# INDIAN OIL CORPORATION LIMITED v. NCC LIMITED

- **Citation:** [2022] 13 S.C.R. 660
- **Court:** Supreme Court of India
- **Decided:** 2022-07-20
- **Case number:** Civil Appeal No. 341 of 2022
- **Bench:** M. R. Shah, B. V. Nagarathna
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/indian-oil-corporation-limited-v-ncc-limited-35401
- **Pages:** 51

## Headnote

Arbitration and Conciliation Act, 1996 - ss.11(6), 11(6-A),
16 - High Court in exercise of powers u/s.11(6) appointed the
Arbitrators to adjudicate and resolve the disputes between the
parties arising out of the respective contracts - Correctness of -
Held: The issue w.r.t 'accord and satisfaction' of claims is seriously
disputed and is debatable - Whether, in view of the acceptance of
Rs.4,53,04,021/- by the respondent which was released by petitioner
on the offer/letter made by the respondent there is an instance of
'accord and satisfaction' of the claims is a good and reasonably
arguable case - It cannot be said to be an open and shut case -
Therefore, even when it is observed and held that such an aspect
with regard to 'accord and satisfaction' of the claims may/can be
considered by the Court at the stage of deciding s.11 application, it
is always advisable and appropriate that in cases of debatable and
disputable facts, good reasonably arguable case, the same should
be left to the Arbitral Tribunal - Therefore, High Court committed
no error in observing that aspects with regard to 'accord and
satisfaction' of the claims or where there is a serious dispute will
have to be left to the Arbitral Tribunal - However, at the same time,
the conclusion arrived at by the High Court that after the insertion
of Sub-Section (6-A) in s.11 scope of inquiry by the Court in petition
is confined only to ascertain as to whether or not a binding
arbitration agreement exists qua the parties before it, which is
relatable to the disputes at hand is not agreed with - Though, the
Arbitral Tribunal may have jurisdiction and authority to decide the
disputes including the question of jurisdiction and non-arbitrability,
the same can also be considered by the Court at the stage of deciding
s.11 application, if the facts are very clear and glaring and in view
of the specific clauses in the agreement binding between the parties,
whether the dispute is non--arbitrable and/or it falls within the
excepted clause - Even at the stage of deciding s.11 application,
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the Court may prima facie consider even the aspect with regard to
'accord and satisfaction' of the claims - In Civil Appeal No.341/
2022, the Arbitrator shall first decide the aspect with regard to
'accord and satisfaction' of the claims and arbitrability of the
disputes with regard to such claims by deciding an application u/
s.16 which is reportedly pending - Arbitrator shall first decide the
jurisdiction of the Arbitral Tribunal and the arbitrability of the claims
- In Civil Appeal No.342/2022, impugned judgment and order
passed by the High Court referring the dispute between the parties
to arbitration and appointing the Arbitrator is set aside - Similarly,
in Civil Appeal No.343/2022, , the impugned judgments and orders
are set aside - Further, in Civil Appeal No.344/2022, impugned
judgment and order passed by the High Court is modified - Only
one claim of the respondent which is declared by the General
Manager as a Notified Claim shall have to be referred to arbitration
and the Arbitrator shall adjudicate only that claim which is declared
by the General Manager as a Notified Claim and the Arbitral
Tribunal shall not have any jurisdiction to adjudicate on any other
claims which as such are not declared as Notified Claims.
Disposing of the appeals, the Court
HELD: 1.1 It is the case on behalf of the petitioner IOCL
that the IOCL had settled the claim of respondent - NCCL
accepting NCCL's offer to grant extension of time; not to give
price adjustment of over 4% of the total contract value and
consequently IOCL condoned the delay of 1493 days and granted
extension of time without applying any price discount. Further
for the delay of 65 days, IOCL applied the price discount of
Rs.6,44,40,021/- i.e. 4% of the total value of contract and
thereafter IOCL released the payment of Rs.4,53,04,021/- against
NCCL's final bill (adjusting price discount of Rs.6.4 Crores as
against Rs.14.8

## Text

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SUPREME COURT REPORTS
[2022] 13 S.C.R.
 [2022] 13 S.C.R. 660
660
INDIAN OIL CORPORATION LIMITED
v.
NCC LIMITED
(Civil Appeal No. 341 of 2022)
JULY 20, 2022
[M. R. SHAH AND B. V. NAGARATHNA, JJ.]
