Arbitration Petition No. 6 of 2013. Case: Schlumberger Asia Services Ltd. Vs Oil and Natural Gas Corporation Ltd.. Supreme Court (India)

Case NumberArbitration Petition No. 6 of 2013
CounselFor Appellant: Sanjiv Puri, Sr. Adv., Aditya Chhibber and B.K. Satija, Advs. and For Respondents: Siddharth Luthra, ASG, Gaurav Agrawal, Shankar Narayanan and Arjun Diwan, Advs.
JudgesSurinder Singh Nijjar, J.
IssueArbitration and Conciliation Act, 1996 - Sections 3, 11, 11(6), 21, 43, 43(2); Companies Act, 1956; Limitation Act, 1963
Citation2013 (6) ABR 251, 2013 (VI) AD (SC) 8, AIR 2013 SC 3778, 2013 (2) ARBLR 217 (SC), 2013 (5) AWC 4371 SC, 2013 (4) CDR 925 (SC), 2013 (116) CLA 18 (SC), 2013 (3) CompLJ 392 (SC), JT 2013 (8) SC 583, 2013 (3) RCR 331 (Civil), 2013 (7) SCALE 198, 2013 (7) SCC 562
Judgement DateMay 09, 2013
CourtSupreme Court (India)


Surinder Singh Nijjar, J.

1. This petition is filed Under Section 11(6) of the Arbitration and Conciliation Act, 1996 seeks a direction from this Court for appointment of the nominee Arbitrator on behalf of the Respondent and also appointment of third Arbitrator (Presiding Arbitrator) in the Arbitral Tribunal to adjudicate the disputes arises between the parties.

2. The Petitioner is a Company incorporated and registered under the law of Hong Kong having its project office in India and one of the base offices at Mumbai. The Respondent is a Corporation registered under the Companies Act, 1956 having its registered office at Jivan Bharti Tower-2, 124, Circus New Delhi.

3. In its counter-affidavit, the Respondent has raised a preliminary objection to the maintainability of the petition. It is submitted by the Respondent that the Petitioner has filed the present case only to bring unnecessary litigation. The arbitration petition is an abuse of process of law and the claims made are barred by a long period of time and are, therefore, dead claims.

4. In order to decide the preliminary objection, it would be necessary to take note of certain relevant events.

5. The Petitioner and the Respondent had entered into and executed a contract dated 7th December, 2004 (effective from the date of issue of the firm order dated 6th August, 2004). The contract under Clause 27 provides for arbitration as the mechanism for resolution of any dispute that may arise between the Petitioner and the Respondent. The arbitration clause reads as under:


27.1 Except as otherwise provided elsewhere in the CONTRACT if any dispute, difference, question or disagreement arises, at any time before or after completion or abandonment of work, between the parties hereto or their respective representatives or assignees, at any time in connection with construction, meaning, operation, effect, interpretation or out of the CONTRACT or breach thereof the same shall be decided by an Arbitral Tribunal consisting of three Arbitrators. Each party shall appoint one Arbitrator and the Arbitrators so appointed shall appoint the third Arbitrator who will act as Presiding Arbitrator.

The party desiring the settlement of dispute shall give notice of its intention to go for arbitration clearly stating all disputes to be decided by arbitral tribunal and appoint its own arbitrator and call upon the other party to appoint its own arbitrator within 30 days. In case a party fails to appoint an arbitrator within 30 days from the receipt of the request to do so by the other party or the two Arbitrators so appointed fail to agree on the appointment of third Arbitrator within 30 days from the date of their appointment, upon request of a party, the Chief Justice of India or any person or institution designated by him (in case of International Commercial Arbitration) shall appoint the Arbitrators/Presiding Arbitrator. In case of domestic Contracts, the Chief Justice of the High Court or any person or institution designated by him within whose jurisdiction the subject purchase order/CONTRACT has been placed/made, shall appoint the arbitrator/Presiding Arbitrator upon request of one of the parties.

If any of the Arbitrators so appointed dies, resigns, incapacitated or withdraws for any reason from the proceedings, if shall be lawful for the concerned party/arbitrators to appoint another person in his place in the same manner as aforesaid. Such person shall proceed with the reference from the stage where his predecessor had left if both parties consent for the same; otherwise, he shall proceed de novo.

It is a term of the CONTRACT that the party invoking arbitration shall specify all disputes to be referred to arbitration at the time of invocation of arbitration and not thereafter.

It is also a term of the CONTRACT that neither party to the CONTRACT shall be entitled for any ante-lite (pre-reference) or pendent-lite interest on the amount of the award.

The Arbitral Tribunal shall give reasoned award and the same shall be final, conclusive and binding on the parties.

The venue of the arbitration shall be at Mumbai, India.

It is a term of the CONTRACT that the cost of the arbitration will be borne by the parties in equal shares.

Subject to as aforesaid the provisions of the Arbitration and Conciliation Act, 1996 and any statutory modifications or re-enactment in lieu thereof shall apply to the arbitration proceedings under this clause.

Clause 26 of the Contract further provides as under:


This agreement including all matter connected with this Agreement, shall...

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