Delhi High Court - Orders
Ambhuj Hotel And Real Estate Pvt Ltd ... vs Ministry Of Raliways And Anr on 16 May, 2024
Author: Dinesh Kumar Sharma
Bench: Dinesh Kumar Sharma
$~1 & 2
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ ARB.P. 67/2024
AMBHUJ HOTEL AND REAL ESTATE PVT LTD THROUGH ITS
DIRECTOR ..... Petitioner
Through: Mr. S. S. Sisodia, Mr. Saurav Kr.
Singh, Ms. Muskan Rawlley, Mr.
Moksh Kataria, Advs
versus
MINISTRY OF RALIWAYS AND ANR. ..... Respondents
Through: Mr. Vineet Dhanda, CGSC with Mr.
A. Singh, Mr. Abhijit Kadyan, Advs.
for R-1
+ ARB.P. 252/2024
AMBUJ HOTEL AND REAL ESTATE PVT LTD ..... Petitioner
Through: Mr. S. S. Sisodia, Mr. Saurav Kr.
Singh, Ms. Muskan Rawlley, Mr.
Moksh Kataria, Advs
versus
MINISTRY OF RALIWAYS AND ANR. ..... Respondents
Through: Mr. Vineet Dhanda, CGSC with Mr.
A. Singh, Mr. Abhijit Kadyan, Advs.
for R-1
CORAM:
HON'BLE MR. JUSTICE DINESH KUMAR SHARMA
ORDER
% 16.05.2024 I.A. 1201/2024 (exemption) in ARB.P. 67/2024 I.A. 4411/2024(exemption) in ARB.P. 252/2024 Exemptions are allowed subject to all just exceptions.
This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 31/05/2024 at 21:53:48 ARB.P. 67/2024 and ARB.P. 252/2024
1. The present petitions have been filed under Section 11 of the Arbitration and Conciliation Act, 1996 (hereinafter, referred to as the 'A&C Act'), the petitioner seeks appointment of an Arbitral Tribunal comprising of a Sole Arbitrator to adjudicate the disputes between the parties.
2. Learned counsel for the petitioner submits that the parties had entered into a Tripartite Agreement dated 08.09.2017 in ARB.P. 67/2024 and 22.08.2014 in ARB.P. 252/2024. It is submitted that the said Agreement contains an arbitration clause (clause 8.09) in both matters, which provides that all disputes, with respect to the said agreement, shall be referred to arbitration as per provisions of the A&C Act. It has been submitted that disputes having arisen between the parties, the petitioner invoked arbitration vide legal notice dated 19.09.2023, to which no response has been received till date. The claim amount is around Rs. 4, 65,00,000/- in ARB.P. 67/2024 and Rs. 2,65,00,000/- in ARB.P. 252/2024.
3. Learned counsel for the petitioner submits that the corporate office of IRCTC is itself based in New Delhi as set out in the agreement itself has only got the power to manage the catering services, power to supervise the catering services, collect the license fee, to terminate the contract, to raise the demand notices etc. from the licensee, the petitioner herein, is also based in Delhi and having its corporate office at 7575/ 1, ram Nagar Paharganj, New Delhi- 110055, thus this Court has got the jurisdiction to appoint the independent Arbitrator under Section 11(6) of the Act, when despite the receipt of the invocation of This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 31/05/2024 at 21:53:48 the arbitral notice issued by the petitioner under section 21, till date no response has come.
4. Learned counsel for the petitioner also submitted that in ARB.P. 187/2024 and ARB. P 225/2024, which relates to the same parties in different trains, Coordinate Bench of this Court of Hon'ble Justice Prathiba Singh vide its order dated 16.04.24 has already appointed Justice Dinesh Kumar Singh (Retd.), through DIAC as the sole Arbitrator to adjudicate the disputes between parties and as the parties are the same and the disputes broadly relates to the same issue, thus following the broad principle laid down in Gammon India Ltd. & Anr. v. National Highways Authority Of India (2020:DHC:2144) by this Court and therefore requests to appoint the same sole arbitrator to adjudicate the issues/disputes to avoid the different opinions/awards on same issue and curtail the multiplicity of proceedings.
5. Learned standing counsel for respondent submits that in fact, the Coordinate Bench had not taken into account certain relevant factors and the law. However, the fact of the matter is that these orders/observations have not been challenged.
