### Arbitration Case Analysis: M/S SEMA Constructions Pvt. Ltd. vs Garry Infrastructure Engineers Pvt.

Ltd.

#### 1. Cause Title (Before the Hon’ble Arbitrator)

**Arbitration Case: M/S SEMA Constructions Pvt. Ltd. vs Garry Infrastructure Engineers Pvt. Ltd.**

This arbitration case, presented before the Hon’ble Arbitrator, involves a contractual dispute between
M/S SEMA Constructions Pvt. Ltd. (the Claimant) and Garry Infrastructure Engineers Pvt. Ltd. (the
Respondent). The Claimant, a construction company registered under the Companies Act of 1956,
completed a housing project for the economically weaker section as per the terms of the agreement
with the Respondent. Upon project completion, a final bill was raised by the Claimant. The Respondent
made a partial payment, excluding a retention amount of Rs. 1,28,000/-, which led to the current
dispute requiring arbitration for resolution.

#### 2. Claim Statement under Section 23 of the Arbitration & Conciliation Act, 1996

**Detailed Claim Statement**

Pursuant to Section 23 of the Arbitration & Conciliation Act, 1996, the Claimant submits a
comprehensive claim statement. This document outlines the contractual engagement, the fulfillment of
the project to the Respondent's satisfaction, and the subsequent financial disagreement.

The Claimant, M/S SEMA Constructions Pvt. Ltd., asserts that they adhered to the agreed terms and
completed the construction project without significant defects. The final bill, amounting to the full
project cost, was presented to the Respondent, who then made a payment excluding Rs. 1,28,000/-,
designated as retention money. The Claimant argues that this amount was to be released upon
satisfactory completion of the project. Despite repeated requests and reminders, the Respondent
withheld the retention amount, citing the need for repairs. The Claimant disputes this, stating that the
construction was defect-free and the retention amount should have been paid in full.

#### 3. Facts of the Case

**Chronology of Events**
- **Contract Formation:** M/S SEMA Constructions Pvt. Ltd. entered into an agreement with Garry
Infrastructure Engineers Pvt. Ltd. to construct affordable housing for economically weaker sections.

- **Project Execution:** The Claimant executed the project as per the specifications laid out in the
contract, completing the work to the Respondent's satisfaction.

- **Final Billing:** Upon completion, the Claimant issued a final bill for the total project cost. The
Respondent paid the bill, excluding Rs. 1,28,000/- as retention money.

- **Retention Amount Dispute:** The Claimant made several requests for the release of the retention
money, asserting that the project was defect-free. The Respondent claimed the amount was retained to
cover repairs, allegedly necessary due to defects in the construction.

- **Current Dispute:** The disagreement over the legitimacy of the retention and the necessity of the
alleged repairs has led to this arbitration.

#### 4. Points at Issue

**Key Issues for Arbitration**

1. **Legitimacy of Retention:** Whether the Respondent’s retention of Rs. 1,28,000/- is justified.

2. **Construction Quality:** Whether there were substantial defects in the Claimant’s construction
work that warranted the retention.

3. **Use of Retention Money:** Whether the Respondent appropriately utilized the retention money
for necessary repairs.

4. **Intention and Good Faith:** Whether the Respondent acted with malafide intention by withholding
the retention amount.

Each issue will be examined based on the evidence and testimonies provided by both parties to
determine the validity of the claims and counterclaims.

#### 5. Relief or Remedy Sought

**Claims for Redress**

- **Release of Retention Amount:** The Claimant requests that the Rs. 1,28,000/- retention money be
paid immediately, arguing that the withholding is unjustified.

- **Interest on Retention Amount:** The Claimant seeks interest on the retained amount from the date
it was due until the date of actual payment, compensating for the delay.

- **Compensation for Damages:** The Claimant requests compensation for financial losses incurred due
to the withheld payment and the resulting cash flow issues.

- **Reputational Damage:** The Claimant seeks additional compensation for the tarnishing of their
reputation due to the Respondent’s allegations of defective work.

- **Legal Costs:** The Claimant requests reimbursement for the legal costs incurred during the
arbitration process.

#### 6. Prayer

**Specific Requests to the Arbitrator**

The Claimant’s prayer to the Arbitrator includes:

1. **Declaratory Relief:** A declaration that the Respondent's retention of Rs. 1,28,000/- was
unwarranted and unjustified.

2. **Monetary Relief:** An order directing the Respondent to release the retained amount of Rs.
1,28,000/- along with interest calculated from the due date.

