Bombay high court appoints sole arbitrator, says replacement of tender arbitration clause not shown clearly at section 11 stage

Bombay High Court Appoints Sole Arbitrator: Clarifies Tender Arbitration Clause Replacement at Section 11 Stage.

Case Name: Jayant Infratech Ltd. v. RCCPL Pvt. Ltd.

Case No: Commercial Arbitration Application No. 397 of 2026, decided on 5 October 2026

Coram: Justice Amit Borkar

Citation: (2026) ibclaw.in 6043 HC

The Bombay High Court has allowed an application under Section 11 of the Arbitration and Conciliation Act, 1996 and appointed a sole arbitrator, holding that the respondent had not shown with sufficient clarity that the Mumbai arbitration clause in the tender document was replaced by a later clause providing for arbitration at Kolkata. The objections on supersession and jurisdiction were left open for the arbitrator.

The dispute arose from a contract for supply, installation, testing and commissioning of OHE and PSI works at the respondent's Mukutban siding in the Wani-Pimpalkhuti Section of Nagpur Division under Central Railway. The applicant relied on the arbitration clause in the General Conditions of Contract forming part of the tender, which provided that arbitration proceedings would be held in Mumbai. The Energisation Certificate was issued on 8 April 2024 and the Defects Liability Period expired on 10 April 2025, after which the retention amount of Rs. 55,98,780 became payable. After a Notice of Dispute dated 21 November 2025 and a notice invoking arbitration dated 8 January 2026, the respondent replied on 16 February 2026 that it did not consent to any unilateral appointment. The applicant then approached the Court.

The applicant argued that the respondent itself admitted an arbitration agreement and that all other questions, including supersession, delay and liquidated damages, were for the arbitral tribunal. The respondent contended that the tender ceased to operate once the project was awarded. It relied on the Letter of Intent dated 2 May 2023 and the later Purchase Orders and Work Order along with General Terms and Conditions. Clause 20 of those terms provided for arbitration at Kolkata and Clause 21 gave exclusive jurisdiction to the Courts at Kolkata. It also alleged suppression of these terms by the applicant and relied on Duro Felguera, S.A. v. Gangavaram Port Limited, Indus Mobile Distribution Private Limited v. Datawind Innovations Private Limited and Ravi Ranjan Developers Private Limited v. Aditya Kumar Chatterjee.

The Court first held that it was difficult to accept that there was no arbitration agreement at all. Clause 18.7 of the tender document referred disputes to arbitration if negotiation failed and stated that the arbitration proceedings shall be held in Mumbai. The real question was whether the later terms were accepted by both sides and whether they replaced the earlier clause.

The Court noted that the Purchase Order dated 2 May 2023 bears the applicant's acceptance and records the general terms as mutually agreed. It also states that a detailed order or contract with applicable terms would be released in due course. It does not state that Clause 18.7 was cancelled or superseded, or that Mumbai was replaced by Kolkata. The Court further observed that the applicant, while seeking release of the retention amount, continued to rely on the tender document for the Defects Liability Period, and the work was actually performed. The conduct of the parties showed that the contractual arrangement continued, though the exact governing terms were disputed.

The allegation of deliberate suppression was not accepted, as the respondent had itself produced the later terms and the Court had considered them.

On the precedents, the Court observed that Duro Felguera was decided when Section 11(6A) was part of the statute, which was later omitted by the 2019 amendment, and paragraph 13 therefore could not be treated as the complete statement of law. It accepted the principle in Indus Mobile that designation of a seat is akin to an exclusive jurisdiction clause, but noted that this applies only after the Court finds which seat was agreed. Referring to Ravi Ranjan Developers, it noted that words in a judgment cannot be read out of context and that the Court must look at the intention of parties from the agreement as a whole.

The Court also did not accept the applicant's submission in an absolute form that the words "held at Kolkata" can never mean the seat merely because the word venue is not used. If the later clauses were ultimately found to be the final agreed terms, Clause 20(c) and Clause 21 together may show that Kolkata was intended as the legal seat. However, the existence of those clauses and their incorporation into the contract are two different things, and there was no sufficiently clear material at this stage to hold that the applicant gave up the Mumbai seat and accepted Kolkata.

The Court therefore appointed Mr. Jash Gandhi, Advocate, as the sole arbitrator to adjudicate the disputes, including claims and counter claims, with arbitral costs and fees to be borne equally in the first instance. The respondent was permitted to raise before the arbitrator its objections on supersession of the tender terms, the later General Terms and Conditions, delay, liquidated damages, retention and other monetary claims. All issues on merits were kept open.