Arbitration Case No. 123 of 2010. Case: GEI Industrial Systems Ltd Vs Bharat Heavy Electricals Ltd. High Court of Madhya Pradesh (India)
| Case Number | Arbitration Case No. 123 of 2010 |
| Counsel | For Petitioner: Brian D'Silva, Sr. Adv., with V. Bhide, Adv. and For Respondents: Ashok Lalwani and S. Khare, Advs. |
| Judges | Rajendra Menon, J. |
| Issue | Arbitration and Conciliation Act (26 of 1996) - Section 11 |
| Citation | AIR 2012 MP 44 |
| Judgement Date | October 19, 2011 |
| Court | High Court of Madhya Pradesh (India) |
Judgment:
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Seeking constitution of an Arbitral Tribunal for adjudication of the dispute between the parties, this application is filed by the petitioner under Section 11(6) of the Arbitration and Conciliation Act, 1996.
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Petitioner company claims to be a company incorporated under the Companies Act having its registered office in 26-A, Industrial Area, Govindpura, Bhopal. Itis stated that the petitioner is a reputed company involved in heavy engineering works and has executed various contracts even for the respondent. It is stated that the parties are having long standing business relationship. According to the petitioner, the Oil and Natural Gas Corporation (hereinafter referred to as 'ONGC' for short), a Government of India undertaking, placed certain contract with the respondent, for the purpose of supplying Process Gas Compressor Coolers. The respondent, therefore, invited a limited public tender, where the offer of the petitioner was found to be the lowest and technically acceptable. It is the case of the petitioner that on account of their reputation and finding their product to be good and the rate reasonable, their tender was accepted and a standard agreement of contract executed, which included an arbitration clause. However, vide letter dated 14-7-2001, respondent placed an order for 12 Coolers with the petitioner, to be supplied in two stages of 6 Coolers each. The respondent placed the order and time was the essence of contract. The petitioner immediately procured sufficient raw materials for manufacturing 12 Coolers, the cost of each ran into Crores of rupees. However, by a subsequent communication arbitrarily the number of coolers was reduced to 8 i.e. 4 Coolers in each of the two stages. In view of the above, it seems that certain disputes arose and when the same was not resolved, petitioner sought appointment of an arbitrator for resolution of the dispute and when the same was not accepted, this application is filed.
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Shri Brian D'Silva, learned Senior Advocate appearing for the petitioner, invited my attention to the material available on record and made an oral submission to the effect that the contract was executed in the standard form, which had an arbitration agreement, but the said agreement is not available with the petitioner. Learned senior Advocate submits that the existence of the arbitration agreement can be inferred from the communications available on record. He points out that when the dispute had arisen, communications were made between the parties and vide order dated 28-11-2001 - Annexure P/5, certain claims were raised by the petitioner, due to change in the contract set up by the reduction of coolers. Correspondence took place and by referring to the various correspondence with regard to settlement of the issues, Shri Brian D'Silva, learned senior Advocate, emphasized that the respondent having admitted the position of getting the dispute resolved by arbitration cannot now say that there is no arbitration agreement. Inviting my attention to the communication Annexure P/10, dated 7-5-2007, seeking nomination of an arbitrator by the respondent and the corresponding reply of the respondent as contained in Annexures P/13, P/14 and P/15, learned senior Advocate argued that the respondents having accepted for amicable resolution of dispute by arbitration cannot now contend that an arbitration clause is not in existence. Placing reliance on the following judgments Shri B. D' Silva, learned senior Advocate, argues that from the correspondences available on record, existence of an arbitration agreement can be inferred. The judgment relied upon are...
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