- (1.) A.P. No. 897 of 2011 is the earlier petition under Section 9 of the Arbitration and Conciliation Act, 1996 filed by the owner and A.P. No. 903 of 2011 is the subsequent petition under Section 9 of the Act filed by the contractor.
(2.) UNDER an agreement in writing dated March 13, 2009, the contractor was engaged by the owner for the construction of a building intended to be a five- star hotel in Rajarhat. The detailed agreement contains the mechanism for resolution of disputes in clause 67 thereof. The owner carried the Section 9 petition on the owner's understanding that the arbitration agreement contained in clause 67 covered all disputes and differences that could arise between the parties in respect of the agreement. It appears that the contractor also harboured the same perception till it was submitted on behalf of the contractor in course of the present proceedings that the arbitration agreement may be of restricted operation and there may be no arbitration agreement between the parties to cover the disputes that have been carried by way of the rival petitions under Section 9 of the Act. It is necesssary, in such context, to see clause 67 of the agreement between the parties. "Clause 67.0 SETTLEMENT OF DISPUTES All disputes or differences of any kind whatsoever that may arise between the Engineer and the Contractor in connection with or arising out of the contract or subject matter thereof or the execution of their completion, whether during the progress of works or after their completion whether before or after the determination of contract shall be settled as under: 67.1 Mutual Settlement All such disputes or differences shall in the first place be referred by the Contractor to the Owner's Representative in writing for resolving the same through mutual 3 discussions, negotiations, deliberation etc. associating representatives from both the sides and concerted efforts shall be made for reaching amicable settlement of disputes or differences. 67.2 Conciliation/Arbitration a) It is a term of this contract that Conciliation/Arbitration of disputes shall not be commenced unless an attempt has first been made by the parties to settle such disputes through mutual settlement. b) If the Contractor is not satisfied with the settlement by the Owner's Representative on any matter in question, disputes or differences, the Contractor may refer to the Managing Director of the Owner in writing to settle such disputes or differences through Conciliation or Arbitration provided that the demand for Conciliation or Arbitration shall specify the matters, which are in question or subject of the disputes or differences as also the amount of claim, item wise. Only such dispute(s) or difference(s) in respect of which the demand has been made, together with counter claims of the Owner shall be referred to Conciliator or Arbitrator as the case may be and other matters shall not be included in the reference. c) ... d) ... e) ... f) ... g) ... h) ... 67.3 ... 67.4 ... 67.6 ..." It is undeniable that only disputes or differences that arise between the engineer and the contractor in connection with or arising out of the agreement would be matters which could ultimately be carried to arbitration. The opening paragraph in clause 67.0 leads to clause 67.1. The word 'such' in the opening limb of clause 67.1 links it to the disputes and differences which are mentioned in clause 67.0. Though sub-clause (a) of clause 67.2 appears to be a stand-alone clause, there is no substantive agreement reflected therein between the owner and the contractor to carry their disputes and differences under the construction agreement to an arbitral reference. Indeed, the second sub-clause of clause 67.2 refers to "settlement" and the "owner's representative." That a settlement may be brought about by the owner's representative is envisaged in clause 67.1 and covers only the disputes and differences between the contractor and the engineer. It is such settlement that is spoken of in sub-clause (b) of clause 67.2. The remainder of sub-clause (b) of clause 67.2 deals with matters which are unresolved upon any settlement by the owner's representative of the disputes between the contractor and the engineer. In other words, the reference of the matters recognized in sub-clause (b) of clause 67.2 is to be only a continuation of the differences or disputes that had arisen between the contractor and the engineer and remained unresolved despite the redressal mechanism provided therefor in clause 67.1. The rest of the clause appears to be procedural and is concerned with the manner of appointment of the arbitrator and the conduct of the reference. The substantive agreement between the parties to the resolution of the disputes is covered by clause 67 in its opening limb and upto sub-clause (b) of clause 67.2.
(3.) IN the owner's petition under Section 9 of the Act, the grievance is that the contractor had not taken up the work with due diligence and the contractor had failed to adhere to the agreed schedule. The contractor's grievance, on the other hand, is that the owner failed to make timely payments or mobilize the other resources necesssary for the construction work to be carried out or completed. It is evident from the owner's petition that there were no real disputes between the contractor and the engineer. In any event, the petition does not refer to any specific dispute between the contractor and the engineer. Further, on a reading of the agreement, it would be evident that the engineer's duties are only as are specified in clause 2.1 thereof. It is true that a matter of delay could have been raised by the engineer with the contractor, but it does not appear that the owner perceived the arbitration agreement to be as restricted as it turns out to be and the entirety of the petition under Section 9 filed by the owner is fashioned on the basis that the plenary arbitration agreement would cover every dispute that arose between the parties to the contract.;