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Civil · Reportable judgment

Punatsangchhu – 1 Hydroelectric Project Authority, Bhutan vs Larsen & Toubro Ltd.

Court
Supreme Court of India
Date
22 February 2021
Case No.
Civil Appeal No. 693 of 2021
Result
Disposed
Bench
Indu Malhotra, Ajay Rastogi
Citation
[2021] 1 S.C.R. 587 : 2021 INSC 108
Supreme Court Reports [2021] 1 S.C.R. 587 : 2021 INSC 108
Headnote

Arbitration and Conciliation Act, 1996 – s.11 – Contract between appellant-authority and respondent-contractor in relation to a Hydro-electric Project in Bhutan – Disputes between the parties – Respondent sent notice of arbitration to appellant under Clause

67 (ii) of the contract, and nominated its own nominee arbitrator – Appellant stated it was agreeable for arbitration; however, arbitration would be governed by Alternative Dispute Resolution Act, 2013 of Bhutan and the place of arbitration shall be at Thimphu, Bhutan – Thereafter, respondent filed application u/s.11(6) of the Act, 1996 before High Court for appointment of arbitrator on behalf of appellant – High Court held that Clause 67 (ii) of the contract did not indicate that applicability of the 1996 Act would cease on enactment of the Bhutan Act of 2013 – Since appellant had failed to appoint its arbitrator, High Court exercised its jurisdiction u/s.11, and made the appointment and further directed that the two arbitrators would proceed to appoint the presiding arbitrator, and the arbitral proceedings would be governed by the provisions of the 1996 Act – Hence the instant appeal – Meanwhile, the arbitral tribunal was constituted, as the two arbitrators had appointed a presiding arbitrator – However, thereafter, consensus arrived at between appellant and respondent with respect to the applicable statute and the seat of arbitration – Accordingly, order of High Court modified to the extent that all disputes arising out of the contract in question shall be conducted in accordance with the Bhutan Act of 2013 with the seat of arbitration at Thimphu – The tribunal will, however, be at liberty to conduct some of the hearings, in consultation with the parties, at such venues as may be convenient – Alternative Dispute Resolution Act, 2013 (enacted by Kingdom of Bhutan).

As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.

Full Judgment Text

The following Order of the Court was passed: ORDER Leave granted. 1. On 14.04.2009, a Contract Agreement was executed between the Appellant and the Respondent-Contractor for the Construction of Diversion Tunnel, Dam, Intake and Desilting Arrangement including Hydro-mechanical Works of the Punatsangchhu-I Hydro-electric Project located in Wangdue Phodrang District in Bhutan. The contract provided for resolution of disputes through arbitration. The relevant terms of the Contract are as under : Clause 5 (i) (b) The law to which the Contract is to be subject and according to which the Contrac
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