Dr D Y CHANDRACHUD, J 1 The Petitioner is a company incorporated in the US. The Respondent is
incorporated in Turkey. The Respondent was awarded a contract for the
construction of a pipeline by the Gas Transmission Company Ltd., Bangladesh.
A Letter of Intent was issued by the Respondent to the Petitioner on 16 April
2012 for performing Horizontal Directional Drilling works for six river crossings
under the above-mentioned project in Bangladesh. A detailed work order was
issued on 12 June 2012 to the Petitioner for a total contract price of USD
7,225,000/-. The work to be executed by the Petitioner involved the installation
of thirty inch diameter and six inch diameter gas pipelines under six rivers in
Bangladesh. According to the Petitioner the effective date of the contract was 16
April 2012, while the scheduled date of completion was on 13 March 2013. The
Petitioner is stated to have furnished a performance bank guarantee equivalent
to ten per cent of the contract price. Clause 24 of the work order contained an
Arbitration Agreement in the following terms :-
“24.0 Disputes and Arbitration
24.2 Arbitration :
In case the amicable resolution or settlement is
not reached between the Parties within a
period of 30 days from the day on which the
dispute(s) or difference(s) arose, such
dispute(s) or difference(s) shall be referred to a
sole Arbitrator for settlement by way of
arbitration in accordance with the provisions of
the Arbitration and Conciliation Act 1996 of
Government of India or any applicable law on
arbitration that may be in force then, and any
amendments made thereto. The sole arbitrator
shall be appointed by the mutual consent of
both the Parties. The decision of the Arbitrator
shall be final and binding on both the Parties.
The venue of such arbitration shall be at New
Delhi, India. The Language of the arbitration
proceeding shall be in English.
The existence of any dispute(s) or difference(s)
or the initiation or continuance of the arbitration
proceedings shall not permit the Parties to
postpone or delay the performance by the
Parties of their respective obligations under
this indenture”. According to the Petitioner, four letters of credit were opened by the
Respondent so as to facilitate the completion of four crossings. The
remaining letter of credits, it is alleged, were not opened. According to the
Petitioner, it successfully completed work under all the six crossings and its
bank guarantee was allowed to lapse.
2 Disputes have arisen between the parties, resulting in an exchange
of e-mails. The Petitioner has a claim for unpaid dues. The Petitioner
invoked arbitration by an e-mail dated 2 November 2015 addressed by its
advocate to the respondent. The Petitioner claimed an amount of USD
38,13,723.76 together with interest by its e-mail and suggested the names
of two former judges of the Delhi High Court. The Petitioner sought the
concurrence of the Respondent to the appointment of one of them as sole
arbitrator, in terms of the arbitration agreement. Finding no response,
these proceedings were instituted under Section 11(5) of the Arbitration and
Conciliation Act, 1996.
3 Notice was issued in these proceedings on 8 March 2016. On
7 October 2016 the Respondent informed this Court that it was willing to
negotiate an amicable settlement with the Petitioner and would either
finalize a settlement or file its objections to the petition for appointment of JUDGMENT
an arbitrator within four weeks. Neither has any settlement been arrived at
between the parties nor has a reply been filed to the Arbitration Petition.
4 During the course of the hearing, learned counsel have not disputed
the existence of the arbitration agreement. Disputes have evidently arisen
between the parties and a mutual settlement has not been possible.
5 In the circumstances, we hereby appoint Mr Justice FM Ibrahim
Kalifulla, former judge of the Supreme Court of India to act as a sole
Arbitrator in terms of the arbitration agreement. The learned arbitrator shall
be at liberty to determine the fees payable to him for the arbitration.
6 The Arbitration Petition is accordingly disposed of in the above terms.
New Delhi December 14, 2016