Reply of claimant to counter claim filed by respondent before the sole arbitrator
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BEFORE THE SOLE ARBITRATOR Arbitrator's name; GURGAON, HARYANA
Arbitration Case No. Arbitration case number OF 2016.
In the matter of arbitration between:
Claimant's nameCLAIMANT
VERSUS
Respondent's nameRESPONDENT
REPLY ON BEHALF OF THE CLAIMANT TO THE COUNTER CLAIM FILED BY THE RESPONDENT
MOST RESPECTFULLY SHOWETH: -
PRELIMINARY OBJECTIONS:-
1.That the allegations, submissions and contentions raised in the counter claim filed by the respondent are untenable, false and bogus, and are accordingly denied. No sums are due and owing to the respondent, whether as claimed or otherwise. The respondent is obfuscating the issues in a mischievous attempt to evade its liabilities.
REPLY TO PRELIMINARY SUBMISSIONS
1-2. That the contents of paragraphs 1 to 2 of the preliminary submissions are wrong and denied. It is denied that the claim filed by the claimant is totally false, baseless and vague, or that it is founded upon fake and forged bills, or upon bills pertaining to work which was never assigned to the claimant by the respondent.
3.That the contents of paragraph 3 of the preliminary submissions are wrong and denied. It is denied that the claimant has filed three separate claims against three different sister concerns of the respondent company, or that it has intermingled the bills of work of these companies in these claims, thereby rendering the claims suspicious. It is submitted that the claimant's claim pertains solely to M/s Claimant's company name (M/s) and is not intermingled with any other concern of the Respondent group name group, although the claimant is in a legal dispute regarding receivable payments with other companies of M/s Respondent group name (M/s).
4.That the contents of paragraph 4 of the preliminary submissions are wrong and denied. It is denied that the claimant's claim is based entirely on irrelevant and baseless invoices which prove the falsity of the claim and the claimant's mala fide intention to mislead the Tribunal, or that the claim is liable to be dismissed on that account. Invoice No. First invoice number is a legitimate and explainable invoice, a copy whereof, duly verified by the resident project manager of Respondent company name Limited, namely Resident project manager's name, is enclosed herewith. It is further pointed out that the purchase order number mentioned in the said invoice, namely Purchase order number in invoice, is in accordance with the purchase order. Further, the claimant has also received the 'Statutory form type ('C' Form)' Form bearing No. Statutory form number dated Date of statutory form against the said invoice, which clarifies the acceptance of the invoice by Respondent company name. Similarly, Invoice No. Second invoice number, which is denied by the respondent, is legitimate in all respects. The copy of the purchase order vide Reference No. Purchase order reference number dated Date of purchase order pertaining to the said invoice, and referred to therein, is enclosed for the reference of the respondent. It is submitted that Invoices Invoice numbers referred to are legitimate and in accordance with the issued purchase order. There was a discrepancy in the noting of the purchase order number in the said invoice, but it was purely a typographical error, and there was no discrepancy in relation to statutory particulars such as the party name, values or taxes. The material was dispatched and duly received at site, and, in binding upon the respondent, Respondent company name also issued the 'C' Form bearing No. 'C' Form number dated Date of 'C' Form. The invoices are, therefore, legitimate.
REPLY ON MERITS:-
1.That the contents of paragraph 1 of the counter claim are reiterated and hence denied. It is submitted that the present counter claim has not been signed and filed by a competent person of the respondent company.
i).That the contents of paragraph 1, sub-paragraph (i), of the counter claim are absolutely wrong and incorrect, and are reiterated and hence specifically denied. It is denied that, although the respondent obtained the services of the claimant vide various purchase/work orders, the claimant's work and services were poor from the very inception, sub-standard and not in conformity with the established standards of the industry. It is further denied that the material supplied by the claimant was below standard and not in conformity with the purchase order issued to the claimant. It is also denied that, as per the purchase order, the claimant was required to supply structural steel of the Agreed steel brand names brands but failed to adhere thereto and instead supplied material of local/other unspecified brands. It is further denied that the claimant's claim is based upon unverified bills or quantities of material supplied, or that, though it was mandatory for the claimant to get the bills of material and services verified from the project manager of the respondent, the claimant failed to comply with the said requirement. It is further denied that the issue of supply of local/other unspecified brand material was raised by the respondent, or that, after much persuasion, the claimant admitted the supply of material of a different brand than agreed in the purchase order and further agreed to issue a credit note @ ₹Credit note rate per kg (₹) per kg but never credited the said amount to the respondent. It is further denied that the respondent is entitled to recover an amount of ₹Amount claimed for wrong brand material (₹)/- on this account. It is admitted that the claimant accepted the credit note of ₹Amount of accepted credit note (₹)/-.
