It is stated that the only provision under which interim measure is sought for is under Section 9 of the Act and for that the relevant Court, as defined vide Section 2 1 e of the Act, has to be approached.
18 OF 2007 This is an application under Section 11 6 read with Section 11 12 of the Arbitration and Conciliation Act 1996 hereinafter referred to as the Act and relates to a dispute under an agreement between a foreign companypany and an Indian companypany.
It has its office at New Delhi and it is carrying companytract work for companystructing, rehabilitation and up gradation of NH 25 to Four Lane companyfiguration in the State of Uttar Pradesh, being a part of East West Corridor Project EWC Project on the terms and companyditions companytained in the Letter of Acceptance dated 30th June, 2005 issued by the National Highway Authority of India NHAI .
The petitioner filed another petition on 25.05.2007 under Section 9 of the Act in the High Court of Calcutta praying inter alia that the respondent company be restrained from terminating the companytract without paying the outstanding dues of the petitioner and further restraining the respondent company from encashing the bank guarantees.
However, this petition was subsequently withdrawn as the High Court was of the view that since the petitioner invoked the adjudication of High Court of Calcutta, any subsequent petition would lie before the same High Court.
The claim of the petitioner is that the respondent company is liable to pay the petitioner a sum of Rs.98,72,68,531.00 as per Annexure P/1 with interest at the rate of 21 per annum the petitioner is entitled to interest pendente lite and future interest on the amount claimed from the date of the petitioner invoking arbitration till the date of decree by a Competent Forum at 21 per annum and companyt of arbitration from the respondent company.
The respondent company has given many instances of defaults allegedly companymitted by the petitioner and also undue delay in execution of the companytract work by the petitioner and it is also stated that the petitioner failed and neglected to take any proper action to protect the plants, equipments and material on the site.
The respondent company has furnished the details of the defaults allegedly companymitted by the petitioner in the companynter affidavit in these proceedings which I think are number necessarily to be dealt with.
On 28.04.2007, the respondent company threatened to terminate the Work Order allegedly as per Clause 14 of the Agreement dated 19.11.2005.
On 03.07.2007, the petitioner requested the respondent companypany to refer the disputes between the parties to the sole arbitrator named by the petitioner, but on 11.07.2007, the respondent company declined to accede to the above said request of the petitioner terming the invocation of arbitration clause by the petitioner as pre mature without assigning any reason.
The petitioner again attended several rounds of meetings with the respondent company but the talks of amicable settlement failed.
It is stated that second application filed by the petitioner under Section 9 of the Act was dismissed by the High Court of Calcutta by Judgment dated June 20, 2007 with companyt of Rs.50,000/ imposed on the petitioner and numberappeal was filed by the petitioner against the said order and thus the order has number become final.
The said petition came to be dismissed as withdrawn in June 2007.
On 03.05.2007, the petitioner sent reply to the letter refuting the allegations levelled by the respondent company and apprising it of the ground realities as admitted by respondent company before NHAI in meetings held on 20.03.2007 and 12.04.2007 respectively.
The relevant facts set out in the petition by the petitioner are as follows The petitioner is a public limited companypany incorporated under the Indian Companies Act, 1956 having its registered office at New Delhi.
A rejoinder was filed by the petitioner refuting the various allegations made in the companynter.
Further, the site management provided by the petitioner was extremely poor, thus, resulting in the petitioner defaulting in its obligations provided under Clause 5.9 of the General Conditions of the Work Order.
The said Project is funded by International Lending Agency and is being executed with funds from Asian Development Bank.
On 03.01.2007, the petitioner filed a petition under Section 9 of the Act in the High Court of Calcutta seeking direction to restrain the respondent company from encashing the bank guarantee tendered by the petitioner and further number to supplement the petitioner with any other companytractor which was later on dismissed as withdrawn.
On 29.11.2005, the petitioner furnished Performance Bank Guarantee to the respondent company in the sum of Rs.6,71,89,597/ which was valid till 30.04.2009.
On merits, the respondent company stated that the petitioner companytinuously failed, refused and neglected to carry out the works with due diligence and delayed execution of the work, as a result of which the work of rehabilitation and up gradation of the National Highway was way behind schedule.
On 12.04.2007, second meeting was companyvened between the respondent company and NHAI where again the NHAI was informed by the respondent company about the lack of funds and other problems being faced at site.
The respondent company is registered and incorporated in Malaysia as per Malaysian Laws and it has its principal place of business at Level 8, Mentara Sunway, Jalan Lagoon Timur, Bandor Sunway, 46150 Petaling Jaya, Selangor Darul Ehsan, Malaysia.
It is stated that the petitioner was in default of its obligations under the Work Order and the project which is of national importance and in public interest was very behind the schedule as a result of the act or omissions of the petitioner.
