Facts of the Case

Utpal Datta had executed a contract dated 18.06.2014 with RailTel Corporation of India Limited (on behalf of BBNL) for excavation of trenches and laying of OFC cable across 40 blocks in Tripura and 4 blocks in Meghalaya, valued at ₹47,42,411, to be completed within 180 days. The work was completed on 27.10.2017 and a Provisional Acceptance Certificate issued. A revised Letter of Acceptance dated 03.02.2020 reduced the scope of work and sought to charge GST beyond what was covered by the original 2014 LOA, which the petitioner disputed, contending GST was not applicable to the agreement at all and that ₹4,60,847 had been illegally deducted from him on this basis; he also claimed his performance bank guarantee, EMD, and the final 5% retention amount remained unpaid. After an earlier writ petition (WP(C) No.204/2022) directed him to invoke the contract's arbitration clause (4.64), and correspondence over appointment of an arbitrator from RailTel's own panel did not resolve the dispute, the petitioner filed this application under Section 11(6) of the Arbitration and Conciliation Act, 1996, seeking court appointment of an arbitrator, on the ground that RailTel's proposed panel members (all former RailTel-linked officials) were ineligible under Section 12(5) read with the Seventh Schedule.

Issues Involved

  1. Whether the Tripura High Court had jurisdiction under Section 11(6) to appoint an arbitrator, given that Clause 4.64.1 of the agreement fixed the "venue" of arbitration as New Delhi.
  2. Whether the proposed arbitrators (retired officials linked to RailTel) were ineligible under Section 12(5) and the Seventh Schedule of the Arbitration and Conciliation Act, 1996.
  3. Whether a "no claim certificate" issued by the petitioner in 2020 barred his claims.

Petitioner's Arguments

  • Clause 4.64.1 used the word "venue," not "seat," for New Delhi, and did not exclude the jurisdiction of courts where the cause of action arose (Tripura); relying on Mankastu Impex and A.B.C. Laminart, this Court retained jurisdiction.
  • The proposed arbitrators, being former employees connected to RailTel, were ineligible under Section 12(5)/Seventh Schedule per Ellora Paper Mills.
  • The "no claim certificate" issued earlier did not bar a legitimate outstanding claim, per R.L. Kalathia.

Respondent's Arguments

  • Clause 4.64.1 designated New Delhi as the seat (not merely venue) of arbitration, per the Supreme Court's ruling in BGS SGS Soma JV v. NHPC, ousting the Tripura High Court's jurisdiction under Section 11(6).
  • The petitioner had already issued a "no claim certificate" settling all dues, and had not followed the agreed procedure for appointing an arbitrator.

Court Order / Findings

  • Applying BGS SGS Soma JV and Brahmani River Pellets, the Court held that the words "venue of such arbitration or proceeding thereof shall be New Delhi" in Clause 4.64.1 designated New Delhi as the juridical seat of arbitration (not merely a meeting venue), and that such a designation excludes the jurisdiction of all other courts, including Tripura's.
  • Having found it lacked jurisdiction on this threshold ground, the Court did not go on to decide the eligibility of the proposed arbitrators or the effect of the no-claim certificate, and dismissed the petition, leaving the petitioner free to approach the appropriate court (in Delhi).

Important Clarification

This is an arbitration-law ruling on seat-versus-venue jurisdiction, not a GST decision — the petitioner's underlying grievance about GST being wrongly charged on the reduced scope of work remains completely undecided and would need to be raised before an arbitrator (or the Delhi courts) instead.

Sections Involved

  • Arbitration and Conciliation Act, 1996 — Section 11(6) (appointment of arbitrator), Section 12(5) (arbitrator eligibility) read with the Seventh Schedule
  • Central Goods and Services Tax Act, 2017 — GST applicability to the contract, disputed by the petitioner but not examined by the Court

Decision – In Favour of

Respondent (RailTel Corporation of India Limited) — petition dismissed for want of jurisdiction; petitioner left to pursue remedies elsewhere.

Case Details

  • Court: High Court of Tripura, Agartala
  • Case: Arb. P. No.07 of 2023
  • Coram: Hon'ble The Chief Justice Mr. Aparesh Kumar Singh
  • Date: 13.10.2023

Link to Download the Order

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