ii).That the contents of paragraph 1, sub-paragraph (ii), of the counter claim are absolutely wrong and incorrect, and are reiterated and hence specifically denied. It is denied that, as per the 'inspection' clause of the purchase order, the claimant was bound to have the material inspected by the authorised representative of the respondent before dispatch, but failed to adhere thereto and supplied the material without affording the respondent any opportunity to inspect the same. It is further denied that the said inspection was never waived by the respondent, or that the claimant thereby supplied uninspected, sub-standard material which had a huge bearing on the project, causing the respondent financial loss and damage to its reputation. The statement is totally baseless. Had the case been one of no inspection, there would have been an outright rejection of the first consignment upon its arrival at site. There were always verbal inspection discussions with the concerned officials of Respondent company name, and, owing to the urgency of project execution, the claimant was always asked to dispatch the material to site. At no stage, either after receipt of the material at site or in any communication whatsoever, was any concern regarding inspection ever raised.
iii).That the contents of paragraph 1, sub-paragraph (iii), of the counter claim are absolutely wrong and incorrect, and are reiterated and hence specifically denied. It is denied that the claimant failed to supply material in exact conformity with the bills raised by him, that is, that the material supplied was short as described/detailed in his invoices. It is further denied that the claimant is liable to refund an amount equivalent to the value of the short quantity, which comes to ₹Amount claimed for short supply (₹)/-. The representation made in relation to the difference in weights is totally false and baseless. The alleged shortage in material supply was never brought to the notice of any personnel of the respondent, whether by e-mail or even to the site in-charge of the claimant. The weighment slips now annexed by Respondent company name are their internal property and were never shared with, or communicated to, the claimant in the past.
iv).That the contents of paragraph 1, sub-paragraph (iv), of the counter claim are absolutely wrong and incorrect, and are reiterated and hence specifically denied. It is denied that, as per the terms and conditions of the purchase order, the claimant was required to supply the complete material within two months of the date of the purchase order but failed to supply the same within the stipulated time frame, and that whatever material was supplied was unverified, uninspected and short. It is further denied that the claimant totally failed to supply the material in accordance with the purchase order, which, on the one hand, delayed the respondent's project and, on the other, affected the quality, strength and durability of the structures of the project. It is also denied that, as per Clause 12 of the purchase order, the respondent is entitled to recover liquidated damages from the claimant to the tune of ₹Liquidated damages amount (₹)/-. The plea raised by Respondent company name (Infra) is totally frivolous. Whatever delay occurred in the execution of the project was always on account of the non-payments and irregularities of Respondent company name, and the same was communicated to them through various e-mails, which have been annexed to the claimant's claim.
v)That the contents of para 1 of sub-para (v) of the counter claim are absolutely wrong, incorrect and are reiterated, and are therefore specifically denied. It is denied that the Respondent asked the Claimant on several occasions not to supply sub-standard material and made the Claimant understand that the said material was to be used in a Solid Waste Management Project, which in fact was a prestigious project of the Central and State Governments, implemented as per the directions of the Hon'ble Supreme Court, and that the Respondent was therefore not in a position to compromise on the quality of the material used in the project, but the Claimant refused to appreciate the seriousness of the situation and continued with his hostile attitude. It is further denied that the Respondent asked the Claimant to supply the complete quantity of material as per the Purchase Order, and that too within the stipulated time frame, but to no avail. It is also denied that the Claimant failed to supply the complete quantity of material, and that due to this shortfall in material, the Respondent was compelled to procure the shortfall from other vendors, and that too at higher rates, under circumstances of exigency, because the project was prestigious for the Respondent, who wished to complete it at any cost, whereby the Respondent suffered huge financial losses besides mental harassment. The paragraph regarding the use of sub-standard material is totally baseless. The use of an alternate make of material was mutually agreed upon, considering the non-availability of the desired makes and in order to keep the execution of the work intact. Further, the reduced price of INR Reduced price amount (₹)/- was the outcome of mutual discussions, as referred to in para no. (i).
