$~2 (2022)

* IN THE HIGH COURT OF DELHI AT NEW DELHI %

Date of Decision: 16th March, 2022 +

ARB.P. 1120/2021

ECOGREEN ENERGY GWALIOR 

PVT. LTD. ….. Petitioner Through: Mr Kapil Sankhla, Mrs Meghna 

Sankhla, Mr Wishwa Pratap 

and Mr Devesh Matta, 

Advocates. 

versus

COMMISSIONER OF MUNICIPAL 

CORPORATION, GWALIOR ….. Respondent Through: Mr Harish Dixit and Mr Sarthak 

Chiller, Advocates. 

CORAM:

HON’BLE MR. JUSTICE VIBHU BAKHRU

VIBHU BAKHRU, J. (ORAL)

1. The petitioner has filed the present petition under Section 11 of  the Arbitration and Conciliation Act, 1996 (hereafter ‘A&C Act’),  inter alia, praying that the nominee arbitrator be appointed on behalf  of the respondent to adjudicate the disputes between the parties. 

2. The parties had entered into a Concession Agreement dated  19.05.2017 for “Implementation of Regional Integrated Solid Waste  Management Project for 16 Urban Local Bodies”.

ARB.P. 1120/2021 Page 1 of 8

3. Certain disputes have arisen between the parties in connection  with the said Concession Agreement. The petitioner had issued a  preliminary termination notice dated 05.10.2020 to the respondent in  terms of Article 9.2(b)(ii) of the Concession Agreement alleging  violation of certain terms of the said Agreement. It is contended that in  terms of the Concession Agreement, the respondent was obliged to  send a proposal for curing the defect/defaults. However, instead of  doing so, the respondent had issued a notice dated 10.11.2020 under  Article 9 terminating the said Concession Agreement. 

4. It is stated that the respondent had also encashed the bank  guarantees furnished in the sum of ₹12,73,00,000/- of the petitioner. 

5. In view of the aforesaid disputes, the petitioner invoked the  Dispute Resolution Clause (Article 11 of the Concession Agreement)  and sought amicable resolution of the disputes. Since the parties could  not resolve their disputes, the petitioner issued a notice dated  13.09.2021 under Section 21 of the A&C Act invoking the Arbitration  Agreement in terms of Article 11.2(a) of the Concession Agreement and also nominated a former Judge of this Court as an Arbitrator. It is  stated that the respondent has failed and neglected to respond to the  said notice. Consequently, the petitioner has filed the present petition. 

6. The respondent has contested the maintainability of the present  petition. According to the respondent, the arbitration is required to be  conducted under the Madhya Pradesh Madhyastham Adhikaran  Adhiniyam, 1983 and not in accordance with the A&C Act. The

ARB.P. 1120/2021 Page 2 of 8

respondent also contends that this Court does not have the territorial  jurisdiction to entertain the present petition as the place of arbitration  is Gwalior. 

7. The learned counsel appearing for the petitioner has countered  the contentions advanced on behalf of the respondent. He submits that  it is apparent that the parties had consciously elected that the disputes  be resolved under the A&C Act and not under the Madhya Pradesh  Madhyastham Adhikaran Adhiniyam, 1983. He also relied on the  decision of the Division Bench of the Madhya Pradesh High Court in  M.P. Road Development Corporation v. Ministry of Road, Transport  and Highways (MORT & H) and Anr.: 2021 SCC OnLine MP 1599 in support of his contention that once the parties have consciously  agreed to refer the disputes to arbitration under the Arbitration and  Conciliation Act, 1996, the provisions of Madhya Pradesh  Madhyastham Adhikaran Adhiniyam, 1983 are inapplicable. 

8. Insofar as the place of arbitration is concerned, he submits that  the parties had agreed that the arbitration shall be conducted under the  Rules of the International Centre for Alternative Dispute Resolution,  New Delhi (ICADR Rules). He submits that the Rules expressly  provided that the place of arbitration would be New Delhi or such  other places where the regional offices of the International Centre for  Alternative Dispute Resolution (ACADR) are located. He referred to  Rule 17 of the ICADR Rules, which reads as under:

17. Place of arbitration.— (1) The place of  arbitration shall be New Delhi or such other place

ARB.P. 1120/2021 Page 3 of 8

where any of the Regional Offices of ICADR is  situated as the parties may agree : 

Provided that failing any agreement between the 

parties, the place of arbitration shall be determined by  the arbitral tribunal having regard to the circumstances  of the case, including convenience of the parties. 

(2) The arbitral tribunal may, after consulting the 

ICADR, meet at any place it considers appropriate for  consultation among its members, for hearing witnesses,  experts or the parties, or for inspection of documents,  goods or other property.” 

