Page No.# 1/7 GAHC030002092026 THE GAUHATI HIGH COURT (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH) Case No. : Arb.P./1/2026 Sh. V. Lalbiakzama S/o V. Hmingthanga (L), R/o ITI Veng, Aizawl, Mizoram VERSUS The Chief Engineer Roads, Public Works Department, Aizawl, Mizoram Advocate for the Petitioner : Mr B Lalramenga Advocate for the Respondent : Addl. AG/GA, Mizoram Linked Case : Arb.A./9/2026 The State of Mizoram represented by the Secretary to the Government of Mizoram and 2 Ors Public Works Department Aizawl Mizoram - 796001 2: The Engineer-in-Chief Public Works Department Government of Mizoram Aizawl Mizoram - 796001 3: The Chief Engineer (Roads) Public Works Department Government of Mizoram Aizawl Mizoram - 796001 VERSUS Sh. V. Lalbiakzama Page No.# 2/7 S/o V. Hmingthanga (L) R/o ITI Veng Aizawl Mizoram Advocate for the Petitioner : Ms Lalnunhlui Advocate for the Respondent : Mr B Lalramenga BEFORE HONOURABLE MR. JUSTICE MICHAEL ZOTHANKHUMA ORDER 15.05.2026 1. Heard Mr. A. Bhattacharya, learned counsel for the petitioner (contractor) in Arb.P 1/2026 and the respondent in Arb.A. 9/2026. Also heard Ms. Lalnunhlui, learned Government Advocate for the State of Mizoram through the Chief Engineer, PWD. 2. Arb.P 1/2026 is an application submitted under Section 11(6)(a) of the Arbitration and Conciliation Act, 1996, for appointment of an Arbitrator, in terms of Clause 25 of the General Conditions of Contract, read with Clause 3 of the Special Conditions of Contract, being the arbitration agreement. 3. Arb.A. 9/2026, on the other hand, is an appeal filed by the State of Mizoram against the impugned order dated 15.12.2025, passed by the Court of the Additional District Judge-II, Aizawl in Arbitration Matter 7/2025. 4. The facts of the case in brief is that the Contractor had been allotted a contract work for construction of Meidum - Horotki road Phase – II, for an amount of Rs. 23,98,08,789/-(Rupees Twenty Three Crores Ninety Eight Lakhs Eight Thousand Seven Hundred Eighty Nine). The contract was awarded to the Page No.# 3/7 Contractor on 20.06.2022 and a contract agreement was signed on 25.07.2022. The contract was to be completed within 12 months, i.e., by 03.08.2023. 5. Despite extensions of time being given to the Contractor to complete his contract work, i.e., for 763 days cumulatively, the Contractor could not complete the contract work. Further, it is the case of the State Government that till date, the Contractor has completed only 9.2% of the contract work. 6. As the work was not completed by the Contractor despite extensions of time being given to him, the State Government terminated the contract work and sought invocation of the bank guarantees due to the same, vide letters dated 13.08.2025. 7. The Contractor thereafter filed an application under Section 9 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the Act), seeking interim relief from the Court before initiation of arbitral proceedings, vide Arbitration Appeal No.7/2025, before the District Judge, Aizawl. The Court of the District Judge, Aizawl thereafter passed Order dated 02.09.2025 in Arbitration Appeal No. 7/2025, wherein it suspended the termination letter dated 13.08.2025 and the letter dated 13.08.2025 for invocation of bank guarantees submitted by the Contractor. The Court of the District Judge further directed that the arbitration proceedings in respect of the dispute between the State Government and the Contractor must be initiated within 3 months from the date of presentation of the petition under Section 9 of the Act and if not done so, the order granting the interim measures automatically would stand vacated, on the expiry of 3 months from the date of presentation of the petition. 8. The relevant paragraphs 8, 9 & 10 of the order dated 02.09.2025 passed Page No.# 4/7 in Arb.A. No. 7/2025 is reproduced herein below, as follows:- “8. At this juncture It is necessary to go through the requirements of Section 9 of the Arbitration and Conciliation Act, 1996. As per section 9 of the Arbitration and Conciliation Act, 1996, the parties are permitted to seek Interim measure in order to safeguard their interest if the other party violates the terms and conditions of the agreements. Any contracting party is at liberty to file an application U/s 9 of the said act for Interim measure during or before the arbitration proceedings. 9. Though the applicant has not sufficiently shown how and when It proposes to approach the Arbitrator, considering the nature of the contract, the period it has been executed, the expenses already lecurred and the damage that can be caused by the sudden termination of the contract, this Court is of the view that the applicant has a prima facie case, that the balance of convenience is in his favour and that he is likely will suffer irreparable loss if the interim protection is not given. 