Arbitration and Conciliation Act, 1996 - ss.11(6), 11(6-A),
16 - High Court in exercise of powers u/s.11(6) appointed the
Arbitrators to adjudicate and resolve the disputes between the
parties arising out of the respective contracts - Correctness of -
Held: The issue w.r.t 'accord and satisfaction' of claims is seriously
disputed and is debatable - Whether, in view of the acceptance of
Rs.4,53,04,021/- by the respondent which was released by petitioner
on the offer/letter made by the respondent there is an instance of
'accord and satisfaction' of the claims is a good and reasonably
arguable case - It cannot be said to be an open and shut case -
Therefore, even when it is observed and held that such an aspect
with regard to 'accord and satisfaction' of the claims may/can be
considered by the Court at the stage of deciding s.11 application, it
is always advisable and appropriate that in cases of debatable and
disputable facts, good reasonably arguable case, the same should
be left to the Arbitral Tribunal - Therefore, High Court committed
no error in observing that aspects with regard to 'accord and
satisfaction' of the claims or where there is a serious dispute will
have to be left to the Arbitral Tribunal - However, at the same time,
the conclusion arrived at by the High Court that after the insertion
of Sub-Section (6-A) in s.11 scope of inquiry by the Court in petition
is confined only to ascertain as to whether or not a binding
arbitration agreement exists qua the parties before it, which is
relatable to the disputes at hand is not agreed with - Though, the
Arbitral Tribunal may have jurisdiction and authority to decide the
disputes including the question of jurisdiction and non-arbitrability,
the same can also be considered by the Court at the stage of deciding
s.11 application, if the facts are very clear and glaring and in view
of the specific clauses in the agreement binding between the parties,
whether the dispute is non--arbitrable and/or it falls within the
excepted clause - Even at the stage of deciding s.11 application,
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the Court may prima facie consider even the aspect with regard to
'accord and satisfaction' of the claims - In Civil Appeal No.341/
2022, the Arbitrator shall first decide the aspect with regard to
'accord and satisfaction' of the claims and arbitrability of the
disputes with regard to such claims by deciding an application u/
s.16 which is reportedly pending - Arbitrator shall first decide the
jurisdiction of the Arbitral Tribunal and the arbitrability of the claims
- In Civil Appeal No.342/2022, impugned judgment and order
passed by the High Court referring the dispute between the parties
to arbitration and appointing the Arbitrator is set aside - Similarly,
in Civil Appeal No.343/2022, , the impugned judgments and orders
are set aside - Further, in Civil Appeal No.344/2022, impugned
judgment and order passed by the High Court is modified - Only
one claim of the respondent which is declared by the General
Manager as a Notified Claim shall have to be referred to arbitration
and the Arbitrator shall adjudicate only that claim which is declared
by the General Manager as a Notified Claim and the Arbitral
Tribunal shall not have any jurisdiction to adjudicate on any other
claims which as such are not declared as Notified Claims.
Disposing of the appeals, the Court
HELD: 1.1 It is the case on behalf of the petitioner IOCL
that the IOCL had settled the claim of respondent - NCCL
accepting NCCL's offer to grant extension of time; not to give
price adjustment of over 4% of the total contract value and
consequently IOCL condoned the delay of 1493 days and granted
extension of time without applying any price discount. Further
for the delay of 65 days, IOCL applied the price discount of
Rs.6,44,40,021/- i.e. 4% of the total value of contract and
thereafter IOCL released the payment of Rs.4,53,04,021/- against
NCCL's final bill (adjusting price discount of Rs.6.4 Crores as
against Rs.14.8 Crores) and also returned NCCL's Bank
Guarantee which came to be fully accepted by the respondent
NCCL. It is the case of IOCL that thereafter, it was not open for
the respondent to raise any further claim. Therefore, it is the
case on behalf of the petitioner that, there being 'accord and
satisfaction' for the claim, being an 'excepted claim', it was not
open for the respondent to invoke the arbitration agreement and
request for appointment of an Arbitrator. It is also the case on
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behalf of the petitioner IOCL that in view of the specific decisions
by the General Manager, on "Notified Claims", in view of Clause
9.0.2.0, for the same claims which are not held to be 'Notified
Claims' by the General Manager, the matter cannot be referred
to the Arbitrator in view of the clause pertaining to excluded
matters. On the other hand, it is the case on behalf of the
respondent that acceptance of the amount of Rs.4,53,04,021/-
was under duress and coercion. It is also the case on behalf of
the respondent that earlier offer dated 02.11.2016 was a
conditional one and was in the nature of an offer and subsequently
when the offer was partially allowed, the respondent without any
delay communicated that the decision to partially allow its
application for EOT is unacceptable as the same is not in
accordance with the conditional offer given by the respondent.
[Para 12][703-E-H; 704-A-C]
1.2 Having heard learned Counsel appearing for the
respective parties and in the facts and circumstances of the case,
the issue / aspect with regard to 'accord and satisfaction' of claims
is seriously disputed and is debatable. Whether, in view of the
acceptance of Rs.4,53,04,021/- by the respondent NCCL which
was released by IOCL on the offer / letter made by the respondent
NCCL dated 02.11.2016 there is an instance of 'accord and
satisfaction' of the claims is a good and reasonably arguable case.
