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Rama mohan Acharya (Manager HR(Legal))     04 October 2013

Validity of arbitration proceeding

A contract was awarded to a contractor for construction of a building. An agreement was also executed in which the arbitration clause is also there. As per the contract condition,The contractor was supposed to submit its final bill along with a no claim certificate at the closure of the contract. The contractor failed to execute the job within stipulated period of time and time extension was granted twice. When the contractor request for time extension for third time it was refused and communicated to the contractor. Levying of liquidate damage was proposed on the contractor. The Contractor approached the competent authority for arbitration by submitting a claim. The authority had also appointed a sole arbitrator. My querry is whether a contractor has the right to invoke the arbitraion at this moment when he has not submitted his final bill? The contractor has not challenged the refusal of time extension in his claim. My understanding is once the contractor submits his final bill along with the certificate, the employer may pay some amount which is acceptable as per the terms of contract. There after, for the remaining amount, the contractor may invoke arbitration. Is it not a premature case since the exact amount of dispute is not determined. Can the Arbitrator close the proceeding under section 32(2)(c) of Arbitration &Conciliation Act 1996?


 1 Replies

binay (advocate)     04 October 2013

if the transaction is closed without terminating the contract, hence it seems that the contract is full on & as a part of contract the contractor can invoke the arbitration clause if present in the contact.

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