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TMI Blog2018 (11) TMI 1229X X X X Extracts X X X X X X X X Extracts X X X X ..... rol over it from time to time and thus to prevent disputes. The intention is not to provide for a forum for resolving disputes. Thus, in the present circumstances no Arbitrator could have been appointed by the High Court under Section 11(6) of the Arbitration and Conciliation Act, 1996. Appeal allowed. - CIVIL APPEAL No.11249/2018 [Arising out of SLP (CIVIL) No. 23139 of 2016] - - - Dated:- 22-11-2018 - S. A. Bobde And L. Nageswara Rao, JJ. JUDGMENT S.A. BOBDE, J. Leave granted. 2. The Appellant-South Delhi Municipal Corporation (hereinafter referred to as SDMC ) has challenged the impugned order dated 17.06.2016 passed by the learned Single Judge of the Hon ble High Court of Delhi, New Delhi in Arbitration Petition No. 475/2015. By that order, the learned Single Judge allowed the Petition filed by the Respondent-SMS AAMW Tollway Private Ltd. (hereinafter referred to as SMS AAMW ) under Section 11(6) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the Act ). Brief Facts 3. The National Highways Authority of India (hereinafter referred to as NHAI ) entered into a State Support Agreement (hereinafter referred to as the SSA ) d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ised a demand of ₹ 97,08,76,449/- against the Respondent-SMS AAMW. To this Respondent-SMS AAMW responded vide letter dated 11.05.2015, clarifying the mistakes in computation, by the Appellant-SDMC. Thereafter, Appellant-SDMC reconciled the accounts and reduced the demand to ₹ 80,46,31,504/- vide letter dated 13.05.2015. 9. The Respondent-SMS AAMW being dissatisfied with the decision contained in the letter dated 13.05.2015, preferred an appeal under Clause 16.3 of the Agreement vide letter dated 26.05.2015. Subsequently, the Appellant-SDMC vide letter dated 17.06.2015, intimated to the Respondent-SMS AAMW that since there is no arbitration clause in existence between the parties, the arbitration is not acceptable. 10. However, the Respondent-SMS AAMW filed the Arbitration Petition No.475/2015 under Section 11(6) of the Act before the High Court of Delhi for appointment of an Arbitrator relying on Clause 9 of the SSA and Clause 16 of the Agreement dated 14.05.2011. The learned Single Judge of Delhi High Court allowed the petition filed by the present Respondent-SMS AAMW under Section 11(6) of the Act, and appointed Justice Deepak Verma, Former Judge of this Court a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat it provides for the resolution of disputes at two stages. First, by the Competent Officer of the SDMC vide Clause 16.2 followed by the Commissioner of the Municipal Corporation vide Clause 16.3. The First Stage: - If a case arises wherein a Contractor finds that if the work demanded is outside the scope of the agreement or feels the need to dispute any decision of the Competent Officer or if any record created by him is unacceptable, he may request the Competent Officer to decide its representation or give instructions. The Competent Officer is obliged to decide within 30 days from the receipt of such a letter from the Contractor. The Second Stage: - If the Competent Officer fails to decide within 30 days or if the Contractor is dissatisfied with his decision, the Contractor may, within 15 days from receipt of the decision by the Competent Officer, file an appeal to the Commissioner, SDMC. The Commissioner is obliged to afford an opportunity to the Contractor to be heard and the Contractor is entitled to produce evidence in support of this case. At this stage, the Commissioner may give his decision in writing within 30 days. The clause makes the decision compulsoril ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... btain redressal under Clause 16.2. 18. This mechanism is clearly an appeal in the nature of a departmental appeal commonly provided in several department rules including service rules. Such departmental appeals are invariably decided by a designated officer and can only be invoked by a dissatisfied party such as a contractor or an employee. Such appellate powers obviously cannot be invoked by parties unless the language of the provision setting up the appeal provides for it expressly or by necessary implication. It is settled law that a right of appeal is a creature of statute and can only be exercised in the manner provided by the statute (Ref. Ganga Bai v. Vijay Kumar (1974) 2 SCC 393, State of Haryana v. Maruti Udyog Ltd. (2000) 7 SCC 348, Raj Kumar Shivhare v. Directorate of Enforcement (2010) 4 SCC 772) . 19. We see no reason, why this Court should adopt a different approach while construing a clause in a contract executed by a statutory body and providing for an appeal. The language of Clause 16.3 does not lend itself to any other construction other than that it provides for an appeal against the decision of a Competent Officer rendered under Clause 16.2. 20. The R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resent for an agreement to be considered as an arbitration agreement are: (1) The arbitration agreement must contemplate that the decision of the tribunal will be binding on the parties to the agreement, (2) that the jurisdiction of the tribunal to decide the rights of parties must derive either from the consent of the parties or from an order of the court or from a statute, the terms of which make it clear that the process is to be an arbitration, (3) the agreement must contemplate that substantive rights of parties will be determined by the agreed tribunal, (4) that the tribunal will determine the rights of the parties in an impartial and judicial manner with the tribunal owing an equal obligation of fairness towards both sides, (5) that the agreement of the parties to refer their disputes to the decision of the tribunal must be intended to be enforceable in law and lastly, (6) the agreement must contemplate that the tribunal will make a decision upon a dispute which is already formulated at the time when a reference is made to the tribunal. 18. The other factors which are relevant include, whether the agreement contemplates that the trib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aken by the High Court. Admittedly, the clause does not contain any express arbitration agreement. Nor can such an agreement be spelt out from its terms by implication, there being no mention in it of any dispute, much less of a reference thereof. On the other hand, the purpose of the clause clearly appears to be to vest the Superintending Engineer with supervision of the execution of the work and administrative control over it from time to time. It would, thereby, be clear that this Court laid down as a rule that the arbitration agreement must expressly or by implication be spelt out that there is an agreement to refer any dispute or difference for an arbitration and the clause in the contract must contain such an agreement. We are in respectful agreement with the above ratio. It is obvious that for resolution of any dispute or difference arising between two parties to a contract, the agreement must provide expressly or by necessary implication, a reference to an arbitrator named therein or otherwise of any dispute or difference and in its absence it is difficult to spell out existence of such an agreement for reference to an arbitration to resolve the dispute or difference ..... X X X X Extracts X X X X X X X X Extracts X X X X
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