It cannot be said to be an open and shut case. Therefore, even
when it is observed and held that such an aspect with regard to
'accord and satisfaction' of the claims may/can be considered by
the Court at the stage of deciding Section 11 application, it is
always advisable and appropriate that in cases of debatable and
disputable facts, good reasonably arguable case, the same should
be left to the Arbitral Tribunal. Similar view is expressed by this
Court in the case of Vidya Drolia (supra). Therefore, in the facts
and circumstances of the case, though it is specifically observed
and held that aspects with regard to 'accord and satisfaction' of
the claims can be considered by the Court at the stage of deciding
Section 11(6) application, in the facts and circumstances of the
case, the High Court has not committed any error in observing
that aspects with regard to 'accord and satisfaction' of the claims
or where there is a serious dispute will have to be left to the
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Arbitral Tribunal. However, at the same time, we do not agree
with the conclusion arrived at by the High Court that after the
insertion of Sub-Section (6-A) in Section 11 of the Arbitration
Act, scope of inquiry by the Court in Section 11 petition is confined
only to ascertain as to whether or not a binding arbitration
agreement exists qua the parties before it, which is relatable to
the disputes at hand. We are of the opinion that though the Arbitral
Tribunal may have jurisdiction and authority to decide the disputes
including the question of jurisdiction and non-arbitrability, the
same can also be considered by the Court at the stage of deciding
Section 11 application if the facts are very clear and glaring and
in view of the specific clauses in the agreement binding between
the parties, whether the dispute is non-arbitrable and/or it falls
within the excepted clause. Even at the stage of deciding Section
11 application, the Court may prima facie consider even the aspect
with regard to 'accord and satisfaction' of the claims. [Para
13][705-C-H; 706-A-C]
1.3 Now, so far as the submission on behalf of the respective
parties on the decision of the General Manager on Notified Claims
in Civil Appeal No.341/2022 arising out of SLP (C) No.13161/
2019 is concerned, the General Manager has decided / declared
that the claims are not arbitrable since they had been settled and
the arbitration agreement has been discharged under Clause
6.7.2.0 of the GCC and no longer existed / subsisted. As observed
hereinabove, the claims had been settled or not is a debatable
and disputable question, which is to be left to be decided by the
Arbitral Tribunal. Therefore, matters related to the Notified
Claims in the facts and circumstances of the case also shall have
to be left to be decided by the Arbitral Tribunal as in the fact
situation the aspect of 'accord and satisfaction' and 'Notified
Claims' both are interconnected and interlinked. Now, so far as
the Civil Appeal No.342/2022 arising out of SLP (C) No.13816/
2019 is concerned, the General Manager in exercise of powers
under Clause 9.0.2.0 had declared that none of the claims of the
respondent is a Notified Claim. From the communication dated
22.06.2018, it appears that the General Manager, after elaborately
dealing with all the alleged Notified Claims of the respondent
has thereafter found that none of the claims made by the
respondent is a Notified Claim. On a conjoint reading of the
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relevant clauses of the GCC viz. Clauses 9.0.1.0 and 9.0.2.0, the
dispute arising out of Notified Claims only, which is included in
the Final Bill of the contractor can be referred to arbitration.
However, as per Clause 9.0.2.0, any dispute or difference on
whether or not a claim sought to be referred to arbitration by the
contractor is a Notified Claim falls within the excluded matters
and the Arbitrator or Arbitral Tribunal shall have no jurisdiction
and/or authority with respect thereto. The dispute or difference
whether or not a claim sought to be referred to arbitration by the
contractor is a Notified Claim shall not and cannot form the subject
matter of any reference or submission to arbitration. Therefore,
on a fair and conjoint reading of Clause 9.0.1.0 and 9.0.2.0, it can
safely be concluded that (i) only the Notified Claims of the
contractor included in the Final Bill of the contractor in
accordance with the provisions of Clause 6.6.3.0 shall have to be
referred to arbitration; (ii) whether or not a claim sought to be
referred to arbitration by the contractor is a Notified Claim or
not, the Arbitrator or Arbitral Tribunal shall have no jurisdiction
at all; (iii) whether or not a claim is a Notified Claim or not shall
have to be decided by the General Manager and that too, prior to
arbitration proceeding with or proceeding further with the
reference. Therefore, once the General Manager, on the basis of
the material on record takes a conscious decision that a particular
claim sought to be referred to arbitration is not a Notified Claim,
such a claim thereafter cannot be referred to arbitration. The
language used in Clauses 9.0.1.0 and 9.0.2.0 is very clear and
unambiguous. As observed hereinabove, parties to the contract
are free to agree on applicability of (1) proper law of contract, (2)
proper law of arbitration agreement and (3) proper law of the
conduct of arbitration. Parties to the contract also may agree for
matters excluded from the purview of arbitration. As observed
by this Court in a catena of decisions, unless the effect of
agreement results in performance of an unlawful act, an
agreement, which is otherwise legal, cannot be held to be void
and is binding between the parties. At this stage, the decision of
this Court in the case of Sreekanth Transport (supra) is required
to be referred to. In the case before this Court, the contract
provided for exclusion of some matters from the purview of
arbitration. A senior officer of the department was given the
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authority and power to adjudicate the same. One of the clauses
provided that the decision of the Senior Officer, being the
Adjudicator, shall be final and binding between the parties. This
Court considered the same as 'excepted matters'. [Para 13.113.3][706-C-H; 707-A-G]
1.4 In that view of the matter, the High Court has misread
and misinterpreted the clauses 9.0.1.0 and 9.0.2.0 and has
seriously erred in holding that where there is contestation or the
decision rendered by the General Manager leaves scope for
argument as to whether the claims alleged by the contractor can
be categorized as Notified Claim is best left to the Arbitral
Tribunal. The dispute whether the claim is a Notified Claim or
not is specifically excluded from the scope, purview and ambit of
the arbitration agreement. Therefore, once such a dispute falls
within the 'excepted matters', any decision by the General
Manager on the issue of Notified Claims cannot be the subject
matter of arbitration proceeding. Therefore, the High Court has
erred in referring the dispute to arbitration and appointing a sole
Arbitrator to adjudicate on the dispute with respect to the claims
which as such are held to be not Notified Claims by the General
Manager. Therefore, the Civil Appeal No.342/2022 arising out
of SLP (C) No.13408/2019 as well as Civil Appeal Nos.343/2022
and 345/2022 arising out of SLP (C) Nos.13813/2019 and 13816/
2019 respectively deserve to be allowed and the impugned
judgment and orders passed by the High Court in respective
arbitration petitions deserve to be quashed and set aside. [Paras
13.4, 13.5][708-C-G]
1.5 In view of the above and for the reasons stated above,
following order is passed.
