Arbitration Act - Final Bill - part payment - terms of agreement

Arb. Case No.24 of 2010 Sep­tem­ber 7, 2010 Sohan Lal Vs State of HP Hon’ble Mr. Jus­tice Sur­jit Singh, Judge. For the Peti­tioner : Mr. Sumeet Raj Sharma, Advo­cate. For the Respon­dents : Mr. Ramesh Thakur, Assis­tant Advo­cate Gen­eral. Sur­jit Singh, J (Oral) Heard and gone through the record.

1. Peti­tioner had been awarded some work by the respon­dents, vide Agree­ment Annex­ure R-2. The Agree­ment con­tains an arbi­tra­tion clause, accord­ing to which any dis­pute, aris­ing between the par­ties, is to be referred to a sole Arbi­tra­tor, to be appointed by the Engineer-in-charge/Chief Engi­neer, Himachal Pradesh Pub­lic Works Depart­ment. A dis­pute hav­ing arisen, peti­tioner issued a notice to the Chief Engi­neer to appoint an Arbi­tra­tor, in accor­dance with the arbi­tra­tion clause in Agree­ment Annex­ure R-2. Chief Engi­neer did not appoint any Arbi­tra­tor, within a period of thirty days. There­fore, the peti­tioner has filed the present petition.

2. It is not denied by the respon­dents that the peti­tioner had been awarded a work, vide Agree­ment R-2, and the Agree­ment con­tains an arbi­tra­tion clause. Their plea is that no dis­pute, refer­able to the Arbi­tra­tor, sur­vives, in view of one of the con­di­tions of the arbi­tra­tion clause, which says that the Con­trac­tor (peti­tioner) shall not be enti­tled to demand arbi­tra­tion, in case he does not raise such a demand within ninety days of receiv­ing the infor­ma­tion from the respon­dents that his bills are ready for pay­ment. It is alleged that pay­ment of final bill had been made to the peti­tioner in the year 2002 and, there­fore, the demand for arbi­tra­tion of the dis­pute, made by him, through notice Annex­ure P-4, in the year 2009, is con­trary to the afore­said pro­vi­sion in the Agreement.

3. One of the claims of the peti­tioner has been partly paid only dur­ing the pen­dency of the present peti­tion for appoint­ment of Arbi­tra­tor. The fact is stated in the reply of the respon­dents them­selves. Part pay­ment of a claim, dur­ing the pen­dency of the present peti­tion, gives a lie to the plea that final pay­ments stood made to the peti­tioner in the year 2002. More­over, the respon­dents were directed to pro­duce record, show­ing that final bill of the peti­tioner was paid in 2002. Today, the learned Assis­tant Advo­cate Gen­eral says that there is no record, indi­cat­ing that final pay­ment had been made to the sat­is­fac­tion of the peti­tioner in the year 2002, as pleaded in the reply. In view of the aboves­tated posi­tion, peti­tion is allowed and Shri Satish Sagar, retired Chief Engi­neer, is appointed as Arbi­tra­tor. His fee is fixed at Rs.40,000/-. Ini­tially, the fee will be paid by the peti­tioner, but the Arbi­tra­tor shall deter­mine and adju­di­cate, as to who is liable to pay the fee.

Arbitration Act - Final Bill - part payment - terms of agreement