SC Appoints Justice Khalifulla As Sole Arbitrator in Dispute Between US, Turkey Firms [Read Order]

A two-judge bench of the Supreme Court on Wednesday appointed Justice FM Ibrahim Kalifulla, former judge of the Supreme Court, to act as a sole arbitrator in a dispute between Mears Group INC and Fernas Insaat AS (Fernas Construction Company INC).

Mears Group INC is a company incorporated in the US, and Fernas Insaat AS (Fernas Construction Company INC) is incorporated in Turkey.

Fernas Insaat was awarded a contract for the construction of a pipeline by Gas Transmission Company Ltd, Bangladesh.

A Letter of Intent was issued by it to the petitioner on 16 April, 2012, for performing horizontal directional drilling works for six river crossings under the above-mentioned project in Bangladesh. A detailed work order was issued on 12 June, 2012, to the petitioner for a total contract price of $7,225,000. The petitioner is stated to have furnished a performance bank guarantee equivalent to 10 per cent of the contract price.

Disputes have arisen between the parties, resulting in an exchange of e-mails. The petitioner has a claim for unpaid dues. The petitioner invoked arbitration by an e-mail dated 2 November, 2015, addressed by its advocate to the respondent and claimed $38,13,723.76 together with interest and suggested the names of two former judges of the Delhi High Court.

It sought the concurrence of the respondent to the appointment of one of them as sole arbitrator, in terms of the arbitration agreement. Finding no response, these proceedings were instituted under Section 11(5) of the Arbitration and Conciliation Act, 1996.

The bench comprising Chief Justice Thakur and Justice D.Y. Chandrachud observed that disputes had evidently arisen between the parties and a mutual settlement was not possible and appointed Justice Kalifulla as the sole arbitrator.

Read the Order here.

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