9. At this stage it is relevant to refer to the Arbitration Clause.  Article 11.2 of the Concession Agreement reads as under:

“11.2 Arbitration

a. Procedure

Subject to the provisions of Clause 11.1, any 

Dispute which is not resolved amicably shall be 

finally settled by binding arbitration under the 

“Rules of arbitration of International center for 

alternative dispute resolution, New Delhi (The 

Rules)”. The arbitration shall be by a panel of 

three arbitrators, chaired by commissioner, 

Urban Administration and Development Madhya 

Pradesh, and one to be appointed by each Party. 

The Party requiring arbitration shall appoint an 

arbitrator in writing, inform the other Party about 

such appointment and call upon the other party to

appoint its arbitrator. If within 30 days of receipt 

of such intimation, the other Party fails to 

appoint its arbitrator, the Party seeking 

appointment of arbitrator may take further steps 

in accordance with Arbitration Act.

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b. Place of Arbitration

The request for arbitration shall ordinarily be 

Gwalior but by agreement of the Parties, the 

arbitration hearings, if required, may be held 

elsewhere.

c. Language

The request for arbitration, the answer to the 

request, the terms of reference, any written 

submissions, any orders and awards shall be 

either in English or Hindi and, if oral hearings 

take place, English or Hindi shall be the language 

to be used in the hearings.

d. Enforcement of Award

The Parties agree that the decision or award 

resulting from arbitration shall be final and 

binding upon the Parties and shall be enforceable 

in accordance with the provisions of the 

Arbitration rules subject to the rights of the 

aggrieved Parties to secure relief from any higher 

forum.”

10. In addition to the above, it is also relevant to refer to Article  16.4 of the said Concession Agreement which reads as under:

“16.4 Governing Law and Jurisdiction

a. This agreement shall be governed by the laws 

of India. The Courts at Gwalior shall have 

jurisdiction over all matter arising out of or 

relating to this Agreement.”

11. A plain reading of the Arbitration Clause (Article 11.2)

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indicates that the parties had agreed that the place of arbitration shall  be Gwalior. However, the parties had also stipulated that the hearings  could be held at another place if the parties so agreed. Concededly,  there is no agreement other than the Concession Agreement [other  than Article 11.2 (b)] regarding the place of Arbitration. Therefore,  there is no ambiguity that the place of arbitration is Gwalior.

12. Rule 17 of the ICADR Rules indicates that the place of  arbitration would be New Delhi or such other place where the regional  office of ICADR is situated as the parties may agree. However, the  proviso further makes it clear that failing any such agreement, the  place of arbitration shall be determined by the Arbitral Tribunal.  Clearly, there is no agreement that the place of arbitration shall be  New Delhi or any other place where the regional office of ICADR is  located. Therefore, it would be for the Arbitral Tribunal to determine  the place of arbitration. As noticed above, Article 11.2(b) of the  Concession Agreement clearly indicates that the place of arbitration is  required to be in Gwalior. 

13. Article 16.2 of the Concession Agreement also expressly  indicates that the Courts at Gwalior will have the exclusive  jurisdiction with regard to the subject matter of the Agreement. Article  11.2 and Article 16.2 of the Agreement, indicate the place of  arbitration and the courts that would exercise jurisdiction in the  matter. 

14. In S.P. Singla Constructions Private Limited v. Construction

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and Design Services, Uttar Pradesh Jal Nigam: Arb.P. 450/2021,  decided on 23.09.2021 the Coordinate Bench of this Court has also  considered the similar issue. In that case, the parties had agreed that  the arbitration shall be conducted under the Rules of ICADR.  However, the venue of arbitration was agreed to be at Lucknow. In the  said context, the Court had held that since the Agreement indicated  that the place of arbitration would be other than New Delhi and  notwithstanding Rule 17 of the ICADR Rules, the High Court  exercising territorial jurisdiction in respect of place of arbitration  would be the appropriate court for entertaining the petition under  Section 11 of the A&C Act. Accordingly, the Court had dismissed the  petition with liberty to the petitioner to approach the Courts at  Lucknow. 

15. Although the learned counsel has sought to distinguish the said  decision, however, this Court does not find any material ground on  which the said decision can be distinguished and the same is binding  on this Court. 

16. Insofar as the question whether the arbitration is required to be  conducted under the A&C Act or the Madhya Pradesh Madhyastham  Adhikaran Adhiniyam, 1983, the decision in the case of M.P. Road  Development Corporation (supra) appears to cover this issue in  favour of the petitioner. However, in view of the conclusion that this  Court does not have the jurisdiction to entertain the present petition  under Section 11 of the A&C Act, it is not necessary for this Court to  examine the said question in these proceedings.

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17. In view of the above, the petition is dismissed with liberty to the  petitioner to approach the appropriate court. 

VIBHU BAKHRU, J

MARCH 16, 2022

RK Click here to check corrigendum, if any

ARB.P. 1120/2021 Page 8 of 8

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