 (1) Civil Appeal No.341/2022 arising out of the impugned
judgment and order passed by the High Court in Arbitration
Petition No.115/2018 is hereby dismissed. However, it is observed
that the learned Arbitrator shall first decide the aspect with regard
to 'accord and satisfaction' of the claims and arbitrability of the
disputes with regard to such claims by deciding an application
under Section 16 of the Arbitration Act, which is reported to be
pending. The learned Arbitrator shall first decide the jurisdiction
of the Arbitral Tribunal and the arbitrability of the claims within a
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period of three months from the date of first sitting which shall
be within a period of one month from today. All the contentions
and/or defences which may be available to the respective parties
are kept open to be considered by the learned Arbitrator in
accordance with law and on its own merits and considering the
relevant clauses of the contract and the material on record.
 (2) Civil Appeal No.342/2022 arising out of the impugned
judgment and order passed by the High Court in Arbitration
Petition No.356/2018 is hereby allowed. Impugned judgment and
order passed by the High Court in Arbitration Petition No.356/
2018 referring the dispute between the parties to arbitration and
appointing the Arbitrator is hereby quashed and set aside.
 (3) Similarly, Civil Appeal No.343/2022 arising out of the
impugned judgment and order passed by the High Court in
Arbitration Petition No.116/2018 and Civil Appeal No.345/2022
arising out of the impugned judgment and order passed by the
High Court in Arbitration Petition No.406/2018 are allowed and
consequently, the impugned judgments and orders passed by the
High Court in Arbitration Petition Nos.116/2018 & 406/2018 are
hereby quashed and set aside.
 (4) So far as Civil Appeal No.344/2022 arising out of the
impugned judgment and order passed by the High Court in
Arbitration Petition No.407/2018 is concerned, the same is partly
allowed. The impugned judgment and order passed by the High
Court in Arbitration Petition No.407/2018 is hereby modified to
the extent and it is directed that only one claim of the respondent
which is declared by the General Manager as a Notified Claim
shall have to be referred to arbitration and the learned Arbitrator
shall adjudicate only that claim which is declared by the General
Manager as a Notified Claim and the learned Arbitral Tribunal
shall not have any jurisdiction to adjudicate on any other claims
which as such are not declared as Notified Claims. [Para 14][709B-H; 710-A-D]
Centrotrade Minerals & Metal Inc. v. Hindustan Copper
Ltd. (2017) 2 SCC 228 : [2016] 9 SCR 83; United
India Insurance Co. Ltd. v. Hyundai Engg. &
Construction Co. Ltd. (2018) 17 SCC 607 : [2018] 12
SCR 1085; Duro Felguera S.A. v. Gangavaram Port
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Limited (2017) 9 SCC 729 : [2017] 10 SCR 285; United
India Insurance Co. Ltd. v. Antique Art Exports (P) Ltd.
(2019) 5 SCC 362 : [2019] 5 SCR 521; Mayavati
Trading Private Limited v. Pradyuat Deb Burman (2019)
8 SCC 714 : [2019] 12 SCR 123; Vidya Drolia vs Durga
Trading Corporation (2021) 2 SCC 1; Swiss Timing
Limited v. Commonwealth Games 2010 Organizing
Committee (2014) 6 SCC 677 : [2014] 6 SCR 514;
Ambica Construction v. Union of India (2006) 13 SCC
475 : [2006] 9 Suppl. SCR 188; R.L. Kalathia & Co. v.
State of Gujarat (2011) 2 SCC 400 : [2011] 1 SCR 391;
BSNL v. Motorola India (P) Ltd. (2009) 2 SCC 337 :
[2008] 13 SCR 445; National Insurance Co. Ltd. v.
Boghara Polyfab Pvt. Ltd. (2009) 1 SCC 267 :[2008]
13 SCR 638; Zostel Hospitality (P) Ltd. v. Oravel Stays
(P) Ltd. (2021) 9 SCC 765; Datar Switchgears Ltd. v.
Tata Finance Ltd. (2000) 8 SCC 151; DLF Universal
Ltd. & Anr. v. Director, Town and Country Planning
Department, Haryana & Ors. (2010) 14 SCC 1 : [2010]
15 SCR 85; Rajasthan State Industrial Development
and Investment Corporation & Anr. v. Diamond and Gem
Development Corporation Ltd. & Anr. (2013) 5 SCC
470 : [2013] 4 SCR 331 ; Booz Allen & Hamiltan Inc.
v. SBI Home Finance Ltd. (2011) 5 SCC 532 : [2011] 7
SCR 310; DLF Home Developers Limited v. Rajapura
Homes Private Limited and Another 2021 SCC Online
SC 781 - referred to.
