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TMI Blog2024 (3) TMI 908X X X X Extracts X X X X X X X X Extracts X X X X ..... dia) Limited (Formerly known as National Buildings Construction Corporation Ltd.), is a Public Limited Company and Government of India undertaking, engaged in construction of power plants and other infrastructure projects on EPC and/or PMC basis. 3.2 The respondent, M/s Zillion Infraprojects Pvt. Ltd. (Formerly known as Durha Constructions Pvt. Ltd.), is a Private Limited Company, engaged in the construction and infrastructure sector. 3.3 The appellant issued an invitation for tender, being NIT No. 01-WEIR/06 dated 3rd November 2006, for "Construction of Weir with Allied Structures across river Damodar at DVC, CTPS, Chandrapura, Dist - Bokaro, Jharkhand - Package "A" (hereinafter referred to as, "Construction of the Weir"), containing inter-alia, the General Conditions of Contract, Special Conditions of Contract, Bill of Quantity, etc. (collectively referred to as, "Tender Documents"). 3.4 In response to the aforementioned tender, the Respondent submitted its Techno Commercial Bid on 16th November 2006. 3.5 On fulfilment of the tender criteria, vide Letter of Intent No. AGM/RAN/CTPS-AWARD/06/1660 dated 4th December 2006, the appellant awarded the contract for Construction of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ey shall form part of the agreement. Clause 10.0 also states that the L.O.I. shall also form a part of the agreement. It is submitted that the intention is amply clear from Clause 7.0 of the L.O.I., which states that the redressal of dispute between the NBCC and the respondent shall only be through civil courts having jurisdiction of Delhi alone. It further states that the laws applicable to the contract between the parties shall be the laws enforceable in India. It is submitted that merely on account of reference in the L.O.I. to the terms and conditions as contained in the tender issued by the DVC to the NBCC, Clause 3.34 of the Additional Terms & Conditions of Contract would not apply in view of specific modification as stated in Clause 2.0 of the L.O.I. 6. Learned Senior Counsel submits that a mere reference to the terms and conditions without there being an incorporation in the L.O.I. would not make the lis between the parties amenable to the arbitration proceedings. Relying on the judgment of this Court in the case of M.R. Engineers and Contractors Private Limited vs. Som Datt Builders Limited (2009) 7 SCC 696, he submits that unless the L.O.I. specifically provides for inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ating the arbitration clause from the referred document into the contract between the parties. The arbitration clause from another contract can be incorporated into the contract (where such reference is made), only by a specific reference to arbitration clause. (iii) Where a contract between the parties provides that the execution or performance of that contract shall be in terms of another contract (which contains the terms and conditions relating to performance and a provision for settlement of disputes by arbitration), then, the terms of the referred contract in regard to execution/performance alone will apply, and not the arbitration agreement in the referred contract, unless there is special reference to the arbitration clause also. (iv) Where the contract provides that the standard form of terms and conditions of an independent trade or professional institution (as for example the standard terms and conditions of a trade association or architects association) will bind them or apply to the contract, such standard form of terms and conditions including any provision for arbitration in such standard terms and conditions, shall be deemed to be incorporated by reference. So ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the contract between the parties. 12. A perusal of sub-section (5) of Section 7 of the Arbitration Act itself would reveal that it provides for a conscious acceptance of the arbitration clause from another document, by the parties, as a part of their contract, before such arbitration clause could be read as a part of the contract between the parties. 13. It is thus clear that a reference to the document in the contract should be such that shows the intention to incorporate the arbitration clause contained in the document into the contract. 14. The law laid down in the case of M.R. Engineers and Contractors Private Limited (supra) has been followed by this Court in the cases of Duro Felguera, S.A. vs Gangavaram Port Limited (2017) 9 SCC 729 and Elite Engineering and Construction (Hyderabad) Private Limited represented by its Managing Director vs Techtrans Construction India Private Limited represented by its Managing Director (2018) 4 SCC 281. 15. No doubt that this Court in the case of Inox Wind Limited vs Thermocables Limited (2018) 2 SCC 519 has distinguished the law laid down in the case of M.R. Engineers and Contractors Private Limited (supra). In the said case (i.e. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... door when resolution/settlement through mutual discussion and arbitration fails." 18. No doubt that Clause 3.34 provides for a reference of the dispute to the sole arbitration of the Secretary, CEO of Damodar Valley Corporation, Kolkata-54 or to a person appointed by him for that purpose. 19. It will also be apposite to refer to Clauses 1.0, 2.0, 7.0 and 10.0 of the L.O.I., which read thus: "1.0 The work shall be executed you on contractual, financial and technical conditions of contract as contained in the following documents which shall be applicable and binding on you for execution of works and shall form part of agreement with you as also mentioned in the above mentioned NIT-01/WEIR/06 dated November 3, 2006. (a) Notice Inviting Tender (b) General Conditions of Contract (c) Special Conditions of Contract (d) Bill of Quantity 2.0 All terms and conditions as contained in the tender issued by DVC to NBCC shall apply mutatis mutandis except where these have been expressly modified by NBCC. 7.0 The redressal of dispute between NBCC and you shall only be through civil courts having jurisdiction of Delhi alone. The laws applicable to this contract shall be the l ..... X X X X Extracts X X X X X X X X Extracts X X X X
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