6. Learned counsel for respondent no. 2 has submitted that the present petition is not maintainable as the present proceeding have been instituted without proper authorization. It is submitted that as per the board resolution Mr. Parth Singh, i.e., the Director of Ambuj Hotel and Real Estate Pvt. Ltd. is authorised to appoint an advocate to draft and file any Petition, and not to institute any proceeding on behalf of the Company. Reliance has been placed upon Aditya Ganapa and Another Vs Religare Finvest Ltd. (2015 SCC OnLine Del 194683) This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 31/05/2024 at 21:53:49 wherein the arbitral award was set aside only on the ground that the person filing the SOC was not authorised to do so by the Power of Attorney on record.
7. Learned counsel has further submitted that the mandatary pre arbitral mechanism has not been followed as the notice invoking arbitration in sought reference of disputes to arbitration under "Article/Clause 20"
of the MLA dated 03.05.2016. The said Clause stipulates that:
"20.1 In the event of any dispute, controversy or claim of any kind of nature... the parties shall firstly attempt to amicably resolve such dispute through the highest level of negotiations and discussion 20.2 In the event that Disputes between the parties subsist beyond 30 days negotiation between the Parties, then the Dispute shall be settled as per provisions of Arbitration and Conciliation Act 1996. ...."
Therefore, it is submitted that the Clause 20, pursuant whereto the invocation has been sought provides for a mandatory pre-arbitral mechanism. Such mandatory pre-arbitral mechanisms have been upheld by this Court in RS Khanna & Sons vs Rites Ltd. & Ors. (Judgment rendered on 29.01.2024).
8. It has further been submitted that the Clauses mandating attempts at amicable settlement as precursor to invocation of arbitration have also been upheld by this court in various cases wherein this Court was pleased to find the pre-arbitral conciliation to be mandatory, and the application under Section 11 of the A&C Act, was found to be pre-mature. Learned counsel has placed reliance upon Haldiram Manufacturing Company pot. Ltd. vs DLF Commercial Complexes Limited (2012 SCC OnLine Del 2139) to buttress his argument This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 31/05/2024 at 21:53:49 wherein, a Section 8 application seeking reference of dispute to arbitration, was found to lack merit as the party filing the application had not followed the pre-arbitral conciliation steps and therefore the request for reference was not entertained as that stage.
9. It must fairly be stated that such pre-arbitration clauses mandating amicable settlement have in certain cases being given a go-by, when the arbitration has been invoked as a matter of urgency or where the court has come to a conclusion that no fruitful purpose will be served by taking recourse to conciliation. In the present case, no attempt whatsoever has been made at negotiation in terms of Clause 20.1. there is no averment in the petition that there is any urgency in approaching this Hon'ble Court or that the conciliation shall serve no fruitful purpose.
10.The petition is not maintainable as this Hon'ble Court has no jurisdiction to entertain the present application under Section 11 of the A&C Act. The invocation of arbitration is under the MLA Para 9 (Pg.
64). The MLA carries a specific exclusive jurisdiction clause (Article 21.4 at Pg 45) (Distinct from the Dispute Resolution Clause under Article 20.1 to Article 20.4). Article 20.2(a) mandated arbitration by a Gazetted Railway Officer.
11.Learned counsel for the respondent no. 2 submitted that the order of the Coordinate Bench of this court records no finding on the aspect of the Tripartite Agreement overriding the exclusive jurisdiction clause of the MLA. Para 10 of the said order only records that "After having perused the above clauses and the fact that the IRCTC is itself based This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 31/05/2024 at 21:53:49 in Delhi as set out in the agreement itself, this Court would have jurisdiction to appoint the Arbitrator under Section 11(6) of the Act."
12.Learned counsel for the respondent no. 2 submits that the present case qualifies as one where though the parties have not delineated the seat of arbitration, they have agreed on an exclusive jurisdiction clause. It is submitted that the settled law in such a scenario is that such exclusive jurisdiction clause shall guide the exercise of power under Section 11 by the competent High Court. Reliance placed upon Aarka Sports Management Pvt. Ltd. (MANU/DE/1347/2020).
13.Learned counsel submitted that the exclusive jurisdiction clause in the present case (Article 21.4 of MLA) shall guide the exercise of power in the Section 11 petition, and the High Court of Andhra Pradesh alone shall be competent court to appoint the sole arbitrator.
14.Before proceeding further it would be appropriate to look into the order passed by the coordinate bench of this court which is reproduced herein as under:
" 1. This hearing has been done through hybrid mode.