Case Law Reference
[2016] 9 SCR 83
referred to
Para 8.1
[2018] 12 SCR 1085
referred to
Para 8.4
[2017] 10 SCR 285
referred to
Para 9.8
[2019] 5 SCR 521
referred to
Para 9.9
[2019] 12 SCR 123
referred to
Para 9.10
[2014] 6 SCR 514
referred to
Para 9.13
[2006] 9 Suppl. SCR 188
referred to
Para 9.15
INDIAN OIL CORPORATION LIMITED v. NCC LIMITED
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[2011] 1 SCR 391
referred to
Para 9.15
[2008] 13 SCR 445
referred to
Para 9.16
[2008] 13 SCR 638
referred to
Para 9.16
(2021) 9 SCC 765
referred to
Para 9.16
(2000) 8 SCC 151
referred to
Para 9.18
[2010] 15 SCR 85
referred to
Para 10.5
[2013] 4 SCR 331
referred to
Para 10.6
[2011] 7 SCR 310
referred to
Para 10.9
CIVIL APPELLATE JURISDICTION : Civil Appeal No.341 of
2022.
From the Judgment and Order dated 08.02.2019 of the High Court
of Delhi at New Delhi in Arbitration Petition No.115 of 2018.
With
Civil Appeal Nos.342, 344, 343 and 345 of 2022.
K. K. Venugopal, AG, V. N. Koura, S. Sirish Kumar, Avneesh
Arputham for M/s Arputham Aruna and Co., Advs. for the Appellant.
Ranjit Kumar, Sr. Adv., K. Parameshwar, Amit George, A.
Sregurupriya, Prasad Hegde, Advs. for the Respondent.
The Judgment of the Court was delivered by
M. R. SHAH, J.
1. As common questions of law and facts arise in this group of
appeals and as such between the same parties and with respect to similar
contracts / agreements, all these appeals are decided and disposed of
together by this common judgment and order.
2. Feeling aggrieved and dissatisfied with the impugned judgment
and orders passed by the High Court of Delhi, New Delhi in respect to
Arbitration Petitions by which, in exercise of powers under Section 11(6)
of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as
"Arbitration Act"), the High Court has allowed the said petitions and has
appointed the learned Arbitrator by referring the dispute between the
parties for arbitration, the Indian Oil Corporation Limited has preferred
the present appeals.
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3. For the sake of convenience, Civil Appeal arising out of Special
Leave Petition No.13161/2019 arising out of the order passed by the
High Court in Arbitration Petition No.115/2018 is treated as the lead
matter.
4. The facts leading to the present appeal in a nut-shell are as
under:
4.1. That, the appellant, Indian Oil Corporation Limited (hereinafter
referred to as "IOCL") floated a tender in respect of the works described
as "Civil, Structural & Associated UG piping works of VGO-HDT,
DHDT & HCDS Units (EPCM-2) for Paradip Refinery Project". The
respondent herein - NCC Ltd. (hereinafter referred to as "NCCL")
was declared the successful bidder. After issuance of the Letter of
Acceptance dated 17.03.2010, a formal agreement was executed
between the parties dated 28.04.2010. The relevant clauses of the
Agreement which may have a bearing on the issues involved in the
present appeals are as under:
"1.21.0.0
"Notified Claim" shall mean a claim of the
CONTRACTOR notified in accordance with the
provisions of Clause 6.6.1.0 hereof.
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CLAIMS BY THE CONTRACTOR
6.6.1.0
Should the CONTRACTOR consider that he is
entitled to any extra payment or compensation in
respect of the works over and above the amounts
due in terms of the Contract as specified in Clause
6.3.1.0 hereof or should the CONTRACTOR dispute
the validity of any deductions made or threatened by
the OWNER from any Running Account Bills, the
CONTRACTOR shall forthwith give notice in writing
of his claim in this behalf to the Engineer-in-Charge
and the Site Engineer within 10 (ten) days from the
date of the issue of orders or instructions relative to
any works for which the CONTRACTOR claims
such additional payment or compensation or of the
happening of other event upon which the
CONTRACTOR bases such claim, and such notice
shall give full particulars of the nature of such claim,
INDIAN OIL CORPORATION LIMITED v. NCC LIMITED
[M. R. SHAH, J.]
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grounds on which it is based, and the amount claimed.
The OWNER shall not anywise be liable in respect
of any claim by the CONTRACTOR unless notice
of such claim shall have been given by the
CONTRACTOR to the Engineer-in-Charge and the
Site Engineer in the manner and within the time
aforesaid and the CONTRACTOR SHALL be
deemed to have waived any and all claims and all his
rights in respect of any claim not notified to the
Engineer-in-Charge and the Site Engineer in writing
in the manner and within the time aforesaid.
