In a recent development, the Bombay High Court dismissed an arbitration application filed under Section 11 of the Arbitration and Conciliation Act, 1996, in connection with the construction of the Ghatkopar-Mankhurd Link Road Flyover (GMLR flyover) project. The dispute arose between the applicant and Respondent No.1 over various claims and disagreements related to the project. The GMLR flyover project, initiated through an E-Tender Notice in 2016, invited bids for the construction of the flyover, foot over bridges, and a vehicular underpass. The applicant’s bid was accepted, and the contract was awarded in December 2016. Despite the project’s planned completion by July 2019, delays and additional works extended the timeline. The applicant claimed that disruptions and unforeseen circumstances caused delays in the project’s progress. Extensions of the contract period were sought and granted on multiple occasions. The project achieved substantial completion in July 2021, with final completion extended to September 2021 due to additional variation works. Disputes arose between the parties regarding claims, leading the applicant to initiate pre-arbitral steps in accordance with the General Conditions of Contract (GCC). A committee was appointed to settle the disputes, but the pre-arbitral procedure did not yield a favorable outcome for the applicant. Subsequently, the applicant issued a notice invoking arbitration under Clause 96 of the GCC.
The key contention in the dispute was whether Clause 96 of the GCC constituted an Arbitration Agreement between the parties. The court held that the modified Clause 96 did not contain elements of an arbitration agreement, as it lacked any reference to arbitration or the appointment of an arbitrator. The court emphasized that the absence of such language indicated that the parties did not intend to resolve their disputes through arbitration. The court distinguished the case from previous judgments, emphasizing that the modified Clause 96 did not explicitly refer to arbitration, unlike the clauses in other cases. The court also cited a Supreme Court ruling stating that a clause’s title or the declaration that a decision is final and binding does not automatically convert it into an arbitration agreement.
As a result of the court’s decision, the arbitration application was dismissed, signalling a continuation of the dispute resolution process through alternative means. The GMLR flyover project dispute will now proceed based on the court’s ruling, with implications for future arbitration agreements in construction contracts.
CASE: Kalpataru Projects International Ltd v/s. Municipal Corporation of Greater Mumbai.
NAME: NIDHI SINGH, BBA.LLB (H), SYMBIOSIS LAW SCHOOL; PUNE,INTERN UNDER LEGAL VIDHIYA
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