Bombay High Court Rules Arbitration Clause In Draft Concession Agreement Annexed To Bid Document Not Binding On Parties

A Single Judge of the Bombay High Court (Court), vide its Order and Judgement dated 19 September 2017, found that an arbitration clause in the draft concession agreement annexed to the bid document does not constitute a binding arbitration agreement between the parties. The Court ruled that as the concession agreement annexed to the bid document had not been executed, the arbitration clause therein could not be given effect to.

BACKGROUND

The State of Maharashtra (Respondent) had issued a tender for a Build, Operate & Transfer project for the construction of a government colony (Tender) in Mumbai. A Draft Concession Agreement, which was to be executed between the parties upon a successful bid, was annexed as Exhibit 'B' to the tender document. As the Petitioner had emerged as the successful bidder, a Letter of Acceptance (LoA) was issued to the Petitioner by the Respondent.