BHEL Vs UPRVUNL: Delhi HC Appoints Former CJI Dipak Misra As Sole Arbitrator [Read Order]

While holding that in situations where parties to an agreement do not insist on an exclusive jurisdiction clause or by their conduct waive such condition, it cannot be said that the court other than the one in which exclusive jurisdiction has been vested would be without jurisdiction, the Delhi High Court has appointed former Chief Justice of India Dipak Misra as the sole arbitrator for adjudicating disputes between Bharat Heavy Electricals Limited and the Uttar Pradesh Rajya Vidhyut Utpadan Nigam Limited (UPRVUNL) arising out of contract for work on Harduaghanj thermal power plant.

Justice Navin Chawla appointed the former CJI as the sole arbitrator for deciding disputes arising out of five letter awards as BHEL claimed that it has not been paid for the supply and services besides ruing delays and time extensions.

The court appointed the sole arbitrator while dismissing UPRVUNL's oral objection to its jurisdiction as it heard BHEL's plea for the appointment of an arbitrator.

In this case, the Letters of Award contain an Arbitration Agreement between the parties. Though, UPRVUNL did not file any objection, its counsel orally challenged the jurisdiction of the Delhi High Court to entertain and adjudicate the petitions while stressing that Form 'A' of UPRVUNL shall prevail over the General Conditions of Contract of BHEL as per which only courts of competent jurisdiction under the High Court of Judicature at Allahabad shall have jurisdiction on any action taken or proceedings initiated under the terms of the agreement.

At this, appearing for BHEL, Advocate Kartik Nayar, along with Mohit Mahla, Rishab Kumar and Sarthak Malhotra from KN Legal, submitted that BHEL had earlier filed four petitions under Section 9 of the Act before the Delhi High Court wherein it had categorically made submissions that the above-referred clause conferring exclusive jurisdiction in High Court of Allahabad cannot be given effect to since courts in Allahabad/Lucknow would otherwise have no jurisdiction over the dispute and therefore, the parties by their conduct also cannot confer jurisdiction in the said courts.

In three of those four petitions, UPRVUNL had remained ex-parte and only entered an appearance in one of the petitions. However, after entering an appearance, UPRVUNL chose not to file any reply, including taking any objection on the jurisdiction of the court.

At this, the court said, "Admittedly, no challenge was made to the petitions earlier filed by the petitioner before this Court. The said petitions have been disposed of granting relief in favour of the petitioner. No challenge has been made by the respondent to the said orders. Even in the present petitions, though opportunity was granted, reply was not filed by the respondent nd only oral submission on challenge of jurisdiction was made."

The court also referred to case titled AAA Landmark Pvt. Ltd. vs. AKME Projects Ltd. & Ors., wherein it had recently held that, "where the parties agree not to insist upon the exclusive jurisdiction Clause in an Agreement or raise such objection and by their conduct waive such condition/submit themselves to another Court's jurisdiction, it cannot be said that the Court other than the one in which exclusive jurisdiction has been vested, would be without jurisdiction. In any case, if the respondent is to raise any objection on the jurisdiction of the Court, it has to be so raised in the earlier petitions filed by the petitioner under Section 9 of the Act". 

Read the Order Here