New Delhi: The Supreme Court on Wednesday appointed a former apex court judge as an arbitrator to decide the dispute between Unitech Ltd and the Andhra Pradesh Industrial Infrastructure Corporation (APIIC) for development of an integrated Vizag city.
A bench comprising Justices D Y Chandrachud and M R Shah named former apex court judge Justice Subhash Reddy as an arbitrator.
The direction came on an application filed by Unitech Ltd seeking direction for refund of Rs 270 crore together with interest at 18 per cent annum by the APIIC.
The counsel for Unitech Ltd told the apex court that APIIC has proceeded on the basis that the development agreement was not ratified by board of directors and therefore not binding. APIIC counsel argued before the apex court that Unitech invoked arbitration so it would not be appropriate to issue direction in the from of decree.
“The submission by Unitech that this court should pass a decree for refund with interest cannot be enquired into in absence of adjudication of claim and the defence for the plea of refund…
“We are of the view that ends of justice would be met by appointing a sole arbitrator to arbitrate upon dispute. Accordingly we order and direct that Justice Subhash Reddy stands appointed as sole arbitrator to arbitrate upon dispute,” the bench said.
On August 1, 2007 bids were invited by APIIC in a public private partnership over 1,750 acres of land for setting up the Integrated Vizag Knowledge City project at Kapuluppada in Visakhapatnam.
On 21 September, 2007 letter of award was issued in favour of Unitech Ltd and on July 17, 2008 the development agreement was executed. However, the agreement was cancelled for non-implementation of the project. Aggrieved by this, Unitech invoked the arbitration clause on May 27, 2011 and after furnishing notices filed an application before the Andhra Pradesh high court under the arbitration act which is pending before it.