CMRL-Gammon dispute: HC appoints 3-member arbitration panel

The Madras High Court has appointed a three-member arbitration committee, headed by former Law Commission Chairman and former Chief Justice of Madras and Delhi High Court, Justice A P Shah, to find a solution to the contractual disputes between Chennai Metro Rail Limited and Gammon India.
The committee will comprise two techno-legal members nominated by CMRL and Gammon as well, the first bench, comprising Chief Justice Sanjay Kishan Kaul and Justice M Sathyanarayanan, said.
While techno-legal consultant Kirti Dave of Mumbai will be Gammon's arbitrator, CMRL named P V Amarnadha Prasad of Hyderabad as its arbitrator.
The parties agreed to the court's suggestion to have Justice Shah to be presiding arbitrator.

Gammon had first moved the court against CMRL's threat to invoke its bank guarantees worth over Rs 171 crore and obtained an order in its favour.
The order forming arbitration committee was passed recently on appeals filed by CMRL against the September 8, 2015 order of a single judge.

Gammon-Mosmetrostroy had bagged CMRL contracts for design and construction of underground stations at Government Estate, LIC Building and Thousand Lights, Gemini, Teynampet, Chamiers Road, Saidapet and associated tunnels.
Though duration for completion of the project was originally fixed as 1,521 days from April 2, 2011, there were several delays and hindrances relating to handing over of work site, among others, and Gammon sought interim extension of time.

CMRL rejected the extension plea initially but did give an extension later on. When the contractors wanted further extension of deadline, CMRL decided to take up the delay with the dispute adjudication board.
Gammon's joint venture partner Mosmetrostroy unilaterally suspended their portion of work and abandoned the sites. CMRL responded by revoking the contract and took steps to invoke the bank guarantees, prompting Gammon to move the court.
The single judge had stopped CMRL from encashing the bank guarantees and suggested arbitrated settlement. The single judge permitted CMRL to encash the guarantees if Gammon failed to perform its contractual obligations and if its guarantees are not revived.

CMRL challenged the single judge's order.
However, during hearing, senior counsel for both sides took a "positive approach" and agreed that the controversy could be resolved through arbitration.