DHV BV versus TAHAL CONSULTING ENGG. LTD. & ORS.

Citation: [2007] 9 S.C.R. 921 · Decided: 12-09-2007 · Supreme Court of India · Bench: D.K. JAIN · Disposal: Disposed off

Judgment (excerpt)

DINBV 
A 
v. 
TAHAL CONSUL TING ENGG. LTD. & ORS. 
SEPTEMBER 12, 2007 
(D.K.JAIN,J.) 
B 
Arbitration and Conciliation Act, 1996: 
s. I I-Appointment of arbitrator-Powers of appointing authority-
Nature and scope of-Held: For the purpo~e of deciding whether arbitral C 
procedure is to be set into motion or not, the CJ or his designate has to 
examine and record his satisfaction that an arbitration agreement exists 
between parties and that in respect of the agreement a live issue, to be 
decided between parties, still exists-On being so satisfied, he may allow the 
application and appoint an arbitral tribunal or a sole arbitrator, as the case D 
may be-However, if he finds and is convinced that the claim is a dead one 
or is patently barred by time, he may hold so and decline the request for 
appointment of an Arbitrator. 
s.11 (6)-Application for appointment of arbitrator after completion of 
contract-Consultancy contract-Agreement between parties stipulating E 
income tax liability to be borne by employer on payments to be made by it 
to consultant-After completion of contract and payments received for services 
rendered, consultant received notice from Income Tax Department u/s 148 of 
Income Tax Act-Claim regarding payment of Income Tax on remittance 
made by employer to consultant in respect of the contract-On the questions: 
(i) Whether after completion of contract there is still an enforceable arbitration 
.agreement between the parties and (ii) whether claim of consultant was stale 
and barred by limitation-Held: ft was performance of contract that had 
come to an end, b.ut contract is still in existence insofar as the dispute arising 
under clause I.JO thereof, i.e., liability to pay income tax on payments made 
F 
to consultant, is concerned-An enforceable arbitration agreement exists G 
between the parties-Claim made by consultant in respect of income tax dues 
would fall within the ambit of arbitration agreement between parties-
Subsequent creation of an additional payment by Income Tax Department in 
respect of payment by employer to consultant has given rise to a live dispute 
921 
H 
922 
SUPREME COURT REPORTS 
[2007] 9 S.C.R. 
A requiring settlement between parties in terms of arbitration agreement-
Thus, prima facie, claim made by consultant is not barred by limitation-
Therefore, application al/owed-Arbitrator appointed. 
B 
SBP & Co. v. Patel Engineering Ltd. & Anr., [2005) 4 SCR Supp. 688, 
[2005) 8 sec 618, relied on. 
CIVIL ORIGINAL JURISDICTION: Arbitration Petition No. 17 of2006 
(Under Section 11(6) of the Arbitration and Conciliation Act, 1996) 
Sanjay Bansal, H.S. Bhatti, G.K. Bansal and Reepak Kansai for the 
C Petitioner. 
D 
Pramod Dayal and R. Nedumaran for the Respondents. 
The Order of the Court was delivered by 
D.K. JAIN, J. I. This is a petition under Section 11 (6) of the Arbitration 
and Conciliation Act, 1996 (for short 'the Act') for the appointment of an 
Arbitrator for adjudication of the disputes which are stated to have arisen 
between the parties. 
2. The petitioner M/s DHV Consultants BY (for short 'DHV') is a foreign 
E company registered in Netherlands, providing consultancy and engineering 
group services in aviation; spatial planning in environment, transportation 
and water with expertise in water management and water planning. Respondent 
"Ko. I - Mis Taha! Consulting Engineers Limited (hereinafter referred to as 
'Taha!') is also a consultant foreign company based in Israel and respondent 
No.2 is the Water Resources Organisation, PWD, Government of Tamil Nadu 
F (hereinafter referred to as 'TNPWD'). 
3. The facts, relevant for the disposal of this petition, are as follows: 
On 1st December, 1997, an agreement (hereinafter referred to as the 
'main contract') was signed between Taha! and TNPWD, with DHV and two 
G other concerns, namely, Lahmeyer International of Germany and Consulting 
Engineering Services (India) Ltd., as sub-consultants, for providing management 
consultancy and technical assistance services for the Tamil Nadu Water 
Resources Consolidation Project. Subsequently, in March, 1998, a further 
sub-consultancy agreement (hereinafter referred to as the 'sub-contract') was 
H signed between Tahal and DHV for providing services in respect of the main 
DHV BV v. T AHAL CONSUL TING ENGG. [D.K. JAIN, J.] 
923 
contract, scope whereof was defined in the conditions of both the said A 
agreements. 
4. As per clause I. I 0 of the special conditions of the main 

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