Insights
SC strikes down arbitration clause for being arbitrary and violative of Article 14
March 1, 2019Brief Facts
In 2008, the Punjab State Water Supply & Sewerage Board, Bhatinda (Respondent No. 1) issued a notice inviting tender for extension and augmentation of water supply, sewerage scheme, pumping station and sewerage treatment plan for various towns on a turnkey basis. The tender was awarded to M/s ICOMM Tele Ltd. (Appellant), pursuant to which a formal contract was executed between the Appellant and Respondent No. 2. Notice inviting tender formed a part of the formal contract and contained an arbitration clause i.e., Clause 25(viii) which inter alia provided that 10% of the amount claimed would be deposited by the party invoking arbitration as a pre-requisite for invocation of such arbitration.