vi)That the contents of para 1 of sub-para (vi) of the counter claim are absolutely wrong, incorrect and are reiterated, and are therefore specifically denied. It is denied that, apart from the purchase order, the Respondent had also entrusted a work order to the Claimant, and that the said contract regarding Civil Work was time bound, i.e., time was of the essence of the contract, requiring the Claimant to complete the Civil Work within 100 days from the date of the work order, but the Claimant failed to arrange the sufficient manpower and labour necessary to execute the ongoing project, which ultimately caused financial harm to the Respondent besides delaying the execution of the project. It is further denied that the Respondent asked the Claimant on several occasions to improve his working, but to no avail, and that owing to this continued state of affairs, work came to a total halt on several occasions. It is also denied that vide email dated Date of first painting email the Respondent requested the Claimant to arrange a painting team to paint the structural steel before erecting the same, and again reminded vide email dated Date of reminder painting email that a team be arranged for painting of the steel structure, failing which it would be difficult to paint the structure after erection, but that the Claimant paid no heed to the Respondent's request. The paragraph raised by Respondent company name (Infra) is totally frivolous. The delay in the execution of the project, to whatever extent it occurred, has always been on account of the non-payments and irregularities of Respondent company name, and the same was communicated to them through various emails which have been annexed to the claim of the Claimant. The delay was purely attributable to the delayed payments from the side of Respondent company name.
vii)That the contents of para 1 of sub-para (vii) of the counter claim are absolutely wrong, incorrect and are reiterated, and are therefore specifically denied. It is denied that, owing to the deficient work rendered by the Claimant and the continuous delay in the execution of the work, the Respondent was under constant pressure to complete the work in time, and that the Respondent therefore warned the Claimant on several occasions to complete the work in time, but no fruitful result emerged and the Claimant continued with his hostile attitude towards the assigned work. It is further denied that vide E-mail dated Date of email about extra manpower, the Respondent wrote to the Claimant: "as discussed on telephonic several times and with reference to the trailing mails for engage of extra team/manpower for the speed up of erection work, still no response is getting from your side. Kindly note that we have started the erection work of pre-sorting shed from last month back (inc. all disputes) but still the work is not completed, your vendor has engaged only 07 persons. As per your working criteria, you are taking one month for completing one shed, its means we required next 04 months to complete the overall job. Again requested to please arrange your extra team by today itself at any cost, for speed up of the work." It is further denied that the Respondent again warned of the same situation vide E-mail dated Date of warning email. Further, vide E-mail dated Date of welding email, the Respondent wrote to the Claimant: "with reference to the telephonic discussion with you have regarding the welding of extra based plate for shed numbers 10, 10a, 14, 14a for structural columns, kindly arrange the same by today itself otherwise your labour will be sitting idle. Apart from this, still your new contractor for structural steel erection not started the work due to lack of hydra, electricity, LPG, oxygen etc. / am not understanding that how you are managing your contractor. Kindly revert me back asap." It is also denied that the delay in the execution of the work and the poor speed of work were further explained to the Claimant through various E-mails; vide email dated Date of email on balance material, the Respondent informed the Claimant about the non-supply of the balance structural material for the final compost section and the monsoon shed, and further informed the Claimant about the pendency of the painting of the steel structure and requested that a team be arranged for the same. It is further denied that vide this mail, the Respondent further informed the Claimant that the erection of the structure for the pre-sorting, RDF and inert processing shed was not up to the mark, and about the discontinuation of the work since the preceding 25 days, along with other problems regarding the slow pace of the work. It is also denied that vide another email dated Date of email on poor work progress, the Respondent informed the Claimant about the poor work progress, and again vide email dated Date of email on slow pace of work, the Respondent reminded the Claimant about the slow pace of the civil as well as the mechanical work, which was attributable to the payment dispute of the Claimant with his sub-contractors. It is further denied that vide this email, the Respondent again raised the