Interplay of GCC & SCC for Existence of Arbitration Agreement

Judgment dated 27.4.2026 of the High Court at Bombay in Commercial Arbitration Petition No.1070 of 2025 with Commercial Arbitration Application No.675 of 2025 of Generic Engineering Construction and Projects Ltd Vs.  Maharashtra Maritime Board.

Termination of Work Order & Existence of Arbitration Agreement

Pre-arbitral or departmental clauses are subordinate to arbitration

Interplay of GCC & SCC for Existence of Arbitration Agreement

These sections 9 and 11 petitions, arose out of the disputes in respect of the Work Order dated 25.1.2023 and the Agreement dated 6.1.2023 for construction of office building of the respondent. The respondent issued the order dated 18.8.2025 terminating the work order & the agreement.

Clauses 25.2 and 25.3 of GCC provide for resolution of disputes through arbitration on the decision of the Engineer.  However, according to the respondent, the said clauses do not deal with the dispute relating to termination of the contract.  Clause 36 of the contractor’s bid for internal dispute resolution and prevails over the arbitration clauses of GCC.

There is no conflict between Clause 36 of the Contractor’s bid and Clause 25 of GCC. 

In a case where few other clauses in the contract may be slightly inconsistent or may be in conflict with the main arbitration clause, the Courts will have to rule in favour of the arbitration rather than giving weightage to those confusing or conflicting clauses. Once there is clear agreement to arbitrate, the Courts would tend to ignore other clauses of contract which may create confusion about existence of arbitration agreement. After all arbitration is aimed at declogging the overburdened Courts and therefore Courts need to necessarily rule in favour of arbitration rather than concentrating on other inconsistent clauses for holding that specific arbitration clause present in the contract would get nullified by those clauses.