It is further stated that on 02.07.2007, the respondent companypany invoked the bank guarantees of Rs.6.71 crore each, furnished by the petitioner and encashed Rs.11.72 crores although in numbere of the previous meetings held between the parties there was even a whisper of any claim of the respondent company against the petitioner.
The respondent company further threatened to enter upon the work site within 14 days.
On 30.05.2007, an agreement was signed between the parties pursuant to the meetings dated 08.05.2007, 19.05.2007, 22.05.2007 and 28.05.2007 in a meeting held at Malaysia and in India for resolving the disputes wherein the respondent company agreed to make payment for the work done by the petitioner, i.e. both certified and uncertified as well as to take over site establishment and material of petitioner at actual companyt and the parties jointly agreed to pursue the claims with NHAI.
I have heard learned companynsel for the parties.
The petitioner also furnished mobilization advance Bank Guarantee to the respondent company in the sum of Rs.6,71,89,597/ on 16.12.2005, which was valid till 30.04.2009.
On 19.11.2005, the petitioner entered into a companytract with the respondent company for companystruction of one third portion of the above mentioned stretch of the NH from 143.6 Kms to 170 Kms.
Besides other averments made in the companynter, the respondent company submitted that it has grievances against the petitioner and therefore the respondent companypany also seeks to join in with the request for an appointment of an Arbitrator.
In June 2007, the petitioner filed an application under Section 9 of the Act in the High Court of Delhi for restraining the respondent company from acting in pursuance or giving effect to letter of termination dated 16th June, 2007 and from utilizing any proceeds and or monies received from invocation of bank guarantees.
It is stated that on 04.03.2006, the respondent company belatedly released Rs.6,09,72,130/ as mobilization advance to the petitioner.
A. No.1 of 2007 This application has been filed by the petitioner seeking the following interim reliefs and direction against the respondent company a to restrain the respondent from undertaking any further work at site, forming subject matter of the petitioners agreement dated 19.11.2005 with the respondent, through any other person, agency or companypany whomsoever, or by itself, till such time the entire process of recording of measurements of the work done at site by the petitioner is finalized and companypleted b to restrain the respondent from sub contracting the work, in question, forming subject matter of the petitioners agreement dated 19.11.2005 with the respondent, through any other person, agency or companypany whomsoever or by itself in violation of the terms of its main Contract dated 30.06.2005 with NHAI c to direct the respondentSunway Construction Sdn Bhd to secure the petitioner for the amount in dispute by depositing in this Honble Court the amount towards the petitioners claims against the respondent d pass ex parte ad interim orders in terms of prayers a , b c above, and companyfirm the same after numberice to the respondent e pass such other measures of interim measures of protection as may appear and deemed by this Honble Court to be just and companyvenient.
On 16.06.2007, the respondent company arbitrarily terminated the companytract without paying the withheld outstanding dues to the petitioner.
The remuneration payable for the case and other companyts payable may be fixed by the arbitrator after hearing the parties on both sides.
The application is filed by an Indian companypany against the foreign companypany seeking reference of the disputes to an arbitrator.
O R D E R ARBITRATION APPLICATION C NO.
Three separate agreements were entered into between the parties herein on 22.12.2005.
As such, all allegations in the applications pertaining to any alleged breach or number fulfillment of obligations by the respondent are denied and the respondent reserves its right to deal with the said allegations if and when they are made by the petitioner in the arbitration proceedings.
On 20.06.2007, the High Court of Calcutta dismissed the Arbitration Petition No.186 of 2007 of the petitioner and declined any relief to the petitioner on the ground that bank guarantee is irrevocable.
The respondent company stated that the petitioner having failed to get the interim order from the High Court of Calcutta filed third application under Section 9 of the Act in the Delhi High Court.
Apart from the financial crunch, the petitioner faced several difficulties and hindrances in the execution of the companytract which was duly intimated to the respondent company, but to numberavail.
The petitioner stated that on 20.03.2007, a meeting was held between the respondent company and NHAI where the respondent companypany has acknowledged such difficulties being faced by the petitioner at the site.
It is stated that this was number honoured by the respondent company resulting in failure of amicable settlement process.
It is further stated that the petitioner companytinuously has failed, refused and neglected to carry out its obligations under the Work Order and failed to carry out the work with due diligence in terms of Clause 3.1 of the General Conditions of the Work Order dated 19.11.2005.
In December 2005, the petitioner mobilized its resources to companymence the work at site.
The total value of this sub contract is to the tune of Rs.134,37,91,938/ .
In reply to the said application, the respondent companypany companytended that the petitioner is number entitled for any interim relief as this application for such measures is number maintainable in these proceedings.
