Application for Appointment of Arbitrator No. 16 of 2012. Case: M/s. Hira Steel Limited Vs M/s. Prasanna V. Ghotage. High Court of Bombay (India)
| Case Number | Application for Appointment of Arbitrator No. 16 of 2012 |
| Counsel | For Appellant: Dr. Harsh Pathak, Rohit Bras De Sa and Clayton Fonseca, Advs. and For Respondents: Deep Shirodkar, Adv. |
| Judges | B.R. Gavai, J. |
| Issue | Arbitration And Conciliation Act, 1996 - Sections 10, 11, 11(4), 11(5), 11(6), 34(2), 9; Constitution of India - Article 136 |
| Citation | 2014 (1) ABR 806 |
| Judgement Date | December 06, 2013 |
| Court | High Court of Bombay (India) |
Order:
B.R. Gavai, J., (Goa Bench)
-
The applicant has approached this Court invoking jurisdiction of this Court under Section 11(6) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as "the Act" for the sake of convenience).
The facts in brief giving rise to the application are as under:--
That a contract for sale and purchase of Indian Iron Ore was entered between the respondent as a seller and the applicant as a buyer. Since according to the applicant there was breach in regard to the terms and conditions of a contract between the parties, an application came to be filed under Section 9 of the said Act before the learned District Judge, Panaji for certain interim reliefs against the respondent. That the said application is pending before the learned District Judge. The applicant thereafter invoked Clause 14 of Memorandum of Understanding ("MOU" for short), vide communication dated 27.1.2012. After that till 16.7.2012, except certain exchange of correspondence between the parties, the matter has not proceeded much further. The applicant has therefore invoked jurisdiction of this Court under sub-section (6) of Section 11 of the Act.
-
Heard Dr. Harsh Pathak, learned counsel appearing on behalf of the applicant and Mr. D. Shirodkar, learned counsel appearing on behalf of the respondent.
-
Dr. Harsh Pathak, learned counsel appearing on behalf of the applicant submits that arbitration agreement as per MOU provided for appointment of one arbitrator each of the parties. He submitted that the applicant addressed a notice dated 27.1.2012 thereby invoking Clause 14 of the MOU and calling upon the respondent to attend the meeting at hotel Fidalgo, Panaji, Goa on 27.2.2012 at 3.30 p.m. It is however submitted that there has been no positive response from the respondent. He further submitted that the respondent has been delaying the matter on one pretext or the other and avoiding either Arbitral Tribunal to be constituted or being put to function in effective manner. Learned Counsel therefore submitted that this is a fit case wherein this Court should exercise jurisdiction under Section 11(6) of the said Act. He further submitted that in view of the Section 10 of the said Act, this is a fit case wherein this Court should appoint a sole arbitrator. Learned counsel relied on the judgments of the Apex Court in the case of Deep Trading Company v. Indian Oil Corporation and Ors. (2013) 4 SCC 35: (AIR 2013 SC 1479), Union of India v. Singh Builders Syndicate, (2009) 4 SCC 523: (AIR 2009 SC (Supp) 1795). He has also relied upon the judgment of the Delhi High Court in the case of Akshaya Jain v. Airports Authority of India, 2000 (3) ARBLR 563 Delhi and the judgment of the Andhra Pradesh High Court in the case of K. Venkateshwarlu v. State of A.P. and another, 2003 (3) ARBLR 440 AP.
-
Shri Shirodkar, on the contrary, submits that the Arbitral Tribunal has to be constituted only as per the agreement, between the parties. Learned counsel submits that when the agreement as can be read from Clause 14 of the MOU clearly provides two arbitrator to be appointed by each of the parties and having that been done, it is not permissible for this Court to exercise jurisdiction under Section 11(6) of the said Act.
-
Learned counsel further submits that it is not permissible for this Court while sitting in jurisdiction to appoint an arbitrator under Section 11(6) of the Act to rewrite the contract between the parties. Learned counsel in the alternative submitted that since the Arbitral Tribunal has already come into existence, the jurisdiction under sub-section (6) of Section 11 cannot be exercised by this Court. Learned Counsel relies on judgments of the Apex Court in the case of National Highways Authority of India and another v. Bumihiway DDB Ltd. (JV) and others, (2006) 10 SCC 763: (2006 AIR SCW 4968); Narayan Prasad Lohia v. Nikunj Kumar Lohia and others, (2002) 3 SCC 572: (AIR 2002 SC 1139), Rajasthan State Industrial Development and Investment Corporation and another v. Diamond & Gem Development Corporation Limited and another (2013) 5 SCC 470: (AIR 2013 SC 1241) and the judgment of the learned single Judge of this Court in the case of Mrs. Perm Hoshang Davierwalla and another v. Mr. Kobad Dorabji Davierwalla and others.
-
To appreciate the rival submission, it would be appropriate to refer to Section 10 of the said Act. It is also relevant to refer to subsection (6) of Section 11 of the said Act which read thus:--
-
Number of arbitrators.
(1) The parties are' free to determine the number of arbitrators, provided that such number shall not be an even number.
(2) Failing the determination referred to in sub-section (1), the arbitral tribunal shall consist of a sole arbitrator.
Section 11(6) in the Arbitration and Conciliation Act, 1996
(6) Where, under an appointment procedure agreed upon by the parties,--
(a) a party fails to act as required under that procedure; or
(b) the parties, or the two appointed arbitrators, fail to reach an agreement expected of them under that procedure; or
(c) a person, including an institution, fails to perform any function entrusted him or it under that procedure, a party may request the Chief Justice or any person or institution designated by him take the necessary measure, unless the agreement on the appointment procedure provides other means for securing the appointment.
-
From the tenor of the arguments, it appears to be undisputed position that there is an agreement between the parties to refer the dispute to the arbitration. It is relevant to refer to Clause 14 of MOU agreement between the parties...
To continue reading
Request your trial