Gujarat High Court
Palihill vs Store on 29 September, 2011
Author: Akil Kureshi
Bench: Akil Kureshi
Gujarat High Court Case Information System
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IAAP/27/2010 5/ 5 ORDER
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
PETN.
UNDER ARBITRATION ACT No. 27 of 2010
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PALIHILL
MERCANTILE COMPANY PVT LTD - Petitioner(s)
Versus
STORE
ONE RETAIL INDIA LTD - Respondent(s)
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Appearance
:
NANAVATI
ASSOCIATES for
Petitioner(s) : 1,
MR TARAK DAMANI for Respondent(s) :
1,
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CORAM
:
HONOURABLE
MR.JUSTICE AKIL KURESHI
Date
: 18/02/2011
ORAL
ORDER
The petitioner seeks appointment of arbitrator under Section 11 of the Arbitration and Conciliation Act in following factual background :
The petitioner company and respondent company entered into an agreement of leave and license on 22.6.2007. As per the agreement certain immovable property belonging to the petitioner company was given on license to the respondent company under certain conditions for its use and occupation. However, dispute arose between the parties. It is not in dispute that said agreement contained arbitration clause in following terms :
"14.
It is hereby agreed by and between the parties hereto that in case any dispute or difference arises between the parties with regard to the terms and conditions of this Agreement or relating to the interpretation thereof, the same shall be referred to the Sole Arbitrator and such arbitration shall be in accordance with the provision of the Arbitration and Conciliation Act, 1996, or any statutory modification or re-enactment thereof for the time being in force. The Arbitration shall be held in Mumbai and the proceedings shall be conducted in the English language. The parties agree that the Arbitration Award shall be final and may be enforced as decree. The parties further agree that only the Courts in Mumbai will have jurisdiction in the matter. This Agreement shall be governed by the laws of India."
On account of surfacing of disputes between the parties and in view of arbitration clause in the agreement, petitioner issued a notice to the respondent company on 16.6.2010 calling upon the respondent to agree to appoint Justice M.S. Parikh(retired) of Gujarat High Court to act as an arbitrator. Respondent company replied to the notice of the petitioner rejecting the proposal of Justice Shri M.S. Parikh (retired)as arbitrator instead suggested other names of retired Judges of Bombay High Court as well as Supreme Court. Since parties could not agree to choice of the arbitrator, present petition came to be filed.
In reply to the notice issued by the Court respondent has filed affidavit dated 15.9.2010 in which though no dispute has been raised with respect to presence of arbitration clause or arbitrality of dispute, principal stand taken is that present petition before the Gujarat High Court is not maintainable.
Counsel for the petitioner submitted that opposition of respondent to the jurisdiction of the Court is not tenable. He drew my attention to various clauses of the terms of agreement and further pointed out that property is situated at Ahmedabad, the agreement was executed at Ahmedabad and there is nothing in the agreement to suggest that present application for appointment of arbitrator cannot be filed in Gujarat High Court. In support of his contentions, he relied on an unreported decision of Learned Single Judge of this Court dated 10.5.2010 passed in Arbitration Petition No.6/2010.
On the other hand, counsel for respondent relying on decisions of the Apex Court in case of Rajasthan State Electricity Board v. Universal Petrol Chemicals Limited reported in (2009) 3 Supreme Court Cases 107 and Balaji Coke Industry Private Limited v. Maa Bhagwati Coke Gujarat Private Limited reported in (2009) 9 Supreme Court Cases 403, submitted that present petition is not maintainable.
In the present case, I find that property is situated at Ahmedabad. Respondent had given the property on leave and license basis to the petitioner which agreement was executed at Ahmedabad. Petitioner had enjoyed use of such property under said agreement. Only clause which respondent has pressed in service to oust the jurisdiction of Gujarat High Court is contained in clause-14, wherein it is specified that arbitration shall be held in Mumbai and that proceedings shall be conducted in English language. In my opinion this by itself would not be sufficient to oust the jurisdiction of this Court, particularly, when property itself is situated in Ahmedabad and the agreement was also executed at Ahmedabad. Counsel however, submitted that clause also provides that only Courts in Mumbai will have jurisdiction in this matter. This line is preceded by "The parties agree that the Arbitration Award shall be final and may be enforced as decree." Reference to Courts in Mumbai is therefore, for the purpose of execution of arbitral award and cannot be read as excluding jurisdiction of Gujarat High Court to the limited extent of appointment of arbitrator.
In somewhat similar circumstances, where arbitration clause in the agreement between the parties provided that arbitration would be in English and venue of arbitration shall be at Hyderabad and further that Courts in Hyderabad alone would have right to entertain suits or other claims arising out of contract, Learned Single Judge in judgement dated 10.5.2010 in Arbitration Petition No.6/2010 turned down the objection to the jurisdiction of Gujarat High Court for appointment of arbitrator making following observations :
"16.
Considering clause-30 of the Work Order / Agreement dtd.22/6/2005 and the fact that the registered office of the petitioner is at Ahmedabad and even the registered office of the respondent is at New Delhi and the respondent is carrying its business at New Delhi, it was suggested by the Court to mutually agree to fix the venue of arbitration at Ahmedabad to avoid wastage of time and expenditure, however, Mr.Joshi, learned advocate appearing on behalf of the respondent has not agreed to the same and therefore, as per Clause-30 of the Work Order/ Agreement dtd.22/6/2005, the venue of the arbitration shall be at Hyderabad."
In case of Rajasthan State Electricity Board(supra), Apex Court was pleased to hold that in view of clause excluding the jurisdiction of other Court, Court at Jaipur alone would have jurisdiction to entertain the proceedings. It was a case where Arbitral Reference was being challenged at a Court other than Jaipur. In context of agreement excluding jurisdiction of other Courts, above observations and findings came to be recorded.
In case of Balaji Coke Industry Private Limited(supra), in which on facts, the Apex Court found that parties had voluntarily agreed to the decision of Kolkata High Court even though Court at Gujarat also had jurisdiction to decide arbitration dispute. It was in this background that the Apex Court upheld the objection of the parties to appointment of arbitrator at Ahmedabad and assumption of jurisdiction by Civil Court at Bhavnagar with respect to such arbitration proceedings.
In facts of the case, I am of the opinion that objection of territorial jurisdiction is required to be turned down. However, clause providing for arbitration proceedings to be conducted in Mumbai must be given sanctity to. In that view of the matter appointment of a Judge retired form Gujarat High Court and settled in Ahmedabad as Arbitrator would not be conducive of smooth and expeditious conduct of the arbitration proceedings.
Under the circumstances, Hon'ble Justice Shri M.S. Rane(retired) Judge of Bombay High Court is appointed as sole arbitrator to arbitrate all disputes between the parties and render his award. I am informed he has consented to accept such responsibility. Award shall be submitted as expeditiously as possible. This petition stands disposed of accordingly.
(Akil Kureshi,J.) (raghu) Top