old issues which the Claimant had failed to resolve despite the repeated requests and reminders of the Respondent. It is also denied that the Claimant failed to improve the pace of work, resulting in the idling of manpower, and that this fact is evident from the mail dated Date of email showing idling of manpower. It is further denied that, owing to the incomplete supply of material as per the purchase order, the delay, the poor quality of the Claimant's work and the idling of manpower, the Respondent had to bear on its own all additional costs pertaining to the labourers' wages, the rent of hired machinery, administrative costs, etc., solely due to the abovementioned defaults on the part of the Claimant, and that the Respondent has suffered losses to the tune of Rs. Amount of additional costs claimed (₹) on account of the abovementioned causes, which the Respondent is entitled to recover from the Claimant. The aforesaid paragraph has already been replied to in the paragraphs above. The Respondent has referred to the email dated Date of respondent's email, to which the Claimant replied with appropriate action on Date of claimant's reply (copy enclosed). Likewise, the Respondent's email dated Date of respondent's second email was replied to immediately, mentioning the pending payment matters (copy enclosed). Similarly, the Respondent's email dated Date of respondent's third email was replied to by the Claimant only after a wait, until Date of claimant's reply to third email, and that reply too pertained to the matter of non-payment.
viii) That the contents of paragraph 1 of sub-paragraph (viii) of the counter claim are absolutely wrong, incorrect and misconceived, and are hence specifically denied. It is denied that, on account of the alleged delay in the execution of the work order, the substandard work rendered by the claimant delayed the project of the respondent by more than six months, including the time spent in getting the work done and completed from another vendor. It is further denied that, on account of this alleged delay of more than six months, the respondent could not commence production of Compost and RDF, and consequently incurred loss of earnings by way of loss of production to the tune of Rs. Loss of production amount (₹)/- as profit. It is also denied that the claimant seeks damages for business losses for a period of one month only subsequent to the stoppage of operations by the claimant, and that the same are actual losses directly emanating from the defaults of the claimant. This paragraph is frivolous and unjustified.
ix) That the contents of paragraph 1 of sub-paragraph (ix) of the counter claim are absolutely wrong, incorrect and misconceived, and are hence specifically denied. It is denied that the respondent is entitled to recover liquidated damages to the tune of Rs. Liquidated damages amount (₹)/- from the claimant for the alleged delay caused by the claimant, in accordance with clause 12 of the work order. This paragraph is frivolous and unjustified.
x)That the contents of paragraph 1 of sub-paragraph (x) of the counter claim are absolutely wrong, incorrect and misconceived, and are hence specifically denied. It is denied that the claimant was legally bound to deposit labour cess to the Government to the tune of 1% of the total value of the work order and purchase order, which comes to Rs. Total value of work and purchase orders (₹)/-, and that the claimant ignored the same despite repeated requests by the respondent. It is further denied that the respondent itself had to deposit the said labour cess with the concerned authorities and thereby suffered a loss of Rs. Loss amount for labour cess access (₹)/-, which amount is alleged to be legally recoverable from the claimant. It is further denied that the claimant failed to produce any documents with regard to labour compliances such as ESIC, PF, Insurance, etc., in utter violation of the clause of the work order. It is also denied that the claimant failed to produce on record any labour licence in its favour issued by the competent labour authorities. The deposit of labour cess is purely the liability of the Respondent's liability qualifier. The annexure letter referred to is addressed in the name of Respondent company name (Infra) Infra and was never brought to the knowledge of the claimant. Further, there is no reference to statutory taxes in the Purchase Order. It would have been virtually impossible for the claimant to work at the site without a labour policy or compliance with statutory requirements such as ESI and PF; neither could the claimant have initiated the work, nor could the Respondent company name have engaged such a contractor. The claimant's sub-contractor, Sub-contractor's name, was a resident sub-contractor to the Respondent company name team on the same site for various other works, provided all statutory compliances to the Respondent company name, and thereafter initiated work on account of Rs. Amount on account of statutory dues (₹)/-. An e-mail dated Date of insurance policy email (copy enclosed), pertaining to a scanned copy of the workmen's insurance policy, is also enclosed.
