M/S KAIKARA CONSTRUCTION COMPANY versus STATE OF KERALA AND ORS.

Citation: [2014] 6 S.C.R. 278 · Decided: 01-07-2014 · Supreme Court of India · Bench: S. J. MUKHOPADHAYA · Disposal: Disposed off
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Judgment (excerpt)

A 
B 
[2014] 6 S.C.R. 278 
MIS KAIKARA CONSTRUCTION COMPANY 
v. 
STATE OF KERALA AND ORS. 
(Civil Appeal Nos. 5885-5886 of 2014) 
JULY 01, 2014 
[SUDHANSU JYOTI MUKHOPADHAYA AND 
DIPAK MISRA, JJ.] 
Arbitration and Conciliation Act, 1996: s.11 (6) -
C Appointment of arbitrator - Works contract - Dispute between· 
the parties - Case of the appellant that the Company had 
completed a major portion of the work - According to 
respondents, only 41% of the work was completed - High 
Court dismissed application filed by appellant u/s.11 (6) on the 
D ground that no arbitrator agreement existed - On appeal, 
Held: Parties filed joint application showing the name of the 
arbitrator mutually agreed to by the parties - In view of stand 
taken by the parties and in view of mutual agreement for 
arbitration by retired High Court Judge, without going into the 
E question of merit, the impugned order set aside and matter 
referred to arbitrator - Parties to negotiate and settle the terms 
and conditions of arbitration. 
. 
The appellant entered into a work contract with the 
respondent. Dispute arose between them. The case of 
F appellant was that the company had completed a major 
part of the work. This was disputed by the respondents 
who claimed that only 41% of the work was completed 
based on the original contract price. The appellant 
requested for appointment of a 'Dispute Review Expert" 
G as stipulated in the General conditions of contract. 
H 
However, no appointment was made. The appellant filed 
application under Section 11 (6) of the Arbitration and 
Conciliation Act, 1996. The High Court dismissed the 
278 
MIS KAIKARA CONSTRUCTION COMPANY v. STATE 279 
OF KERALA 
application on the ground that no arbitration agreement 
A 
existed. The instant appeals were filed challenging the 
order of the High Court. 
Disposing of the appeals, the Court 
HELD: In the letter of acceptance dated 21.07 .2005, 
B 
the Superintendent Engineer intimated the appellant the 
acceptance of the offer given by the appellant. It was 
specifically mentioned that all terms and conditions of 
notice inviting tenders and tender documents shall be 
binding on the said contract and the contractor. In the 
C 
bidding document supplied to the appellant by 
respondent no. 3 arbitration clauses were incorporated 
at clause 25 and 25.3. [Para 12) [285-B-C] 
2. In the agreement clause (3), it was mentioned that 
0 
the parties to the contract agreed and undertake the 
conditions that arbitration shall not be means of 
settlement of disputes or claims or anything on account 
of the .said contract. The instant case was heard arid 
judgment was reserved. Subsequently, parties filed joint 
E 
application showing the name of the arbitrator mutually 
agreed to by the parties. In view of stand taken by the . 
parties and as they mutually agreed for arbitration by 
retired Hon'ble Judge of the Kerala High Court, without 
going into the question of merit, the impugned order is 
F 
set aside and the matter is referred to Hon'ble Mr. Justice 
K. John Mathew (retired). The parties will negotiate and 
settle the terms and conditions of arbitration. [Paras 13 
to 15) [285-F-G; 286-E-F] 
M.K. Abraham and Company v. State of Kera/a and Anr. 
G 
(2009) 7 SCC636: 2009 (10) SCR 395 - referred to. 
Case La* Reference: 
2009 (10) SCR 395 
Referred to 
Para 1 
H 
280 
SUPREME COURT REPORTS 
[2014) 6-S.C.R. 
A 
CIVIL APPELLATE JURISDl8TION : CIVIL APPEAL Nos. 
5885-5886 of 2014. 
From the Judgment and order dated 19.07.201 O in AR No. 
39/2009, dated 02/02/2011 in AR No. 39/2009 .. RP No. 816/ 
B 2010 of the High Court of Kerala at Ernakulam. 
c 
Altaf Ahmad, Babu Thomas K., Wills Mathews, Rabin 
Majumder for the Appellant. 
M.T. George, Kavita K.T. for the Respondent. 
The Judgment of the Court was delivered by 
SUDHANSU JYOTI MUKHOPADHAYA, J. 1. Leave 
granted. 
D 
2. These appeals are. directed against order dated 
19.07.2010 passed by the High Court of Kerala at Ernakulam 
in Arbitration Request No.39 of 2009. By the impugned order, 
the appellant's prayer under Section 11 (6) of the Arbitration 
and Conciliation Act, 1996 for appointment of arbitrator has 
E been rejected by the High Court. 
3. The factual matrix of the case is as follows: 
On 27.1.2005, the appellant submitted tender, which was 
accepted by the respondents on 21.7.2005. The possession 
F of the work site was handed over to the appellant on 2.9.2005. 
The period for completion of the contract expired on 1.9
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