DEEPAK KUMAR BANSAL versus UNION OF INDIA & ANR.

DEEPAK KUMAR BANSAL versus UNION OF INDIA & ANR.

The High Court erred by not accounting the supplementary work orders along with the original work order in determining the value of the claim. Even assuming the claim exceeded 20% of the value, the 2003 Circular limiting arbitration to such claims did not apply to contracts executed prior to its issuance absent specific incorporation. Accordingly, the dispute was referable to arbitration under the contract.

Parties
Appellant: Deepak Kumar Bansal; Respondent: Union of India & Anr.
Jurisdiction
India
Judgment Date
17 February 2009
Procedural Posture
Civil Appeal / Appeal From Order on Application Under Section 11(6) of Arbitration and Conciliation Act, 1996
Outcome
Appeal partly allowed; impugned order set aside; application under Section 11(6) allowed.
Legal Topics
Appointment of Arbitrator, Applicability of Contractual Circulars, Scope of Arbitration Clause, Limitation on Arbitration Claims
Arbitration Appointment of Arbitrator Applicability of Contractual Circulars Scope of Arbitration Clause Limitation on Arbitration Claims

Case Brief

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Parties

Deepak Kumar Bansal

Appellant

Union of India & Anr.

Respondent

Procedural Posture

Civil Appeal / Appeal From Order on Application Under Section 11(6) of Arbitration and Conciliation Act, 1996

Legal Issues

  1. 1 Whether the High Court erred in holding that the value of the claim exceeded 20% of the value of the contract for purposes of arbitration.
  2. 2 Whether the 2003 Circular limiting arbitration claims to less than 20% of the contract value was applicable to the contract entered into in 1996.

Ratio Decidendi

The High Court erred by not accounting the supplementary work orders along with the original work order in determining the value of the claim. Even assuming the claim exceeded 20% of the value, the 2003 Circular limiting arbitration to such claims did not apply to contracts executed prior to its issuance absent specific incorporation. Accordingly, the dispute was referable to arbitration under the contract.

Court Disposition

Appeal partly allowed; impugned order set aside; application under Section 11(6) allowed.

Orders

  • The application under Section 11(6) of the Arbitration and Conciliation Act, 1996 stands allowed.
  • The matter to be placed before the concerned Judge of the High Court for appointment of an arbitrator in compliance with Clause 64 of the contract.