10. Accordingly, as an ad Interim measure the termination Order dt.18.08.2025 and Order dt.13.8.2025 for Invocation of Bank Guarantee both issued by the respondent shall remain suspended till further Order. Needless to mention that, as per section 9 (2) ABC Act, the arbitral proceedings in respect of the dispute must be initiated within three months from the date of the presentation of the petition U/s 9 and if not done so the order granting the Interim measure automatically stands vacated on the expiry of three months from the date of presentation of the petition.” 9. Thereafter, the Arbitration Matter No. 7/2025 was disposed of by a different Judge, i.e., Additional District & Sessions Judge -III, Aizawl on 15.12.2025, by holding that the application under Section 9 of the Act was allowed and that the State Government was restrained from acting upon the termination letter dated 13.08.2025 and from invoking or en-cashing the bank guarantees furnished by the Contractor pending initiation of Arbitration Proceedings and constitution of an Arbitral Tribunal. Page No.# 5/7 10. Suffice to say that the issue of appointment of Arbitrator/s could not be resolved between the parties for various reasons. However, on considering the entire matter, pertaining to the two cases mentioned in this order, this Court on 05.05.2026 had directed the State Government of Mizoram, represented by the PWD, to obtain instructions as to whether a Dispute Review Expert, had been appointed by the State Government, for deciding the dispute between the parties, in terms of Clause 24 and 25 of the contract agreement dated 25.07.2022. 11. In this regard, a communication dated 14.05.2026 has been issued by the Under Secretary (T) to the Government of Mizoram, Public Works Department, which is addressed to the Engineer-in-Chief, PWD and the Contractor, to the effect that approval for proposal of Shri Toli Besa, Chief Engineer (Rtd.) PWD, Government of Arunachal Pradesh, has been made to act as a Dispute Review Expert, to decide the contractual dispute between the parties. 12. Mr. A. Bhattacharya, learned counsel for the Contractor, submits that they have no problem with appearing before the Dispute Review Expert proposed by the State Government, in terms of Clause 24 and 25 of the contract agreement dated 25.07.2022. 13. In that view of the matter, the parties are directed to approach Shri Toli Besa, Chief Engineer (Rtd.) PWD, Government of Arunachal Pradesh, for deciding the dispute between the parties, in terms of Clause 24 and 25 of the agreement dated 25.07.2022, which are as follows: “24. Disputes 24.1 If the Contractor believes that a decision taken by the Engineer was either outside the authority given to the Engineer by the Contract or that the decision was wrongly taken, the decision shall be referred to the Dispute Review Expert within 14 days of the notification of the Page No.# 6/7 Engineer's decision. 25. Procedure for Disputes 25.1 The Dispute Review Expert (Board) shall give a decision in writing within 28 days of receipt of a notification of a dispute. 25.2 The Dispute Review Expert (Board) shall be paid daily at the rate specified in the Contract Data together with reimbursement expenses of the types specified in the Contract Data and the cost shall be divided equally between the Employer and the Contractor, whatever decision is reached by the Dispute Review Expert. Either party may give notice to the other to refer a decision of the Dispute Review Expert to an Arbitrator within 28 days of the Dispute Review expert's written decision. If neither party refers the disputes to arbitration within the next 28 days, the Dispute Review Expert’s decision will be final and binding.” 14. Though Clause 24 of the contract agreement provides that the decision to be challenged is to be referred within 14 days to the Dispute Review Expert, the Dispute Review Expert should take into consideration the fact that the said timeline cannot be followed for obvious reasons. The Dispute Review Expert would have to decide the matter, by condoning the delay in approaching the Dispute Review Expert, for resolution of the dispute between the parties. Accordingly, the Contractor is directed to approach the Dispute Review Expert on or before 01.06.2026, with regard to his grievance. 15. As a period of 28 days is provided to the parties to refer the matter to arbitration after the decision of the Dispute Review Expert is made, this Court directs that no coercive action should be taken against the bank guarantees provided by the Contractor for 28 days or till steps has been taken for arbitration, whichever is earlier, from the date of disposal of the dispute between the parties by the Dispute Review Expert. In the event the Contractor does not approach the Dispute Review Expert on or before 01.06.2026, the above order directing that no coercive action should be taken will automatically lapse. It is hoped that the Dispute Review Expert will dispose of the dispute between the parties expeditiously in terms of Clause 24 & 25 of the agreement. Page No.# 7/7 16. The petition and the appeal are accordingly disposed of. JUDGE Comparing Assistant