Delhi High Court
National Projects Construction … vs Bharat Scouts And Guides on 20 July, 2026
$~1
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision: 20.07.2026
+ ARB.P. 327/2025, I.A. 4149/2025 & I.A. 5700/2026
NATIONAL PROJECTS CONSTRUCTION CORPORATION
LIMITED .....Petitioner
Through: Mr. Paritosh Budhiraja and Ms.
Larika Khandelwal, Advs.
Versus
BHARAT SCOUTS AND GUIDES .....Respondent
Through: Ms. Tusha Chawla, Adv.
CORAM:
HON'BLE MR. JUSTICE AVNEESH JHINGAN
AVNEESH JHINGAN, J. (ORAL)
1. The present petition is filed under Section 11(6) of the
Arbitration and Conciliation Act, 1996 (for short „the Act‟) for the
appointment of an arbitrator.
2. The brief facts are that the parties to the lis entered into an
agreement dated 24.02.2015 (for short „the agreement‟) for
“Renovation and Modernization of NTC and NAI at Pachmarhi.” The
cost submitted by the petitioner was approved by the respondent on
30.09.2015. The petitioner issued a Notice Inviting Tender (NIT) and
Signature Not Verified
Signed By:CHANCHAL ARB.P. 327/2025 Page 1 of 6
Signing Date:21.07.2026
15:51:12
M/s Team Engineers (for short „contractor‟) was the successful bidder.
The project was completed and handed over to the respondent on
25.07.2018. The final bill was raised on 28.07.2018 but was not paid.
The respondent alleged substandard work and demanded a penalty of
Rs. 34,18,393/-.
2.1 The contractor filed a civil suit against the petitioner for
recovery of the unpaid bills in December, 2022. On 01.04.2024, the
petitioner approached the Ministry of Jal Shakti (for short „the
Ministry‟) for resolution of the disputes through the Administrative
Mechanism for Resolution of Central Public Enterprises Disputes
(AMRCD) in terms of Clause 7 of the Agreement.
2.2 The Ministry vide communication dated 20.05.2024, conveyed
the decision of the Department of Public Enterprises dated 17.05.2024
that the matter cannot be taken up for resolution under the AMRCD
mechanism. The petitioner was advised to explore the resolution of
the disputes through legal or other mechanisms. Hence, the present
petition.
3. Learned counsel for the petitioner contends that from Clause 7
of the agreement, it is evident that the intention of the parties was to
resolve the disputes through arbitration and that the intention is to be
seen.
4. Learned counsel for the respondent contends that there is no
arbitration clause in the agreement and Clause 7 of the agreement
Signature Not Verified
Signed By:CHANCHAL ARB.P. 327/2025 Page 2 of 6
Signing Date:21.07.2026
15:51:12
specifically mentions that the provisions of the Act shall not apply.
The prayer is for dismissal of the petition.
5. It would be relevant to quote Clause 7 of the agreement, which
reads as under:
“7.0 ARBITRATION OF DISPUTE
7.1 In the event of any dispute or difference
relating to the interpretation and application of the
provisions of the contracts, such disputes or difference
shall be referred by either party (OWNER &
AGENCY) for arbitration to the Sole Arbitrator in the
department of Public Enterprises to be nominated by
the Secretary to the Govt, of India in-charge of the
department of Public .Enterprises. The Arbitration and
Conciliation Act 1996 shall not be applicable to
arbitration under this clause. The award of the
arbitrator shall be binding upon the parties to the
dispute, provided, however, any party aggrieved by
such award made a further reference for setting aside
or revision of the award to the law secretary, Deptt of
Legal Affairs, Ministry of Law and Justice, Govt, of
India, Upon such reference the dispute shall be decided
by the law Secretary or the special
Secretary/Additional Secretary, when so authorized by
the Law Secretary, whose decision shall bind the
parties conclusively. The parties to the dispute will
share equally the cost of arbitration as intimated by the
arbitrator.
7.2 In the event of any dispute or difference
relating to the interpretation and application of the
provisions of the contracts between NPCC and its
appointed contractors/vendors, such disputes orSignature Not Verified
Signed By:CHANCHAL ARB.P. 327/2025 Page 3 of 6
Signing Date:21.07.2026
15:51:12
difference shall be dealt as per contract conditions
between them and expenditure on arbitration/court case
shall be made by NPCC and shall be reimbursed by
BSG including award/decree. The cost of favorable
award/decree shall be property of the owner (BSG).”
6. The heading of Clause 7 of the agreement is „Arbitration of
Dispute‟ and the word „arbitration‟ has been used in the Clause. At
first glance, it appears to be a clause for arbitration but in fact the
clause provides a mechanism agreed between the parties for dispute
resolution and the statutory provisions of the Act were ousted. Under
the Clause, the Secretary to the Government of India in charge of the
Department of Public Enterprises had to nominate an official to act as
an arbitrator. In the eventuality of a party being aggrieved by the
award, the remedy was provided before the Law Secretary or Special
Secretary/Additional Secretary (authorised by the Law Secretary) and
the decision was binding on the parties.
7. The parties as per the unambiguous language of Clause 7 of the
agreement agreed that the Act shall not apply to the dispute resolution
mechanism provided under Clause 7 of the agreement.
8. It is trite law that the words used in an arbitration agreement
must disclose the determination and obligation of the parties to refer
their disputes to arbitration. In the absence of an arbitration agreement
the jurisdiction of the High Court under Section 11(6) of the Act
cannot be invoked. Reference in this regard be made to the decision of
the Supreme Court in Mahanadi Coalfields Ltd. v. IVRCL AMR
Signature Not Verified
Signed By:CHANCHAL ARB.P. 327/2025 Page 4 of 6
Signing Date:21.07.2026
15:51:12
Joint Venture, (2022) 20 SCC 636:
“9. In the present case, Clause 15 of the contract
agreement is titled “Settlement of
Disputes/Arbitration”. However, the substantive part of
the provision makes it abundantly clear that there is no
arbitration agreement between the parties agreeing to
refer either present or future disputes to arbitration.
*** *** ***
18. For the above reasons, we have come to the
conclusion that the invocation of the jurisdiction of the
High Court under Section 11(6) of the 1996 Act was
not valid and there being no arbitration agreement
between the appellants and the respondent, no
reference to arbitration could have been made. We
accordingly allow the appeal and set aside the
impugned judgment and order of the High Court dated
29-11-2019. The respondent would, however, be at
liberty to seek recourse to the remedy available in law
to pursue the redressal of its grievances.
(Emphasis supplied)
9. The contention of learned counsel for the petitioner that the
intention of the parties was to resolve the dispute through arbitration is
ill-founded. The parties devised an alternative dispute resolution
mechanism independent of the Act and the applicability of the
provisions of the Act was agreed to be ousted. The remedy under
Section 11(6) of the Act is not available to the petitioner aggrieved of
refusal of the Ministry to refer the matter for dispute resolution under
AMRCD.
10. The petition is dismissed as not maintainable. Needless to say
Signature Not Verified
Signed By:CHANCHAL ARB.P. 327/2025 Page 5 of 6
Signing Date:21.07.2026
15:51:12
the petitioner shall be at liberty to avail remedy in accordance with
law.
AVNEESH JHINGAN, J
JULY 20, 2026/Pa
Reportable:- Yes
Signature Not Verified
Signed By:CHANCHAL ARB.P. 327/2025 Page 6 of 6
Signing Date:21.07.2026
15:51:12