6.6.2.0
The Engineer-in-Charge and/or the Site Engineer shall
be under no obligation to reply to any notice of claim
given or claim made by the CONTRACTOR within
the provisions aforesaid or otherwise or to reject the
same and no omission or failure on the part of the
Engineer-in-Charge or Site Engineer to reject any
claim made or notified by the CONTRACTOR or
delay in dealing therewith shall be deemed to be an
admission by the OWNER of the validity of such
claim or waiver by the OWNER of any of its rights
in respect thereof, with the intent that all such claims
otherwise valid within the provisions of Clause 6.6.1.0
read with Clauses 6.6.3.0 and 6.6.3.1 shall be dealt
with/considered by the OWNER at the time of
submission of the Final Bill.
6.6.3.0
Any claims of the CONTRACTOR notified in
accordance with the provision of Clause 6.6.1.0
hereof as shall remain at the time of preparation of
Final Bill by the CONTRACTOR shall be separately
included in the Final Bill prepared by the
CONTRACTOR in the form of a Statement of
Claims attached thereto, giving particulars of the
nature of the claim, grounds on which it is based, and
the amount claimed and shall be supported by a
copy(ies) of the notice(s) sent in respect thereof by
the CONTRACTOR to the Engineer-in-Charge and
Site Engineer under Clause 6.6.1.0 hereof. In so far
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as such claim shall in any manner or particular be at
variance with the claim notified by the
CONTRACTOR within the provision of Clause
6.6.1.0 hereof, it shall be deemed to be a claim
different from the notified claim with consequence
in respect thereof indicated in Clause 6.6.1.0 hereof,
and with consequences in respect of the notified claim
as indicated in Clause 6.6.3.1 hereof.
6.6.3.1
The OWNER shall not anywise be liable in respect
of any notified claim not specifically reflected in the
Final Bill in accordance with the provisions of Clause
6.6.3.0 hereof and any and all notified claims not
specifically reflected and included in the Final Bill in
accordance with the provisions of Clause 6.6.3.0
hereof shall be deemed to have been waived by the
CONTRACTOR. Further the OWNER shall have
no liability in respect thereof and the
CONTRACTOR shall not be entitled to raise or
include in the Final Bill any claim(s) other than a
notified claim conforming in all respects and in
accordance with the provisions of Clause 6.6.3.0
hereof.
6.6.4.0
No claim(s) shall on any account be made by the
CONTRACTOR after the Final Bill, with the intent
the Final Bill prepared by the CONTRACTOR shall
reflect any and all notified claims whatsoever of the
CONTRACTOR against the OWNER arising out
of or in connection with the Contract or work
performed by the CONTRACTOR thereunder or in
relation thereto, and the CONTRACTOR shall
notwithstanding any enabling provision under any law
or Contract and notwithstanding any right of claim in
quantum meruit that the CONTRACTOR could have
in respect thereof, be deemed to have waived any
and all such claims not included in the Final Bill and
to have absolved and discharged the OWNER from
and against the same, even if in not including the
same as aforesaid, the CONTRACTOR shall have
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acted under a mistake of law or fact.
6.6.5.0
Notwithstanding the existence of any claim by the
CONTRACTOR in terms hereof or otherwise, the
CONTRACTOR shall continue and be bound to
continue and perform the works to completion in all
respects according to the Contract (unless the
Contract or works be priorly determined by the
OWNER in terms hereof) and shall remain liable and
bound in all respects under the Contract.
6.6.6.0
The payment of any sum on account to the
CONTRACTOR during the performance of any
work or item of work in respect of which a claim has
been notified by the CONTRACTOR in terms of
Clause 6.6.1.0 hereof or the making or negotiation
of any interim arrangements in respect of the
performance of such work or item of work by the
OWNER, shall not be deemed to be an acceptance
of the related claim by the OWNER, or any part or
portion thereof with the intent that any such payment
shall constitute merely an interim facility or interim
assistance to the CONTRACTOR, and not an
obligation upon the OWNER.
6.7.0.0
DISCHARGE OF OWNER'S LIABILITY
6.7.1.0
The acceptance by the CONTRACTOR of any
amount paid by the OWNER to the CONTRACTOR
in respect of the final dues of the CONTRACTOR
under the Final Bill upon condition that the said
payment is being made in full and final settlement of
all said dues to the CONTRACTOR shall, without
prejudice to the notified claims of the
CONTRACTOR included in the Final Bill in
accordance with the provisions under Clause 6.6.3.0
hereof and associated provisions thereunder, be
deemed to be in full and final satisfaction of all such
dues to the CONTRACTOR notwithstanding any
qualifying remarks, protest or condition imposed or
purported to be imposed by the CONTRACTOR
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relative to the acceptance of such payment, with the
intent that upon acceptance by the CONTRACTOR
of any payment made as aforesaid, the Contract
(including the arbitration clause) shall, subject to the
provisions of Clause 6.8.2.0 hereof, stand discharged
and extinguished except in respect of the notified
claims of the CONTRACTOR included in the Final
Bill and except in respect of the CONTRACTOR's
entitlement to receive the unadjusted portion of the
Security Deposit in accordance with the provisions
of Clause 6.8.3.0 hereof on successful completion
of the defect liability period.
