D. 13. Dhanuka, former Chief Justice, High Court of Bombay, is appointed as an Arbitrator. The two Arbitrators shall appoint; a Presiding Arbitrator. The Arbitral Tribunal so constituted shall enter upon the reference and adjudicate upon the disputes arising out of and in connection with Agreement, dated 13.02.2009 and render the Award within the statutory period. The parties shall be free to file detailed claims and counter-claims, before the Arbitral Tribunal. The learned Arbitrators shall be entitled to claim the fee in consultation with the parties. No order as to costs. Pending miscellaneous applications, if any, in this application shall stand closed. A copy of this order be communicated to the learned Arbitrator on the address mentioned herein below; Justice Ramesh D. Dhanuka, 13, Mittal Tower, C-Wing, Barrister Rajini Patel Marg, Nariman Point, Mumbai - 400 021. Ph; 98211 34074 S.V.S.R.MURTHY JOINT REGISTRAR r <§(c //TRUE COF>Y// SECTION OFFICER To 1) Sri Justice Ramesh D. Dhanuka, former Chief Justice, High Court of Bombay, R/o.131, Mittal Tower, C-Wing, Barrister Rajini Patel Marg, Nariman Point, Mumbai -400021. Ph: 9821134074 (along with a copy of Arbitration Application Affidavit and all material papers filed along with Arbitration Application) (RPAD) 2) The Registrar (Judicial), High Court of Andhra Pradesh, Amaravathi. m' 3) One CC to Sri V Seetharama Avadhani, Advocate (Ph.No.99896211 03 & Mail: Management@avadhaniassociates.com) [OPUOJ 4) One CC to Sri V Subrahmanyam, Advocate, (Ph.No.9848011336 & Mail: subbuvaliveti@gmail.com) [OPUC] 5) The Dv. General Managing (c) / Contracts, ^^shtriya Ispat Nigam Limited, Visakhapatnam Steel Plant, Admn Building, Visakhapatnam - 530031. 6) The Section Officer, OS Section, High Court of Andhra Pradesh at Amaravathi. 7) Three CD Copies .■r' •<» HIGH COURT TK DATED:07/02/2025 ORDER ARBAPPL.No.13 of 2019 5 2 f MA» 2025 Curreni aieciion . ALLOWING THE ARBITRATION APPLICATION