Arbitration Petition No. 20 of 2011. Case: Antrix Corporation Ltd. Vs Devas Multimedia P. Ltd.. Supreme Court (India)
| Case Number | Arbitration Petition No. 20 of 2011 |
| Judges | Altamas Kabir, C.J.I. and Surinder Singh Nijjar, J. |
| Issue | Arbitration and Conciliation Act, 1996 - Sections 2(1), 2(2), 5, 8, 10, 11, 11(2), 11(3), 11(4), 11(5), 11(6), 11(10), 12, 13, 14, 15, 16, 19(2), 34; Companies Act, 1956; International Chamber of Commerce Rules of Arbitration; UNCITRAL Rules |
| Judgement Date | May 10, 2013 |
| Court | Supreme Court (India) |
Judgment:
Altamas Kabir, C.J.I.
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An application Under Section 11(4) read with Section 11(10) of the Arbitration and Conciliation Act, 1996, hereinafter referred to as "the 1996 Act", has given rise to an important question of law relating to the scope and ambit of the powers of the Chief Justice Under Section 11(6) of the said Act. In view of the importance of the question, which has arisen, the matter which was being heard by the delegatee of the Chief Justice, has been referred to a larger Bench for determination thereof.
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M/s. Antrix Corporation Limited, the Petitioner herein, a Government Company incorporated under the Companies Act, 1956, and engaged in the marketing and sale of products and services of the Indian Space Research Organization (ISRO), entered into an Agreement with the Respondent, Devas Multimedia P. Ltd., hereinafter referred to as "Devas" on 28th January, 2005, for the lease of Space Segment Capacity on ISRO/Antrix S-Band Spacecraft. Article 19 of the Agreement empowered the Petitioner to terminate the Agreement in certain contingencies. It also provided that the Agreement and the rights and responsibilities of the parties thereunder would be subject to and construed in accordance with the laws of India. In other words, the domestic law would be the governing law of the Agreement.
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Article 20 of the Agreement deals specially with arbitration and provides that in the event any dispute or difference arises between the parties as to any clause or provision of the Agreement, or as to the interpretation thereof, or as to any account or valuation, or as to rights and liabilities, acts, omissions of any party, such disputes would be referred to the senior management of both the parties to resolve the same within 3 weeks, failing which the matter would be referred to an Arbitral Tribunal comprising of three Arbitrators. It was provided that the seat of arbitration would be New Delhi in India. It was also provided that the arbitration proceedings would be held in accordance with the rules and procedures of the International Chamber of Commerce (ICC) or UNCITRAL.
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On 25th February, 2011, the Petitioner Company terminated the Agreement with immediate effect in terms of Article 7(c) read with Article 11(b) of the Agreement in keeping with the directives of the Government, which it was bound to follow under Article 103 of its Articles of Association. By its letter dated 28th February, 2011, the Respondent objected to the termination. On 15th April, 2011, the Petitioner Company sent to the Respondent Company a cheque for Rs. 58.37 crores refunding the Upfront Capacity Reservation Fee received from Devas. The said cheque was, however, returned by Devas on 18th April, 2011, insisting that the Agreement was still subsisting.
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In keeping with the provisions of Article 20 of the Arbitration Agreement, the Petitioner wrote to the Respondent Company on 15th June, 2011, nominating its senior management to discuss the matter and to try and resolve the dispute between the parties. However, without exhausting the mediation process, as contemplated under Article 20(a) of the Agreement, Devas unilaterally and without prior notice to the Petitioner, addressed a Request for Arbitration to the ICC International Court of Arbitration on 29th June, 2011, seeking resolution of the dispute arising under the Agreement. Through the unilateral Request for Arbitration, Devas sought the constitution of an Arbitral Tribunal in accordance with the ICC Rules of Arbitration, hereinafter referred to as "theInternational Chamber of Commerce Rules", and nominated one Mr. V.V. Veedar, Queen's Counsel, as its nominee Arbitrator, in accordance with the ICC Rules.
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According to the Petitioner, it is only on 5th July, 2011, that it came to learn that Devas had approached the ICC and had nominated Mr. V.V. Veedar, as its nominee Arbitrator, upon receipt of a copy of the Respondent's Request for Arbitration forwarded by the ICC. By the said letter, the Petitioner was also invited to nominate its nominee Arbitrator.
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Instead of nominating its Arbitrator, the Petitioner, by its letter dated 11th July, 2011, once again requested Devas to convene the Senior Management Team meet on 27th July, 2011, in terms of the Agreement. Pursuant to such request, a meeting of the Senior Management Team was held, but Devas insisted that the parties should proceed to arbitration and did not discuss the issues in accordance with Article 20(a) of the Agreement. Despite the attempt to resolve the dispute through the Senior Management Team and despite the fact that Devas had already invoked the Arbitration Agreement by making a Request for Arbitration to the ICC and had also appointed its nominee Arbitrator under the ICC Rules, the Petitioner appointed Mrs. Justice Sujata V. Manohar, as its Arbitrator and called upon Devas to appoint its nominee Arbitrator within 30 days of receipt of the notice. Consequently, while Devas had invoked the jurisdiction of the ICC on 29th June, 2011, the Petitioner subsequently invoked the Arbitration Agreement in accordance with the UNCITRAL Rules on the ground that Devas had invoked International Chamber of Commerce Rules unilaterally, without allowing the Petitioner to exercise its choice. Having invoked the Arbitration Agreement under the UNCITRAL Rules, the Petitioner called upon the Respondent to appoint its Arbitrator within 30 days of receipt of the notice.
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On 5th August, 2011, the Petitioner wrote to the Secretariat of the ICC Court stating that it had appointed its Arbitrator, in accordance with the Agreement between the parties, asserting that in view of Article 20 of the Agreement, the arbitral proceedings would be governed by the Indian law, viz., the Arbitration and Conciliation Act, 1996.
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The Respondent did not reply to the Petitioner's letter dated 30th July, 2011. However, the International Chamber of Commerce, by its letter dated 3rd August, 2011, responded to the Petitioner's letter dated 30th July, 2011, and indicated as follows:
We refer to our letter dated 18 July, 2011, and remind the parties that the issues raised regarding the arbitration clause would shortly be submitted to the Court for consideration. All comments submitted by the parties will be brought to the Court's attention. In this regard, any final comments from the parties may be submitted to us by 5 August, 2011.
Should the Court decide that this arbitration shall proceed pursuant to Article 6(2) of the Rules, any decision as to the jurisdiction of the Arbitral Tribunal shall be taken by the Arbitral Tribunal itself.
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It is in such circumstances that the application Under Section 11(4) read with Section 11(10) of the 1996...
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