xi) That the contents of paragraph 1 of sub-paragraph (xi) of the counter claim are absolutely wrong, incorrect and misconceived, and are hence specifically denied. It is denied that the services rendered by the claimant to the other group companies of the respondent are also deficient and below the specified standards, and that those group companies have suffered huge financial losses besides mental harassment. It is further denied that the claimant has outstanding payments and statutory dues with other companies of the group, which are the subject matter of separate proceedings before the courts.
xii) That the contents of paragraph 1 of sub-paragraph (xii) of the counter claim are absolutely wrong, incorrect and misconceived, and are hence specifically denied. It is denied that, besides the financial losses mentioned above, the respondent has also suffered loss of reputation and goodwill, and mental and physical harassment, solely due to the lackadaisical approach of the claimant towards its liabilities entrusted to it under the purchase/work order, and that the claimant is liable to compensate the respondent for all these losses to the tune of Rs. Amount of compensation claimed (₹)/-.
xiii) That the contents of paragraph 1 of sub-paragraph (xiii) of the counter claim are absolutely wrong, incorrect and misconceived, and are hence specifically denied. It is denied that there are numerous defaults and violations on the part of the claimant, that the claimant failed to complete the works within the stipulated time, that the claimant failed to supply the requisite materials, and that the claimant failed in totality to complete the assigned work, thereby causing numerous losses to the respondent as detailed above.
xiv) That the contents of paragraph 1 of sub-paragraph (xiv) of the counter claim are absolutely wrong, incorrect and misconceived, and are hence specifically denied. It is denied that, notwithstanding the facts stated above regarding the failure of the claimant to duly execute the order of supply and works, the respondent has paid an amount of Rs. Amount paid by respondent till date (₹)/- (Rupees Amount paid in words) to the claimant till date, and that the respondent is legally entitled to recover these amounts from the claimant.
4.That the contents of paragraph 4 of the counter claim are absolutely wrong, incorrect and misconceived, and are hence specifically denied. It is denied that, finding no other way out and in order to save its projects, the respondent was compelled to purchase the material/machines from another vendor, namely M/s. Alternate vendor name (M/s), to replace the defective material/machines supplied by the claimant, and that this caused a huge financial burden upon the respondent. It is further denied that debit notes worth Rs. Debit notes amount (₹)/- were issued to the claimant to compensate the losses suffered by the respondent in purchasing the said material from Vendor company name (Conveying Systems) Conveying Systems Pvt. Ltd. and other vendors.
5.That the contents of paragraph 5 of the counter claim are absolutely wrong, incorrect and misconceived, and are hence specifically denied. It is denied that, owing to the deficient work rendered by the claimant and the continuous delay in the execution of the work, the respondent was under constant pressure from the Respondent company name to complete the work in time, and that the respondent warned the claimant several times to complete the work in time, but no fruitful results emerged and the claimant continued with its hostile attitude towards the assigned work.
6.That the contents of paragraph 6 of the counter claim are absolutely wrong, incorrect and misconceived, and are hence specifically denied. It is denied that the services rendered by the claimant to the other group companies of the respondent are also deficient and below the specified standards, and that these group companies have also suffered huge financial losses besides mental harassment. It is further denied that those losses are yet to be assessed and shall be brought on record at the earliest.
7.That the contents of paragraph 7 of the counter claim are absolutely wrong, incorrect and misconceived, and are hence specifically denied. It is denied that, on account of the deficient and delayed work rendered by the claimant, the respondent had to bear, on its own, all additional costs pertaining to idling charges, labour wages, rent of hired machinery and administrative costs, solely due to the defaults on the part of the claimant, and that the claimant is solely liable to compensate the respondent for the same.
8.That the contents of paragraph 8 of the counter claim are absolutely wrong, incorrect and misconceived, and are hence specifically denied. It is denied that, besides the financial losses mentioned above, the respondent has also suffered loss of reputation and goodwill, and mental and physical harassment, solely due to the lackadaisical approach of the claimant towards its liabilities entrusted to it under the purchase order, and that the claimant is liable to compensate the respondent for all these losses.
