Parsvnath Developers Limited V. Rail Land Development Authority [i]
FACTS OF THE CASE:
on 18.01.2010 Respondent for development of a plot invited tenders from private parties situated at New Delhi. that Project Land represented by the Respondent belonged to Indian Railways. Tender process was in two phases Petitioner no.1 was declared successful with its bid and on 12th November 2010 Respondent issued a Letter of Demand. On 25th November 2010, Petitioner no.1 paid the said amount and on 26th November 2010 Respondent issued a Letter of Acceptance.
On 29.03.2011 and 31.03.2011, Petitioner no.1 paid to the Respondent, amounts towards the first installment in terms of the Request for Proposal. But within days of granting the approval, Respondent withdrew its consent vide letter dated 16.03.2011. On 13.07.2011, Respondent withdrew its consent. After a delay of several months, approval for the Special purpose vehicle was granted on 02.08.2012 but the development agreement was not executed. The development agreement was finally executed on 31.05.2013 and Article 31 of the development agreement provided for a Dispute Resolution Mechanism. Disputes having arisen between the parties; the Arbitral Tribunal was constituted.
In order to retain the entire money paid by the Petitioners, Respondent terminated the development agreement. This gave rise to the Second Arbitration in which Petitioner sought to recover part of the amount due.
Petitioners thereafter called upon the Respondent to proceed to Arbitration and appointed their Nominee Arbitrator. Respondent refused to appoint its Nominee Arbitrator. Petitioners filed an Arbitration Petition and the Court appointed Respondent’s Arbitrator.
Before the Third Arbitral Tribunal, Petitioners have raised claims in respect of the Retention money as well as losses due to various misrepresentations made by the Respondent. It is averred in the petition that the Third Arbitration is underway and was at the stage of evidence as of 15.12.2019.
Petitioners state that in the Second Arbitration, Arbitral Tribunal declared the PBG dated 30.05.2013 non-establish and thus, illegal withholding of the Performance Bank Guarantee by the Respondent was affirmed.
Petitioners invoked Arbitration vide Notice dated 17.09.2019 demanding the said amount along with losses incurred between 02.11.2015 to 20.08.2019 due to non-availability of immovable assets charged to the Bank. Respondent again refused to appoint an Arbitrator on the ground of the absence of a subsisting Arbitration Agreement, a bar of limitation, and estoppel. Disputes raised in the instant petition by the Petitioners were the subject matter of Second Arbitration, in which an Arbitral Award has already been passed on 25.11.2017. Petitioners have already invoked the Arbitral Clause on three occasions with respect to the disputes arising out of a single development agreement between the parties.
ISSUE OF THE CASE:
Appointment of a Sole Arbitrator to adjudicate the disputes between the parties under section 11(6).
JUDGMENT OF THE CASE:
In the present case, the Court did not expand the scope of examination beyond examining the existence of the Arbitration Agreement and the other issues raised by the Respondent are in the domain of the Arbitral Tribunal. The Court held that there exists an Arbitration Agreement between the parties and therefore, the disputes raised by the Petitioners herein deserve to be referred to Arbitration.
This Article Does Not Intend To Hurt The Sentiments Of Any Individual Community, Sect, Or Religion Etcetera. This Article Is Based Purely On The Authors Personal Views And Opinions In The Exercise Of The Fundamental Right Guaranteed Under Article 19(1)(A) And Other Related Laws Being Force In India, For The Time Being.