CMP/169/2026 of M/S KMV PROJECTS LIMITED Vs KARNATAKA HOUSING BOARD on 5 October 2026

ORAL ORDER

1. This petition is filed under Section 11(5) or 11(6) of the Arbitration and Conciliation Act, 1996 (for short, “the Act”), seeking appointment of a sole Arbitrator for adjudication of the disputes that have arisen between the parties under the Construction Agreement dated 31.03.2017, particularly in terms of Clause 4 of Special Conditions of Contract thereof, produced at Annexures – D and E, respectively.

2. The brief facts of the case are that the petitioner, a construction company engaged in infrastructure development, was awarded the contract by the respondent for construction of Mini Vidhana Soudha at Chittapura

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Taluk, Kalaburgi District pursuant to a tender process initiated in September 2016. Following issuance of the Letter of Acceptance on 28.02.2017 and execution of the agreement in March 2017, the petitioner commenced the work. During execution of the work, the petitioner faced impediments including delay in handing over the site, revisions in the scope and quantities of work and delay in release of payments, which resulted in extension of time being granted up to 20.10.2019. The work was completed by the said date to the satisfaction of the respondent, without any defect notification. However, despite completion of the work and expiry of the defect liability period, the respondent failed to release the amounts claimed towards RA bills, final bills, price adjustment, escalation, additional quantities, GST and other contractual entitlements, and possession of the completed project was taken only on 18.01.2025. The petitioner claims that, owing to the respondent's defaults, it suffered financial losses and raised a claim of Rs.8,37,70,608/-

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with interest at 18% per annum. Subsequently, disputes arose between the parties in relation to the said Construction Agreement.

3. As the disputes arose between the parties, the petitioner, invoking the arbitration clause contained in the Construction Agreement, issued a notice dated 10.02.2026 along with Corrigendum dated 25.03.2026, vide Annexures-F and G, respectively, to the respondent under Section 21 of the Act. The same were duly served on the respondent. The said arbitration Clause

Special Conditions of Contract reads as under: “4. Arbitration (Clause 24) 4.1 The procedure for arbitration shall be as follows:

(a) In case of dispute or difference arising between the Employer and the Contractor relating to any matter arising out of or connected with this agreement it shall be settled in accordance with the Arbitration and Conciliation Act 1996. The disputes or differences shall be referred to a Sole Arbitrator. The Sole Arbitrator shall be appointed by agreement between the parties; failing such agreement, by the

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Appointing Authority (any one of the Organizations as per list enclosed in Annexure)

(b) Arbitration proceedings shall be held at Bangalore, Karnataka, India

(c) The cost and expenses of arbitration proceedings will be paid as determined by the Arbitrator. However the expenses incurred by each party in connection with the preparation, presentation, etc., shall be borne by each party itself.

(d) Performance under the contract shall continue during the arbitration proceedings and payments due the Contractor by the Employer shall not be withheld, unless they are the subject matter of the arbitration proceedings.”

4. Despite service of the said notice, the respondent did not furnish any response. Hence, the present petition is filed seeking appointment of a sole Arbitrator.

5. The learned counsel for the respondent submits that respondent has no objection for appointment of sole Arbitrator and all the contentions of the parties may be left open.

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6. Having regard to the existence of the arbitration clause contained in the Construction Agreement, which provides for resolution of disputes arising between the parties, and the fact that the petitioner has duly invoked the said arbitration clause by issuing notice under Section 21 of the Act, this Court is of the opinion that a Sole Arbitrator is required to be appointed for adjudication of the disputes between the parties.

7. Accordingly, the following:

ORDER

a) Civil Miscellaneous Petition is allowed.

b) Hon’ble Shri Justice A.N.Venugopala Gowda, Former Judge of High Court of Karnataka, is appointed as the Sole Arbitrator in the present case to arbitrate the disputes between the parties at the Arbitration and Conciliation Centre (Domestic & International), Bengaluru, as per the Rules governing the said Arbitration Centre.

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c) All the claims and contentions of the parties are left open.

d) Registry is directed to communicate this order via e-mail to the Arbitration and Conciliation Centre (Domestic & International), Khanija Bhavan, Bengaluru, and also to Hon’ble Shri Justice A.N.Venugopala Gowda, Former Judge of High Court of Karnataka.

e) Registry is directed to return all the original documents produced by any of the parties after obtaining Photostat copies of the same.

f) Parties are directed to appear before the Director, Arbitration and Conciliation Centre, Bengaluru, on 04.11.2026 at 11:30 a.m.

(H.T. NARENDRA PRASAD) JUDGE

HA LIST NO.: 1 SL NO.: 19