M/S. NATIONAL HIGHWAYS AND INFRASTRUCTURE DEVELOPMENT CORPORATION LTD. versus M/S. BSCPL INFRASTRUCTURE LTD.

M/S. NATIONAL HIGHWAYS AND INFRASTRUCTURE DEVELOPMENT CORPORATION LTD. versus M/S. BSCPL INFRASTRUCTURE LTD.

The LOA is not a concluded contract but part of the bidding process; until the concession agreement is executed, only the Courts of Delhi have jurisdiction over disputes per clause 6.1 of the RFP. The arbitration clause contained in the draft agreement does not apply at the LOA stage. Therefore, disputes arising at the LOA stage must be resolved by courts and not by arbitration.

Parties
Appellant: M/s. National Highways and Infrastructure Development Corporation Ltd.; Respondent: M/s. BSCPL Infrastructure Ltd.
Jurisdiction
India
Judgment Date
07 August 2019
Procedural Posture
Civil Appeal / Supreme Court Appellate Decision
Outcome
Appeal allowed; impugned judgment set aside.
Legal Topics
Arbitration Clause, Letter of Award (loa), Contract Formation, Dispute Resolution Forum, Bidding Process
Arbitration Contract Law Jurisdiction Arbitration Clause Letter of Award (loa) Contract Formation Dispute Resolution Forum Bidding Process

Case Brief

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Parties

M/s. National Highways and Infrastructure Development Corporation Ltd.

Appellant

M/s. BSCPL Infrastructure Ltd.

Respondent

Procedural Posture

Civil Appeal / Supreme Court Appellate Decision

Legal Issues

  1. 1 Whether an arbitration clause becomes operative at the stage of LOA acceptance or only upon execution of the final agreement
  2. 2 Whether the LOA constitutes a binding contract between the parties
  3. 3 Whether disputes at the LOA stage are subject to arbitration or court jurisdiction

Ratio Decidendi

The LOA is not a concluded contract but part of the bidding process; until the concession agreement is executed, only the Courts of Delhi have jurisdiction over disputes per clause 6.1 of the RFP. The arbitration clause contained in the draft agreement does not apply at the LOA stage. Therefore, disputes arising at the LOA stage must be resolved by courts and not by arbitration.

Court Disposition

Appeal allowed; impugned judgment set aside.

Orders

  • The judgment of the Delhi High Court dated 26.10.2018 is set aside.
  • The Civil Appeal is allowed.