3. **Compensation for Losses:** Awarding compensation for the financial and reputational damage
suffered by the Claimant due to the Respondent's actions.

4. **Legal Costs:** An order for the Respondent to cover all legal costs incurred by the Claimant in
pursuing the arbitration.

5. **Additional Relief:** Any other relief that the Arbitrator deems just and proper under the
circumstances.
#### 7. Signature of the Claimant and Advocate for Claimant

**Authentication of the Claim Statement**

The claim statement, along with all supporting documents and evidence, is duly signed by the Chief
Executive Officer (CEO) of M/S SEMA Constructions Pvt. Ltd. The signature of the CEO confirms the
authenticity and accuracy of the claims. Additionally, the statement is countersigned by the Claimant’s
legal representative/advocate, ensuring that the document adheres to legal standards and formal
submission requirements.

#### 8. Objection Statement

**Respondent’s Rebuttal**

The Respondent, Garry Infrastructure Engineers Pvt. Ltd., submits an objection statement, disputing the
claims made by the Claimant. The key points of the Respondent’s rebuttal are:

- **Justification of Retention:** The Respondent argues that the retention of Rs. 1,28,000/- was
necessary to address several defects in the construction. They claim that the retention money was used
for essential repairs and finishing work.

- **Evidence of Defects:** The Respondent provides evidence, including inspection reports and repair
invoices, to substantiate their claim that the construction work had significant defects requiring
remediation.

- **Denial of Malafide Intention:** The Respondent denies any malafide intention, asserting that their
actions were in good faith and aimed at ensuring the quality and safety of the housing project.

#### 9. Prayer

**Respondent’s Requests to the Arbitrator**

In their prayer, the Respondent requests the Arbitrator to:

2. **Validation of Retention:** Validate the retention and utilization of Rs. 1,28,000/- for necessary
repairs and finishing works.

3. **Cost of Arbitration:** Award the costs of the arbitration process to be borne by the Claimant,
arguing that the arbitration was initiated due to unfounded claims by the Claimant.

#### 10. Framing of Issues

**Critical Questions for Determination**

The Arbitrator frames the following issues to be addressed during the arbitration process:

1. **Existence of Defects:** Whether the construction work carried out by the Claimant had significant
defects as alleged by the Respondent.

2. **Utilization of Retention Money:** Whether the retention amount of Rs. 1,28,000/- was rightfully
utilized by the Respondent for necessary repairs.

3. **Entitlement to Retention Amount:** Whether the Claimant is entitled to the release of the
retention amount along with interest.

4. **Good Faith:** Whether the Respondent acted in good faith or with malafide intention in retaining
and utilizing the amount.

#### 11. Witnesses & Evidence

**Detailed Examination Process**

**Examination-in-Chief:**

- **Claimant’s Witnesses:** The Claimant presents witness testimonies from key personnel, including
the Chief Executive Officer, Managing Director, and Chief Financial Officer. These testimonies aim to
demonstrate the quality of the construction work and refute the Respondent’s claims of defects.
- **Respondent’s Witnesses:** The Respondent presents testimonies from their Project Executive,
Construction Manager, and Accountant. These witnesses provide insights into the alleged defects and
the necessity of the repairs carried out using the retention money.

**Cross-Examination:**

- **Challenge and Verification:** Both parties cross-examine the opposing witnesses to challenge the
credibility of their statements and verify the authenticity of the evidence presented. The cross-
examination focuses on uncovering any inconsistencies and testing the validity of the claims and
counterclaims.

**Re-Examination:**

- **Clarification and Emphasis:** Witnesses are re-examined to clarify any ambiguities raised during
cross-examination and to emphasize key points that support their respective party’s case.

**Documentary Evidence:**

- **Claimant’s Evidence:** The Claimant submits documents such as project completion certificates,
payment receipts, and communication records requesting the release of the retention money.

- **Respondent’s Evidence:** The Respondent submits inspection reports, repair invoices, and
photographs of the alleged defects and subsequent repairs.

#### 12. Arbitral Award

**Final Decision by the Arbitrator**

Based on the comprehensive examination of evidence and witness testimonies, the Arbitrator issues a
detailed award addressing the framed issues. The award includes:

- **Findings on Defects:** A determination on whether the construction work had significant defects as
claimed by the Respondent.

- **Legitimacy of Retention:** A ruling on whether the Respondent’s retention and utilization