Retired Supreme Court Justice S. Ravindra Bhat to Mediate in Major Works Contract Arbitration
In a significant development, the Chhattisgarh High Court has appointed retired Supreme Court Justice S. Ravindra Bhat as the sole arbitrator in the ongoing dispute between M/s Tata Projects Ltd and Chhattisgarh Infotech Promotion Society (CHiPS). The decision was made by Chief Justice Ramesh Sinha, addressing complex legal issues surrounding the arbitration clause and allegations of fraud.
The dispute arises from a Master Services Agreement (MSA) related to the Bharat-Net Project, a flagship rural telecom initiative aimed at providing broadband connectivity across Chhattisgarh. The project, valued at over Rs. 3056 crores, faced delays and allegations of non-payment and breach of contract terms, leading Tata Projects Ltd to seek arbitration.
The court was tasked with addressing multiple objections raised by CHiPS, including the contention that the dispute falls under the exclusive jurisdiction of the Chhattisgarh Madhyastham Adhikaran Adhiniyam, 1983, which governs works contracts involving the state government. CHiPS further argued that Tata Projects Ltd lacked the necessary authorization to file the arbitration application on behalf of the consortium involved in the project, and that the presence of fraud allegations rendered the matter non-arbitrable.
In his judgment, Chief Justice Sinha emphasized the limited scope of judicial review under Section 11 of the Arbitration and Conciliation Act, 1996, which is primarily concerned with the prima facie existence of an arbitration agreement. The court upheld the principle that issues related to the nature of the contract and allegations of fraud can be addressed by the arbitrator.
Highlighting the agreement's arbitration clause, the court determined that the appointment of a single independent arbitrator would best serve justice, opting to appoint a retired Supreme Court judge to ensure impartial resolution of the dispute. Justice S. Ravindra Bhat was selected to oversee the arbitration proceedings, which will take place in Raipur, Chhattisgarh.
This decision marks a pivotal moment in the resolution of contractual disputes involving significant government projects. It underscores the judiciary's role in facilitating arbitration as a means to expedite conflict resolution, while addressing the complexities of legal jurisdiction and contractual obligations.
Bottom Line:
Arbitration - Appointment of Sole Arbitrator - Issue of whether the dispute pertains to a works contract and the arbitrability of fraud allegations can be determined by the Arbitrator - In the interest of justice, a retired Supreme Court Judge appointed as Sole Arbitrator for resolving the dispute between the parties.
Statutory provision(s): Arbitration and Conciliation Act, 1996 Section 11(6), Chhattisgarh Madhyastham Adhikaran Adhiniyam, 1983.