6.7.2.0
The acceptance by the CONTRACTOR of any
amount paid by the OWNER to the CONTRACTOR
in respect of the notified claims of the
CONTRACTOR included in the Final Bill in
accordance with the provisions of Clause 6.6.3.0
hereof and associated provisions thereunder, upon
the condition that such payment is being made in full
and final settlement of all the claims of the
CONTRACTOR shall, subject to the provisions of
Clause 6.7.3.0 hereof, be deemed to be in full and
final satisfaction of all claims of the CONTRACTOR
notwithstanding any qualifying remarks, protest or
condition imposed or purported to be imposed by the
CONTRACTOR relative to the acceptance of such
payment with the intent that upon acceptance by the
CONTRACTOR of any payment made as aforesaid,
the Contract (including the arbitration clause) shall
stand discharged and extinguished insofar as relates
to and/or concerns the claims of the
CONTRACTOR.
6.7.3.0
Notwithstanding anything provided in Clause 6.7.1.0
and/or Clause 6.7.2.0 hereof the CONTRACTOR
shall be and remain liable for defects in terms of
Clause 5.6.0.0 hereof and for the indemnity to the
OWNER in terms of Clause 6.8.2.0, and shall be
and remain entitled to receive the unadjusted balance
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of the Security Deposit remaining in the hands of the
OWNER in terms of Clause 6.8.3.0 hereof.
xxx xxx xxx
9.0.0.0
ARBITRATION
9.0.1.0
Subject to the provisions of Clauses 6.7.1.0, 6.7.2.0
and 9.0.2.0 hereof, any dispute arising out of a Notified
Claim of the CONTRACTOR included in the Final
Bill of the CONTRACTOR in accordance with the
provisions of Clause 6.6.3.0 hereof, if the
CONTRACTOR has not opted for the Alternative
Dispute Resolution Machinery referred to in Clause
9.1.1.0 hereof, and any dispute arising out of any
Claim(s)
of
the
OWNER
against
the
CONTRACTOR shall be referred to the arbitration
of a Sole Arbitrator selected in accordance with the
provisions of Clause 9.0.1.1 hereof. It is specifically
agreed that the OWNER may prefer its Claim(s)
against the CONTRACTOR as counter-claim(s) if
a Notified Claim of the CONTRACTOR has been
referred to arbitration. The CONTRACTOR shall
not, however, be entitled to raise as a set-off defence
or counter-claim any claim which is not a Notified
Claim included in the CONTRACTOR's Final Bill in
accordance with the provisions of Clause 6.6.3.0
hereof.
9.0.1.1
The Sole Arbitrator referred to in Clause 9.0.1.0
hereof shall be selected by the CONTRACTOR out
of a panel of 3 (three) persons nominated by the
OWNER for the purpose of such selection, and should
the CONTRACTOR fail to select an arbitrator within
30 (thirty) days of the panel of names of such
nominees being furnished by the OWNER for the
purpose, the Sole Arbitrator shall be selected by the
OWNER out of the said panel.
9.0.2.0
Any dispute(s) or difference(s) with respect to or
concerning or relating to any of the following matters
are hereby specifically excluded from the scope,
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purview and ambit of this Arbitration Agreement with
the intention that any dispute or difference with
respect to any of the said following matters and/or
relating to the Arbitrator's or Arbitral Tribunal's
jurisdiction with respect thereto shall not and cannot
form the subject- matter of any reference or
submission to arbitration, and the Arbitrator or the
Arbitral Tribunal shall have no jurisdiction to entertain
the same or to render any decision with respect
thereto, and such matter shall be decided by the
General Manager prior to the Arbitrator proceeding
with or proceeding further with the reference. The
said excluded matters are:(i) With respect to or
concerning the scope or existence or otherwise of
the Arbitration Agreement;(ii) Whether or not a Claim
sought to be referred to arbitration by the
CONTRACTOR is a Notified Claim;(iii) Whether
or not a Notified Claim is included in the
CONTRACTOR's Final Bill in accordance with the
provisions of Clause 6.6.3.0 hereof.(iv) Whether or
not the CONTRACTOR has opted for the Alternative
Dispute Resolution Machinery with respect to any
Notified Claim included in the CONTRACTOR's
Final Bill.
9.0.3.0
The provisions of the Indian Arbitration & Conciliation
Act, 1996 and any re-enactment(s) and/or
modification(s) thereof and of the Rules framed
thereunder shall apply to arbitration proceedings
pursuant hereto subject to the following conditions:(a)
The Arbitrator shall give his Award separately in
respect of each Claim and Counter-Claim; and(b)
The Arbitrator shall not be entitled to review any
decision, opinion or determination (howsoever
expressed) which is stated to be final and/or binding
on the CONTRACTOR in terms of the Contract
Documents."
4.2. As per the contract entered into between the parties, the
designated date for commencement of the project was the date of
issuance of FOA i.e. 03.03.2010, and that the scheduled date of completion
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was 02.10.2011. It appears that the execution of the project was delayed,
as a result of which the project was completed only on 28.12.2015. The
NCCL was issued a completion certificate by the IOCL indicating the
date of completion of the project as 28.12.2015. In view of the delay in
completion of the project beyond the scheduled date, the NCCL made a
request for extension of time vide the communication dated 23.05.2016.
