STATE OF GOA versus PRAVEEN ENTERPRISES

Citation: [2011] 10 S.C.R. 1026 · Decided: 04-07-2011 · Supreme Court of India · Bench: R.V. RAVEENDRAN · Disposal: Appeal(s) allowed

Cited by 9 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

A 
B 
[2011] 10 S.C.R. 1026 
STATE OF GOA 
v. 
PRAVEEN ENTERPRISES 
(Civil Appeal No. 4987 of 2011) 
JULY 4, 2011 
[R.V. RAVEENDRAN AND A.K. PATNAIK, JJ.) 
Arbitration and Conciliation Act, 1996 - s.11, s.23 r/w 
s.2(9) and s.34 - Appellant-State had entrusted construction 
C work to respondent in terms of a contract...,. Contract contained 
an arbitration clause - Contract terminated by the appellant 
- Respondent raised certain claims and gave a notice to the 
appellant to appoint an arbitrator in terms of the arbitration 
clause - As appellant did not do so, respondent filed 
D application u/s. 11 of the Act for appointment of an arbitrator 
- Application allowed and a sole arbitrator appointed -
Arbitrator considered the claims of the respondent-contractor 
as also counter claims of the appellant and thereafter passed 
arbitral award -Award challenged by respondent uls.34 - The 
E civil court held that the arbitrator could not enlarge the scope 
of the reference and entertain either fresh claims by the 
claimant-respondent or counter claims from the appellant -
Order upheld by the High Court - On appeal, held: Section 
11 of the Act requires the Chief Justice or his designate to 
F either appoint the arbitratorls or take necessary measures in 
accordance with the appointment procedure contained in the 
arbitration agreement - The Chief Justice or the designate 
is not required to draw up the list of disputes and refer them 
to arbitration - Appointment of Arbitral Tribunal is an implied 
G reference in terms of the arbitration agreement - Where the 
arbitration agreement provides for referring all disputes 
between the parties (whether without any exceptions or subject 
to exceptions), the arbitrator will have jurisdiction to entertain 
any counter claim, even though it was not raised at a stage 
H 
1026 
STATE OF GOA v. PRAVEEN ENTERPRISES 
1027 
earlier to the stage of pleadings before the Arbitrator - Where 
A 
however the arbitration agreement requires specific disputes 
to be referred to arbitration and provides that the arbitrator will 
have the jurisdiction to decide only the disputes so referred, 
the arbitrator's jurisdiction is controlled by the specific 
reference and he cannot travel beyond the reference, nor B 
entertain any additional claims or counter claims which are 
not part of the disputes specifically referred to arbitration - In 
the instant case, the. arbitration clause contemplated all 
disputes being referred· to arbitration by a sole arbitrator - It 
referred to an Appointing Authority (Chief Engineer, CPWD), c 
whose role was only to appoint the arbitrator - Though the 
arbitration clause required the party invoking the arbitration 
to specify the disputels to be referred to arbitration, it did not 
require the appointing authority to specify the disputes or refer 
any specific disputes to arbitration nor required the Arbitrator 0 
to decide only the referred disputes - It did not bar the 
arbitrator deciding any counter claims - In the absence of 
agreement to the contrary, the counter claims by the appellant 
were maintainable and arbitrable having regard to s.23 r/w 
s.2(9) of the Act - Consequently the award of arbitrator is 
E 
upheld in its entirety and the challenge thereto by the 
respondent is rejected. 
Under an agreement, the appellant-State of Goa 
entrusted construction work to the respondent. Clause 
25 of the agreement provided for settlement of disputes 
F 
by arbitration. On the ground that the Respondent-
contractor did not complete the work even by the 
extended date of completion, the contract was terminated 
by the appellant. The respondent raised certain claims 
and gave a notice to the appellant to appoint an arbitrator G 
in terms of the arbitration clause. As the appellant did not 
do so, the respondent filed an application under section 
11 of the Arbitration and Conciliation Act, 1996 for 
appointment of an arbitrator. The said application was 
H 
1028 
SUPREME COURT REPORTS 
[2011] 10 S.C.R. 
A allowed and a sole arbitrator was appointed. The 
arbitrator entered upon the reference and called upon the 
parties to file their statement. 
The respondent filed its claim statement before th·e 
8 arbitrator. The appellant filed its Reply Statement with 
counter claim. The arbitrator considered the claims of the 
contractor and counter claims of the appellant and 
thereafter passed arbitral award. Respondent filed 
application under section 34 of the Act, challenging 

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