08 February 2024 Arbitration >> Corporate Law   |   Contract Law >> Corporate Law  

A contractor (petitioner) has successfully petitioned a court to appoint a sole arbitrator in a dispute with Bharat Broadband Network Limited (BBNL) over unpaid dues for a BharatNet Phase-II project.

Background:

BBNL had issued a tender for Packages P-2 and P-3 of the BharatNet Phase-II project in Punjab and Bihar. The petitioner won the tender and was awarded two separate Award of Contracts (APOs) for these packages. Work orders were subsequently issued for each APO.

The petitioner completed the work as per the work orders and submitted invoices. However, they allege that BBNL did not pay the second tranche of the invoices for both packages.

Petition to Appoint Sole Arbitrator:

Citing non-payment by BBNL, the petitioner invoked arbitration as per Clause 31 of the original tender document. This clause allowed for disputes arising from the agreement to be referred to sole arbitration.

BBNL's Objections:

BBNL contested the invocation of arbitration on two grounds:

• Separate notices were required: BBNL argued that since separate work orders were issued for each package, the petitioner should have submitted separate notices invoking arbitration under the specific clauses mentioned in each work order (Clause 228 and 214).
• Work order prevails over tender document: BBNL pointed to Clause 29.7 of the work orders, which stated that the work order would take precedence over the tender document in case of any inconsistencies.

Conclusion:

The court acknowledged Clause 29.7 of the work orders. However, it determined that there was no conflict between the arbitration clauses in the tender document and the work orders. The court also found that the petitioner's single notice invoking arbitration, referencing both work orders, was valid as per Clause 31 of the tender document.

  Arbitration and Conciliation Act, 1996