Authority: High Court at Calcutta, Commercial Division

Order Date: 12 June 2026 (Reserved on 08.06.2026)

Case Overview

  • Parties: Petitioners – M/S. MHPL INFRA JV (joint venture of Petitioners No. 2 & 3); Respondents – RITES LIMITED (Respondent No. 1) on behalf of Respondent No. 2.
  • Contract: Agreement dated 26 August 2021 for railway infrastructure works (earthwork, RCC box culverts, buildings, structural steel, track linking, etc., excluding rails and PSC sleepers) for the Buxar Thermal Power Project at Chausa, Bihar (inside plant and railway land).
  • Tender & Acceptance: Tender invited by Respondent No. 1; MHPL INFRA JV declared successful; Letter of Acceptance issued on 15 April 2021, corrected on 2 June 2021 to reflect correct contracting entity; agreement executed on 26 August 2021.
  • Dispute Background: Petitioners mobilised resources but faced alleged non‑availability of continuous work fronts, delayed site hand‑over, delayed drawing approvals, storage issues, and delayed payments. Respondents attributed delays to petitioners’ alleged inadequate mobilisation.
  • Foreclosure Attempt: From March 2022, petitioners sought contract foreclosure; respondents refused and demanded time extensions.
  • Arbitration Notice: Petitioners issued notice under Section 21 of the Arbitration & Conciliation Act on 24 July 2024 (as per Clause 25 of the General Conditions of Contract). Respondents replied on 8 August 2024, disputing procedural compliance and claiming the notice format was non‑conforming.
  • Prior Litigation: Petitioners earlier approached Delhi High Court for arbitrator appointment; that proceeding was disposed on 4 February 2025, permitting approach to the appropriate forum.
  • Petition Before Calcutta High Court: Filed under Section 11(6) of the Arbitration Act seeking appointment of an arbitrator; petitioners argue arbitration clause exists and objections raised by respondents are matters for the arbitral tribunal.

Legal Analysis

  • Validity of Arbitration Agreement: Clause 25 of the General Conditions of Contract (amended by Correction Slip No. 3) contains a clear arbitration clause; no party disputes its existence.
  • Limitation: Notice under Section 21 was issued on 24 July 2024; petition filed in February 2025, well within the three‑year limitation period.
  • Scope of Referral Court: Citing Supreme Court decisions (SBI General Insurance Co. Ltd. vs. Krish Realty Pvt. Ltd., 2024 SCC Online SC 1754; Office of Alternative Architecture vs. Ircon Infrastructure, 2025 SCC OnLine SC 1098) the Court reiterates that under Section 11 the court’s examination is limited to (i) existence of a valid arbitration agreement and (ii) limitation period. Issues of arbitrability, procedural compliance, claim value (> Rs 2 Crore) and notice format are for the arbitral tribunal under Section 16 (Kompetenz‑Kompetenz).
  • Objections by Respondents: Claim exceeding Rs 2 Crore and alleged non‑conformity of notice format are deemed merits‑related objections, not within the court’s purview at this stage.
  • Settlement Willingness: Respondents expressed willingness to settle post‑descoping but noted petitioners have not completed required formalities; the Court notes this acknowledgment of live disputes supports appointment of an arbitrator.

Final Outcome

  • Appointment: Mr. Sabir Ahmed, Advocate (Mobile No. 9007434193), is appointed as the Sole Arbitrator to adjudicate all disputes arising from the contract dated 26 August 2021.
  • Conditions: The arbitrator must comply with disclosure requirements under Section 12 of the Arbitration Act and may fix his/her remuneration pursuant to the Fourth Schedule of the Act.
  • Jurisdictional Powers: The Sole Arbitrator may consider and decide all preliminary jurisdictional challenges, including maintainability and scope, after giving parties a full hearing, in accordance with Section 16.
  • Merits Reserved: All questions on the merits are left to the arbitrator; the Court’s observations do not constitute an opinion on those merits.
  • Disposition of Petition: The petition and any pending applications are disposed of.

Topics: Arbitration, Contract Dispute