National Highways Authority of India v. Bridge & Roof Co India Ltd

1. Whether the reporters of local papers may be allowed to see the judgment? No

2. To be referred to the reporter or not? No

3. Whether the judgment should be reported in the ‘Digest’? No REKHA SHARMA, J. (ORAL) The appellant and the respondent are Government Undertakings. Both belong to the same clan and yet are locked in litigation with each other. Initially, the disputes between them were referred to the Disputes Review Board (hereinafter referred to as the DRB). The DRB in its order dated December 24, 2008 has held that the termination of the contract by the appellant with the respondent was not in order. It has also held that there was no valid contract between the two after May 21, 2008 and, therefore, the claim 2010:DHC:1578 put up by the respondent for the period beyond May 21, 2008 was not tenable. It appears that the respondent was not satisfied with the latter part of the finding of the DRB and, therefore, it invoked the arbitration clause resulting in the constitution of the Arbitral Tribunal. One of the disputes which has been raised before the Arbitral Tribunal, is whether consequent to the termination of the contract by the appellant, the respondent was entitled to release of its plant, machinery and equipment. The respondent moved an application before the Arbitral Tribunal under Section 17 of the Arbitration and Conciliation Act, 1996 praying for an interim order for the release of its plant, machinery and equipment held by the appellant. The Arbitral Tribunal by its order dated May 14, 2009 directed the appellant to release the same subject to the respondent furnishing an additional Bank Guarantee of Rs.18 crores. However, by a subsequent order dated November 13, 2009 the Arbitral Tribunal has varied its earlier order dated May 14, 2009, in as much as it has directed the appellant to release the plant, machinery and equipment without furnishing the bank guarantee of Rs.18 crores. The revised order has been passed on account of the fact that the appellant is already having adequate security in the form of Bank Guarantee of Rs.35 crores from the respondent. It is submitted by learned counsel for the appellant that the Arbitral Tribunal could not have passed any order with regard to the release of plant, machinery and equipment, as it has yet to decide whether the disputes raised by the respondent are at all arbitral. According to the counsel, the decision of the DRB had attained finality and, therefore, the respondent could not have invoked the arbitration clause. The question whether the finding of the DRB had attained finality and in view thereof, the Arbitral Tribunal has no jurisdiction to adjudicate upon the disputes raised by the respondent, is a matter which falls within the domain of the Tribunal. The Tribunal itself has said in the impugned order that it will deal with the said aspect of the matter at an appropriate stage. In so far as the order of the Tribunal directing the appellant to release the plant, machinery and equipment is concerned, it seems to have been passed keeping in view the fact that the appellant till date has not raised any counter-claim against the respondent and that a Bank Guarantee of Rs.35 crores furnished by the respondent is already lying with the appellant. I find no infirmity in the order so passed by the Arbitral Tribunal. There is no merit in the appeal. The same is dismissed.

REKHA SHARMA, J. MARCH 17, 2010 ka