2019 (5) TMI 1216 - HC - Indian Laws

Review petition - Appointment of an Arbitrator - applicability of Bihar Public Works Contract Dispute Arbitration Act, 2008 - HELD THAT - Firstly in the present case pertaining to the State of Bihar, the Bihar Public Works Contract Dispute Arbitration Act, 2008 was not reserved for the asset of a President of India, hence, the same has not received the asset of the President of India, as provided for under Article 254 of the Constitution of India, secondly it is clear that in case of conflict between the State Act and the Central Act, Central Act would prevail in view of Section 8 of the Bihar Public Works Contract Dispute Arbitration Act, 2008, thirdly, only in cases where the agreement in between the parties is silent with regard to the arbitration being conducted in accordance with the provisions of Arbitration and Conciliation Act, 1996 or in case there is specific stipulation of resolution of the dispute by reference to the State Tribunal, the parties would have a forum of Tribunal under the Bihar State Act, 2008 for resolution of the dispute. The judicial propriety and judicial discipline requires this Court to follow the decision rendered by the Hon'ble Apex Court in identical matters. Since the agreement in question dated 26.2.2015, governed by the provisions of the Standard Bidding document and Clause-25 of the General Condition of contract, provides for settlement of dispute and arbitration to be conducted in terms of the provisions of the Arbitration and Conciliation Act, 1996, the Bihar Public Works Contract Dispute Arbitration Act, 2008 will not apply and the provisions of the Arbitration and Conciliation Act, 1996 will apply - Therefore, since the parties have agreed to resolve the disputes amongst them by taking recourse to the remedy available under Clause-25 of the agreement, i.e in terms of the provisions of the Arbitration and Conciliation Act, 1996, this Court deems it fit and proper to recall the order dated 4.10.2018 passed in CWJC No. 13292 of 2018, whereby and whereunder the petitioner was directed to move the Bihar Public Works Contract Disputes Arbitration Tribunal, and grants liberty to the petitioner to take recourse to appropriate remedy available under the Arbitration and Conciliation Act, 1996 for appointment of an Arbitrator for resolving the dispute, which has arisen in between the parties. In view of the fact that interim protection had been granted by this Court not only in the order dated 30.11.2018 passed in CWJC No. 13292 of 2018, but also by an order dated 10.4.2019 passed in the present case, this Court deems it fit and proper to extend the same protection to the petitioner herein for a period of eight weeks from today. Review Petition allowed.

Summary

Issues Involved:
1. Maintainability of the reference case before the Bihar Public Works Contract Disputes Tribunal.
2. Applicability of the Arbitration and Conciliation Act, 1996 versus the Bihar Public Works Contracts Arbitration Tribunal Act, 2008.
3. Judicial propriety and judicial discipline in following Supreme Court decisions.
4. Interim protection for the petitioner.

Detailed Analysis:

Issue 1: Maintainability of the Reference Case Before the Bihar Public Works Contract Disputes Tribunal
The petitioner initially moved the Tribunal by filing a petition (Reference Case No. 341 of 2018) on 21.12.2018. However, the Tribunal observed that the reference case was not maintainable based on the Supreme Court's decision in Civil Appeal No. 3344 of 2018 (State of Bihar & Ors. v. M/S Brahmaputra Infrastructure Ltd.). The Supreme Court had ruled that the Arbitration and Conciliation Act, 1996 (Central Act) applies when there is an arbitration agreement stipulating its applicability, thus excluding the Bihar Public Works Contracts Arbitration Tribunal Act, 2008 (State Act).

Issue 2: Applicability of the Arbitration and Conciliation Act, 1996 Versus the Bihar Public Works Contracts Arbitration Tribunal Act, 2008
The petitioner argued that the State Arbitral Tribunal is competent to adjudicate disputes arising from the agreement. They cited the Supreme Court's judgment in Madhya Pradesh Rural Road Development Authority & Anr. v. L.G. Chaudhary Engineers and Contractor, which held that state laws on arbitration could prevail if they have received presidential assent and are not repugnant to the Central Act. The Bihar Act, 2008, however, had not received presidential assent, and Section 8 of the Bihar Act stated that in case of conflict, the Central Act would prevail. Therefore, the Central Act was applicable.

Issue 3: Judicial Propriety and Judicial Discipline in Following Supreme Court Decisions
The court acknowledged the need to follow the Supreme Court's decisions for judicial propriety and discipline. The Supreme Court’s judgment in M/S Brahmaputra Infrastructure Ltd. was considered authoritative, stating that the Central Act applies when an arbitration agreement stipulates its applicability, and the Bihar Act, 2008 does not apply in such cases. The court found no inconsistency between this judgment and the one in Madhya Pradesh Rural Road Development Authority, as the latter involved a state act with presidential assent, unlike the Bihar Act.

Issue 4: Interim Protection for the Petitioner
The court extended the interim protection granted to the petitioner in earlier orders for eight weeks, allowing the petitioner to seek appropriate remedies under the law without prejudice.

Conclusion:
The court concluded that the agreement in question, governed by the Standard Bidding Document and Clause-25 of the General Condition of Contract, mandates arbitration under the Arbitration and Conciliation Act, 1996. Consequently, the Bihar Public Works Contracts Arbitration Tribunal Act, 2008 does not apply. The court recalled its earlier order directing the petitioner to move the Bihar Public Works Contract Disputes Arbitration Tribunal and granted the petitioner liberty to seek remedy under the Arbitration and Conciliation Act, 1996. The review petition was allowed, and interim protection was extended to the petitioner for eight weeks.