Bombay HC on Arbitral Award in Architecture Bills Dispute
The petitioner Proteus Ventures LLP had engaged the respondent for various works in few projects vide techno commercial proposal dated 16.8.2018.
The agreement provided for clause of arbitration before the Council of Architecture.
The Agreement provided interest at 2% per day but the Purchase Order provided interest at 18% per annum.
The dispute is for payments of the respondent for the works in five projects in Mumbai and Pune including work for MESH, Co-Works powered by Proteus and another for a stall at Expo in Nehru Centre Worli & office of Mesh Co-Works at Hotel Merriot, Pune.
The designated partners were made respondents in the arbitration proceedings. Their request for deletion was rejected by the Arbitrator and same is also challenged in this petition. However, the designated partners did not file affidavit and also did not appear in the hearings despite requests. The common lawyer represented Proteus and the Designated Partners.
Arbitral Award dated 16.8.2024 of the Sole Arbitrator appointed by the Council of Architecture – statutory body, for Rs.88.08 lakhs and Rs.24 lakhs for mental agony and hardship.
HELD that the Purchase Order identifies Mesh Co-Works and Proteus separately under entity name but GST registration is the same. Mesh appears to be simply a brand name for offering co-working space by Proteus designed by Archilab.
HELD that the petitioner Proteus being a limited liability partnership, the liability of Proteus cannot be visited on its Designated Partners.
The imposition of joint liability of the Designated Partners that being severed from the award, is interlinked and interconnected with the rest of the impugned award. Such severance and partial setting aside will have no bearing or impact on the other portions of the impugned award.
Costs of Rs.24 lakhs for mental and agony caused by the petitioner and its manner of conduct to trustrate Achilab’s rights is writ large in the recorded and the learned Arbitral Tribunal is the best Judge of the damages to be awarded.
The reference to “mental agony” by itself could not lead to this component of the award being contrary to law. In fact, it is inconsistent with the position declared by the Supreme Court in Padmanabhan Vs. Natesan case (Civil Appeal No.16930 of 2017 dated 23.10.2017) holding that “It is very clear that any dispute or difference which arises under the agreement for enforcing any payment of claim is clearly covered under the said clause. This would certainly include damages.”
Principal of Architect College appointed as Arbitrator in Architectural Disputes may be a “lay person” for the field of law but in dealing with the dispute over an architect’s work, he is most equipped being well versed with issues involved in architecture disputes. He was a person institutionally designated by the Council of Architecture by the Council which administered the independent and institutional selection of arbitrator.
Being a principal of a college, he has conducted the proceedings with dignity and gravitas without getting beckled by the attempts by Proteus to detail the arbitration.
Judgment dated 30.9.2025 of the High Court of Bombay in Commercial Arbitration Petition (L) No.28606 of 2024 of Proteus Ventures LLP and others Vs. Archilab Designs
