M/S. SSPPL AND M/S. AIL WAS versus SALMA DAM JOINT VENTURE & ANR.

Citation: [2019] 17 S.C.R. 193 · Decided: 14-11-2019 · Supreme Court of India · Bench: A.M. KHANWILKAR, DINESH MAHESHWARI · Disposal: Appeal(s) allowed

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Judgment (excerpt)

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193
WAPCOS LTD.
v.
SALMA DAM JOINT VENTURE & ANR.
(Civil Appeal No. 8595 of 2019)
NOVEMBER 14, 2019
[A. M. KHANWILKAR AND DINESH MAHESHWARI, JJ.]
Arbitration and Conciliation Act, 1996 – s.11(6) –
Appointment of Arbitrators – SDJV, a joint venture of M/s. SSPPL
and M/s. AIL was formed – SSPPL was nominated as a ‘Lead
Partner’ of SDJV with 95% share as compared to 5% of AIL – SDJV
was the successful bidder and that was followed by a Contract
Agreement dated 09.03.2006 between the WAPCOSL and SDJV for
the implementation of the work on “The Reconstruction,
Rehabilitation and completion of Salma Dam Project” in
Afghanistan – Several documents were signed including Conditions
of Particular Applications (CoPA) – Cl.20.1 thereof dealt with
Contractor’s claim and Cl.20.6 dealt with Arbitration – Subsequent
to this, the rates of some of the items were revised, which raised
the total consideration of the agreement – Thereafter, SDJV and
WAPCOSL signed a revised agreement for the rates, referred to as
the Amendment of Agreement (AOA) dated 09.06.2015 – Despite
signing of AOA, SDJV raised certain claims before the Engineer
of WAPCOSL – Subsequent to execution of AOA, dispute arose
between the JV partners – On 21.09.2016, AIL revoked Power-
of- Attorney executed in favour of SSPPL, which authorized it to
appoint arbitrator on behalf of AIL – However, SSPPL filed petition
on behalf of SDJV against WAPCOSL u/s. 11(6) of the Act, 1996
– The said petition was allowed by the High Court and the
arbitrator was appointed – Aggrieved, WAPCOSL filed special
leave petition before the Supreme Court – AIL asserted before the
Court that it did not give consent to SSPPL for appointment of
arbitrator or to file petition u/s. 11(6) of the Act, 1996 – Consequent
to which, the order of the High Court was set aside and parties
were relegated before the High Court for reconsideration of all
the aspects – The High Court once again allowed the said
arbitration petition and appointed a sole arbitrator and held that
SSPPL had authority under the JV as well as Contract Agreement
   [2019] 17 S.C.R. 193
193
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SUPREME COURT REPORTS
[2019] 17 S.C.R.
to represent SDJV, as a leading partner to take recourse to
arbitration – On appeal, held: The Cls 1.2 and 1.3 of Section-01
of the AOA made it clear that no claims will be raised by the
Contractor on any of the pending/settled claims/other claims
resulting out of correspondences made and there will be “no
arbitration” for the settlement of claims – Neither SDJV nor SSPPL
have disputed the execution of AOA – The terms and conditions
specified in AOA leave no manner of doubt that the arbitration
agreement was done away with – Having chosen to adopt that path,
it is not open to the contractor to now take recourse to arbitration
process or to resurrect the claim which has been resolved in terms
of the amended agreement, after availing of steep revision of rates
being condition precedent – Resultantly, the impugned judgment
of the High Court set aside.
Allowing the appeals, the Court
HELD: 1. As regards the first reason weighed with the
High Court that the Technical Committee entertained the five
appeals filed on behalf of the Salma Dam Joint Venture (SDJV),
that in view of this Court cannot undo the effect of terms and
conditions of Amendment of Agreement (AoA) which had
annulled the arbitration clause in the Contract Agreement. There
are at least two other tangible reasons to overturn the stated
opinion of the High Court. First, the Technical Committee was,
as a matter of fact, constituted under clause 2.1 of Section – 02
of AoA by the CMD of WAPCOSL, as is evident from the
communication dated 21.10.2015 sent by WAPCOSL to SDJV.
That fact has been restated in the subsequent correspondence.
The Technical Committee was, therefore, not  constituted in
terms of Clause 20.1 of Conditions of Particular Applications
(CoPA) as has been erroneously assumed by the High Court.
Second, the fact that the Technical Committee processed the
appeals instituted by SDJV does not mean that WAPCOSL had
waived the terms and conditions of AoA, in particular Clauses
1.2 and 1.3 of Section-01 thereof. No averment is found in the
Arbitration Petition to even remotely suggest that it was a case
of waiver express or tacit, by WAPCOSL qua the stipulation
specified in Clauses 1.2 and 1.3 of Section-01 of AoA. Hence,
this reason weighed with the High Court is manifestly wrong and
cannot stand the test of judicia

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