Mutual consultation has to be explored. If the same does not fructify, an adjudicator has to be appointed: Delhi High Court
W.P.(C) 1926/2023
FANS A.S. v. MEJA URJA NIGAM PRIVATE LIMITED
The Petitioner (Fans A.S) is a company incorporated under the laws of the Czech Republic and has its office in Noida, Uttar Pradesh. The Petitioner has filed the current petition against the Respondent (Meja Urja Nigam Private Limited), a wholly owned subsidiary of NTPC seeking directions to the Respondent to initiate adjudication proceedings immediately upon completion of the mutual consultation proceeding. Petition before the JUSTICE PRATHIBA M. SINGH.
FACTS OF THE CASE
The Petitioner was awarded projects for supply and erection of cooling towers. The contracts were governed by the General Conditions of Contract (GCC).
On 10th February, 2022, the Petitioner sent a letter to the Respondent seeking initiation of mutual consultation between the parties as per the GCC.
This was not initiated and a second letter was sent for the same on 22nd February, 2022. On 25th March, 2022 and 27th May, 2022 the mutual consultation meetings were held between the parties. On 31st October, 2022 the Petitioner was issued a certificate from the Respondent with respect to approval for MEJA IDCT 2A evaluation test.
Even after the issue of the above certificate the dispute between the parties was not at rest. The Petitioner sent a letter on 7th November, 2022 seeking release of certain payments. On the said date the Petitioner also sent an email requesting the acceptance of claim of the Petitioner in terms of the second mutual consultation meeting (of 27th May 2022) or to appoint an adjudicator by 11th November 2022.
The acceptance of claim nor the appointment of the adjudicator as per the General Conditions of Contract did not take place.
Thus, the Petitioner had to resort to filing the current writ petition seeking directions to the Respondents to comply with the clause 6 of the General Conditions of Contract.
Mr. Taneja, ld. Counsel appearing on behalf of the Respondent, submitted that certain works were still outstanding, hence, while the Respondent had no objection in starting the consultation proceedings it had to hold back due to pendency of the said works.
JUDGEMENT
The Court after examining the clause 6.1.1 of the contract stated that the mutual consultation has to be explored. If the same turned out to be counterproductive then an adjudicator had to be appointed, who should give a decision within 28 days.
The Court further emphasizing on the reasoning behind such clauses stated that these clauses were meant to ensure that disputes were resolved in an expeditious manner as the projects involve huge sums of money and delays in the same could result in disruption of businesses.
Therefore, the Court was of the opinion that the terms of clause 6 of the GCC had to be explored and an adjudicator deserves to be appointed in the current case.
Thus, appointing Justice G.S. Sistani (Retd.) as the ld. adjudicator in the matter. The parties were directed to appear before the ld. adjudicator on 1st March, 2023 at 4:00 pm. A lump sum of Rs. 5 lakhs was fixed as fees of the ld. adjudicator, payable equally by both parties.
Thus, disposing the petition along with all pending applications.
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JUDGEMENT REVIEWED BY ADITYA G S.
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