9.That the contents of paragraph 9 of the counter claim are absolutely wrong, incorrect and misleading, and are therefore specifically denied. It is denied that, as on date, the ledger of the respondent reflects a debit balance of ₹ Debit balance as per ledger (₹)/-, or that the respondent is entitled to recover ₹ Recovery amount claimed (₹)/- from the claimant on the basis whereof the respondent has filed the present counter claim.
10.That the reply to the counter claims is as under: -
A.That the contents of sub-paragraph A of the claim, namely the ledger balance, are absolutely wrong, incorrect and misleading, and are therefore specifically denied. It is denied that the respondent is legally entitled to recover ₹ Amount due as per ledger (₹)/- being the amount due against the claimant as per the ledger.
B.That the contents of sub-paragraph B of the claim, namely the idling charges, are absolutely wrong, incorrect and misleading, and are therefore specifically denied. It is denied that ₹ Amount of additional costs (₹) was incurred by the respondent towards additional costs pertaining to labour wages, rent of hired machinery, administrative costs and the like, allegedly incurred on account of idling of manpower and machinery owing to halts of work on several occasions, which halts are alleged to have been occasioned by faulty and substandard material supplied by the claimant.
C.That the contents of sub-paragraph C of the claim, namely mental pain and harassment, are absolutely wrong, incorrect and misleading, and are therefore specifically denied. It is denied that the respondent is entitled to recover ₹ Amount for mental pain and harassment (₹) on account of mental pain and harassment allegedly suffered by the respondent at the hands of the claimant.
D.That the contents of sub-paragraph D of the claim, namely loss of goodwill and reputation, are absolutely wrong, incorrect and misleading, and are therefore specifically denied. It is denied that the respondent has suffered any loss of reputation and goodwill in the market, particularly in the eyes of Person/entity to whom reputation mattered, or that the claimant is liable to compensate the respondent for the same to the tune of ₹ Reputation loss compensation amount (₹).
E.That the contents of sub-paragraph E of the claim, namely litigation costs, are absolutely wrong, incorrect and misleading, and are therefore specifically denied. It is denied that the respondent is entitled to recover ₹ Litigation cost amount (₹) as litigation costs allegedly incurred by the respondent solely on account of the claimant.
F.That the contents of sub-paragraph F of the claim, namely interest, are absolutely wrong, incorrect and misleading, and are therefore specifically denied. It is denied that the claimant is liable to pay interest @ Rate of interest claimed (%) on the aforesaid total claim amount of ₹ Total counter claim amount (₹)/- till the final adjudication of the case.
It is submitted that the respondent is not entitled to any relief by way of counter claim from the learned Arbitrator.
The prayer clause, along with its sub-paragraphs, of the counter claim is absolutely wrong and is specifically denied. The respondent is not entitled to the relief claimed.
P R A Y E R :-
It is, therefore, most respectfully prayed that this learned Arbitrator may kindly dismiss the counter claims of the respondent and grant relief in favour of the claimant as prayed for in the statement of claim, in the interest of justice, equity and the circumstances of the case.
Pass such further order or orders as this learned Arbitrator may deem fit and proper in the facts and circumstances of the case, in the interest of justice.
It is prayed accordingly.
CLAIMANT
Place of signing (e.g., Delhi)THROUGH
DATED
Date of signing
ADVOCATE
Advocate's name
Advocate's address.
BEFORE THE SOLE ARBITRATOR Arbitrator's name, Arbitration venue (city, state)
Arbitration case number (repeat) OF Year of arbitration case.
In the matter of arbitration between:
Claimant's name (repeat)CLAIMANT
VERSUS
Respondent's name (repeat)RESPONDENT
AFFIDAVIT
I, Deponent's name, aged about Deponent's age years, Director of M/s. Deponent's company name (M/s), do hereby solemnly affirm and declare as under: -
1.That I am the Director of the claimant company and I am conversant with the facts and circumstances of the present case, and as such I am competent to swear this affidavit.
2.That the accompanying reply to the counter claims has been drafted under my instructions, which has been read over and understood by me, and I state that the contents of the same are true and correct.
DEPONENT
VERIFICATION :-
Verified at Place of verification on this Date of verification day of Month and year of verification that the contents of the paragraphs of the above affidavit are true and correct to my knowledge, that no part of it is false and that nothing material has been concealed therefrom.
DEPONENT