ALTERNATE DISPUTE RESOLUTION (BAL 976)

ARBITRATION PROPOSITION

1. Star Builders is an organisation mainly involved in the business of real estate construction
and development. The business was established by Mr. Lokesh Agarwal, who is well-
known in the sector and highly respected. They have completed nearly 300+ projects
successfully ranging from Residential Apartments to Schools to Commercial Complexes.
2. Mr. Rama Rao is the heir to a family owned pharmaceutical company, Moon Pharma. He
inherited 50 Acres of land situated in Hosur Road, Bangalore from his deceased
grandfather. Due to his philanthropic nature, he decided to construct a school in the
memory of his grandfather in the said land. For this purpose, he entered into an
Agreement with Star Builders (hereinafter referred to as “Contractor”) on 14.03.2019.
Clause 11 of the Agreement stipulated that the Contractor will complete the construction
of the school within a period of 12 months from the date of commencement of the
Agreement i.e., 14.03.2019.
3. Clause 3 of the Agreement provides for the obligations of Mr. Rama Rao, which includes
handing-over the land for construction of schools within 15 days from the date of
commencement of the Agreement. However, Mr. Rama Rao only handed over the land
after 30 days. Further, Mr. Rama Rao also failed to perform the obligation of making
available the drawing/decisions for execution of work on time and release running
accounts payments on time.
4. Clause 4 of the Agreement lists out the obligations of the Contractor, which includes the
obligation to show timely progress of work every 3 months. In order to discharge this
duty, the Contractor had to employ 70 construction workers daily. However, in order to
save cost, he only employed 50 construction workers.
5. In the year 2020, the whole world faced an unprecedented pandemic of COVID-19 due to
which a nation-wide lockdown was imposed by the Central Government. The
construction sector was among the most affected sectors since most construction workers
were labourers from various parts of the country and thus, were part of the migrant crisis
that followed.
6. Due to delay in completing the construction of the school by 14.04.2020, Mr. Rama Rao
terminated the Agreement on 16.06.2020 via Clause 20, which provided for termination
at the option of either party due to breach of any terms of the Agreement. The Contractor
 argues that there was no breach of any terms of the Agreement inasmuch as delay was
caused due to “Force Majeure” as provided for under Clause 19 of the Agreement.
7. As per Clause 21 of the Agreement, both parties have consented to arbitration as means
for dispute resolution. Star Builders issued notice to Mr Rao for cancellation of
Agreement and appoint arbitrator as per Clause 21 of the Agreement. Mr Rao appointed
the Zonal Manager of his company as the sole arbitrator, to which the Star Builders filed
an application under Section 11 of The Arbitration and Conciliation Act ,1996 raising
objections citing reasons mentioned in the Schedule V of the said Act.
8. The Hon’ble High Court allowed the application and appointed Mr. Rammone (Senior
Advocate) as the sole arbitrator to resolve the matter and set the date for the
commencement of proceedings as 20-09-2020.

Team –

9 BA LLB B
Keshav Kumar S – 1650214
Naik Siddhartha – 1650218
Athira Soman – 1650242
Sakhee Mehta - 1650249
Sakshi A - 1650261