Case Law Details
Godavari Projects (J.V) Vs Union of India (Delhi High Court)
The case of Godavari Projects (J.V) vs. Union of India before the Delhi High Court involves a petition under Section 11(6) of the Arbitration and Conciliation Act, 1996, seeking the appointment of a Sole Arbitrator to resolve disputes arising from a tender process initiated by the respondent for the construction of dwelling units in Mumbai for the Army. The petitioner’s bid was accepted, and a Work Order was issued accordingly.
The applicable General Conditions of Contract contained an arbitration clause, stating that disputes should be referred to the sole arbitration of a serving officer appointed by the Engineer-in-Chief, Army Headquarters. However, arbitration could only commence after the completion or alleged completion of the Works or termination of the Contract. The respondent terminated the contract, leading to disputes between the parties.
The petitioner argued that the termination was due to reasons beyond its control, and it had submitted its final bill, which remained unpaid. The respondent, on the other hand, contended that the termination was justified due to the petitioner’s contractual violations. Moreover, the respondent questioned the maintainability of the petition due to insolvency proceedings against one of the petitioner’s constituents.
The court analyzed the arbitration clause, finding that its scope was limited to determining the existence of an arbitration agreement. Disputes regarding the termination’s validity or the impact of the petitioner’s insolvency were matters for arbitration. The court cited precedents to establish that joint ventures, even if one constituent is insolvent, can still institute arbitration proceedings.
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