Madras HC asks Gammon and Chennai Metro Rail to choose arbitrators

The Madras High Court today asked Gammon India and Chennai Metro Rail Ltd (CMRL) to suggest names of experts who could be appointed as arbitrator to hear the dispute between the two parties. The development comes on a petition filed by Gammon India seeking a stay on the termination of its contract by Chennai Metro Rail Ltd.

During today's hearing Justice S Vimala asked both the sides to come out with the names. While initially Gammon India had suggested retired Judge Deepak Verma's name, later it withdrew the name due to technical issues as per the agreement, which laid down certain conditions, for the person who will be nominated for arbitration.

While Gammon said that it is not able to find a person as per the norms in the agreement CMRL has said it can suggest names.

Hearing both the sides, the Court asked them to choose two names from the list, which will be given by CMRL, that are mutually agreed. The two people who were choosen in turn will select one member for arbitration. The Court has posted the matter for the hearing to Friday.

Earlier the Court asked both the parties to resolve the issue amicably, on which CMRL informed that the discussions for amicable settlement did not work.

It may be noted, early this month CMRL decided to terminate the Order placed to Gammon due to delay in completion of the tunnelling project after Gammon's joint venture partner Mosmetrostroy, a Russian Company, allegedly abandoned the project. Gammon bagged Rs 1,947-crore contract along with Mosmetrostroy in 2011 to design and construct seven underground stations for the CMRL.

During today's hearing, Senior Counsel P S Raman, who was appearing for the company, argued that the company is ready to bring an Italian company, to replace Mosmetrostroy, which has best of technology and even ready to give undertaking that it will finish the remaining project in a particular time frame, but CMRL is not accepting it.

The counsel for CMRL earlier stated that once the termination notice was issued it cannot be revoked, he also argued that as per the agreement Gammon cannot outsource the project (on the backdrop of his Russian partner running away).

The CMRL has also decided to involve the bank guarantee against Gammon post the termination of the contract. However, Gammon wanted this to be stayed.