M/S MSP INFRASTRUCTURE LTD. VERSUS M.P. ROAD DEVL. CORP. LTD

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL No.10778 OF 2014

[Arising out of SLP (Civil) No. 16539 of 2010]

M/S MSP INFRASTRUCTURE LTD. .. APPELLANT(S)

VERSUS

M.P. ROAD DEVL. CORP. LTD. .. RESPONDENT(S)

The question that has arisen in this appeal is whether a party to an arbitration proceeding may be permitted to raise objections under Section 34 of the Arbitration and Conciliation Act, 1996 (for short “the Arbitration Act, 1996”), with regard to the jurisdiction of the Arbitral Tribunal (for short “the Tribunal”) after the stage of submission of the written statement. M/s M.S.P. Infrastructure (Appellant) and the M.P.Road Development Corporation (Respondent) entered into a contract on 04-04-2002 for the development and upgradation of the Raisen-Rahatgarh road (a stretch of about 100 Kms.) in the State of Madhya Pradesh. Upon a dispute arising between the parties in respect of the work carried out by the Appellant, the Respondent Corporation terminated the said contract and encashed the bank-guarantee. Thereafter, the Appellant filed a Civil-Suit being C.S. No. 63 of 2003 before the Calcutta High Court challenging the termination of the Agreement as well as the encashment. The Calcutta High Court disposed of the suit on 22-05-2003 by recording “Terms of Settlement” between the parties, whereby it was decreed that the dispute would be referred to arbitration in terms of the contract dated 04-04-2002 within a period of 30 days, under the provisions of the Arbitration Act, 1996.The Tribunal made an award on 27-11-2006. By the said award, the Tribunal partly allowed the claims of the Appellant and accordingly awarded a sum of approximately Rs.6.90 crores as well as the release of Fixed Deposit Receipts which had been deposited as security with the Respondent. Aggrieved by the award dated 27-11-2006, the Respondent filed a petition on 09-01-2007 for setting aside the award under Section 34 of the Arbitration Act, 1996. The Respondent assailed the award as being in contravention of clause (b) of sub-section (2) of Section 34 of the Arbitration Act, 1996. Subsequently, on 28-02-2009 the Respondent moved an application to amend the original petition under Section 34 to add additional grounds of objection. The Additional District & Sessions Judge, Bhopal (Madhya Pradesh) vide order dated 26-08-2009 rejected the said amendment application. The learned Additional District &Sessions Judge observed that it was absolutely unjust and unfair to file such objections after two years of the filing of the petition under Section 34 of the Arbitration Act, 1996. Aggrieved, the Respondent preferred a Petition under Article 227 before the High Court of Madhya Pradesh at Jabalpur. The Madhya Pradesh High Court without going into the tenability of the amendment application at the stage at which it was moved, i.e., beyond the time permitted by Section 16 of the Arbitration Act, 1996, simply allowed the amendment by observing that they are not deciding the merits of the case and that they were simply considering the amendment application….read more