While the EOT requests were pending with the IOCL, the NCCL
submitted its final bill dated 05.08.2016 to the Engineer-In-Charge
appointed under the contract between the parties. According to the
NCCL, the NCCL in its final bill dated 05.08.2016 made a specific
reference to the Notified Claims. There were correspondences between
the Engineer-In-Charge and Thyssenkrupp Industrial Solutions India (P)
Ltd. (hereinafter referred to as "TKIS") pending settlement of the final
bill and the request for Extension of Time (EOT). The NCCL responded
to the communication dated 01.11.2016 by the TKIS, vide its response
dated 02.11.2016. It appears that the NCCL conveyed to TKIS that if its
request for EOT were considered favorably and if price adjustment does
not exceed 4%, then, all its extra/additional claims including Notified
Claims submitted by it through various communications and the final bill
should be treated as withdrawn.
4.3. The TKIS having received the aforesaid communication from
the NCCL, made its recommendations vis-à-vis the request for EOT
made by the NCCL. It appears that thereafter, TKIS in its communication
dated 13.01.2017, informed NCCL that it had approved EOT for the
period between 03.10.2011 to 03.11.2015, however, without price discount
as per Clause 4.4.0.0 of the General Conditions of Contract (hereinafter
referred to as "GCC") and that for the period falling between 04.11.2015
to 28.12.2015 which covered the period of 55 days, it had concluded that
the delay was attributable to NCCL. Accordingly, TKIS conveyed to
NCCL that for the later period, as per Clause 4.4.2.0 of the GCC, a
price adjustment discount of 4% would be applicable.
4.4. It is the case on behalf of NCCL that being aggrieved, it
wrote to the IOCL on 23.01.2017 to reconsider its decision and accord
EOT upto the date of completion i.e. 28.12.2015 without making any
adjustment towards price as indicated in the communication dated
13.01.2017.
4.5. That, thereafter, the IOCL released a sum of Rs.4,53,04,021/
-, the amount calculated as per the communication dated 13.01.2017,
after making due adjustments towards taxes etc.
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4.6. It appears that subsequently and after a period of 6&1/2
months (after the settlement of the claim) and after receiving the final
bill payment 8 days earlier, on 08.05.2017, vide communication dated
16.05.2017, NCCL reneged on the letter of 02.11.2016 and alleged that
it was made to withdraw its claim under coercion and it had withdrawn
its Notified Claims as TKIS vide its communication dated 01.11.2016,
had indicated that the review of the final bill and request for EOT would
be considered only if it gave up its insistence on its Notified Claims being
considered.
4.7. That IOCL sent its response vide communication dated
06.06.2017, wherein it stated that none of the claims mentioned in the
final bill were Notified Claims.
4.8. In the above backdrop, NCCL invoked the arbitration clause
contained in the Agreement on 01.07.2017. That, the IOCL, in
accordance with Clause 9.0.2.0 referred the matter regarding arbitrability
of NCCL's claims to the General Manager on 12.07.2017.
4.9. Vide the communication / letter dated 10.11.2017, the General
Manager held that the claims cannot be referred to arbitration and that
the Arbitration Agreement itself does not survive on account of NCCL
withdrawing its Notified Claims. The General Manager held that
therefore there exist no dispute to be referred to arbitration.
4.10. Thereafter the respondent - NCCL approached the Delhi
High Court by filing Arbitration Petition No.115/2018 under Section 11(6)
of the Arbitration Act for appointment of sole Arbitrator. The said petition
was opposed by the IOCL on a number of grounds. However, by overruling
all the objections raised on behalf of the appellant - IOCL, by the
impugned judgment and order, the High Court has allowed the said
arbitration petition and appointed the sole Arbitrator.
4.11. Impugned judgment and order passed by the High Court
dated 08.02.2019 in Arbitration Petition No.115/2018 is the subject matter
of present Civil Appeal No.341/2022 (arising out of Special Leave Petition
No.13161/2019).
5. With respect to other four contracts between the same parties
and with same arbitration clauses, the NCCL's claims were sent to the
General Manager under Clause 9.0.2.0 of the GCC. So far as the Civil
Appeal arising out of SLP No.13408/2019 is concerned, the NCCL did
not approach the General Manager but the Arbitration Petition filed before
the High Court was forwarded by the IOCL to the General Manager for
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its determination under Clause 9.0.2.0 of the GCC. That, in all the
remaining four cases (Civil Appeal Nos.342/2022 to 345/2022), the
General Manager declared that none of the claims were Notified Claims.
6. Thereafter the NCCL approached the High Court by way of
Arbitration Petition Nos.115/2018, 356/2018, 116/2018, 407/2018 and 406/
2018. By the impugned judgment and orders, the High Court has allowed
all the respective applications under Section 11(6) of the Arbitration Act
and by different impugned judgment and orders, has appointed the sole
Arbitrator. Impugned judgment and orders passed by the High Court is
the subject matter of Civil Appeal Nos.341/2022 to 345/2022.
7. Shri K.K. Venugopal, learned Attorney General has appeared
on behalf of the appellant - IOCL and Shri Ranjith Kumar, learned Senior
Advocate has appeared on behalf of the respondent - NCCL.
8. Shri K.K. Venugopal, learned Attorney General appearing on
behalf of the IOCL has vehemently submitted that in the present case
both the parties are governed by the terms of the contract entered into
between the parties viz. the GCC.