2. This is a petition under Section 11(6) of the Arbitration and Conciliation Act, 1996 (hereinafter, 'the Act') seeking appointment of an independent Arbitrator. The background of the petition is that the Petitioner was awarded with a Master License Agreement (hereinafter, 'MLA') for on board catering services in Kalka Shatabdi Express for a period of five years from 3rd February, 2014 to 2nd February, 2019. The license fee for providing the catering service was Rs.16.15 crores. Thereafter, the zonal railway delegated its power to Indian Railway Catering and Tourism Corporation (hereinafter, 'IRCTC') - Respondent no. 2 to manage and supervise the services rendered by the licensee Petitioner This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 31/05/2024 at 21:53:49 and to this effect, a Tripartite Agreement got executed amongst Chief Commercial Manager Northern Railway.
3. The case of the Petitioner is that there was a further renewal clause, dated 12th December, 2019, and in accordance with the MLA, the License Fees was revised with an additional 10 percent amounting to Rs. 20,96,55,550/-. It is stated that the license terms were revised again after the renewal retroactively.
4. Thereafter, disputes arose in respect of the renewal and license fee that was to be paid. A notice for appointment of Arbitrator was issued on 19th September, 2023 in terms of the Tripartite agreement dated 26th July, 2017.
5. The matter was listed on 8th February, 2024. Notice was issued to the Union of India and the IRCTC. Mr. Harshit Agarwal, ld. Counsel appears for the IRCTC and Mr. Vineet Dhanda, ld. Counsel along with Mr. Kushagra Kumar, ld. Counsel appears for the Union of India.
6. On behalf of IRCTC, it is submitted that the initial MLA was executed on 16th May, 2014 contained a jurisdiction clause as also an arbitration/ dispute resolution clause. Thereafter, the Tripartite Agreement executed on 26th July, 2017 contained a further arbitration clause. While the arbitration clause in the Tripartite Agreement is silent with regard to the jurisdiction, the MLA mentions "Zonal Railway HQ" to be having exclusive jurisdiction for dispute resolution in all matters arising out of the MLA.
Further, it is also submitted by ld. Counsel for IRCTC that invocation of arbitration was only in respect of IRCTC and not the Union of India.
7. Mr. Rao, ld. Counsel for the Petitioner pointed out that the IRCTC's Zonal HQ is located in Delhi and the Tripartite Agreement had substituted the MLA.
This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 31/05/2024 at 21:53:49
8. The Court has considered the matter. The clauses in the MLA is as under:
"21.4 Jurisdiction This Agreement will be governed by and construed in accordance with the laws of the Republic of India and the Courts at [*] (Zonal Railway HQ) shall have exclusive jurisdiction in all matters relating to this Agreement. xxx xxx xxx 21.8 Notice All notices under this Agreement by either party will be in writing and will be deemed to have been duly given if delivered by courier/registered AD Post. All notices under this Agreement are to be addressed as under: In the case of Railway:
Chief Commercial Manager, Northern Railway Headquarter office, Baroda House, New Delhi-110001.
In the case of Licensee:
Mr. Parth Singh M/s. Ambuj Hotel & Real Estate (P) Ltd. D.58/9-A, Sigra, Varanasi.221010 Any change in the aforesaid address of either party shall be immediately informed to the other party by way of a notice as aforesaid."
The clauses in the Tripartite Agreement for dispute resolution is as under:
"8.9 In case of any dispute the matter shall be referred for Arbitration to a Sole Arbitrator to be appointed as per This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 31/05/2024 at 21:53:49 Arbitration & Conciliation Act, 1966 as amended from time to time."
9. A perusal of the above would show that this Court would have jurisdiction to appoint the Arbitrator considering that the IRCTC itself is based in Delhi, the Zonal Headquarters is in Delhi and Courts in Delhi also have jurisdiction.
10. Accordingly, Justice Dinesh Kumar Singh (Retd.), (M:
9431015011) is appointed as the sole Arbitrator to adjudicate upon the disputes between the parties. The arbitration shall take place under the aegis of Delhi International Arbitration Centre (hereinafter, 'DIAC'). The fee of the ld. Sole Arbitrator shall be paid in terms of the Fourth Schedule of the Act as amended by DIAC Rules, 2023. Let a copy of the present order be emailed to Secretary, DIAC on email id-
[email protected].
11. The petition is disposed of. All pending applications are accordingly disposed of."
15.This court finds no reason to dissent from the findings of the co-ordinate bench of this court. Perusal of the clause in the MLA and tripartite agreement indicated that this court would have the jurisdiction to appoint the arbitrator considering that the IRCTC itself is based in Delhi, the Zonal Headquarters is in Delhi and Courts in Delhi also have jurisdiction. This court finds no reason to differ from the decision of the coordinate bench.
16.In view of the above, the present petitions are disposed of with following directions:
This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 31/05/2024 at 21:53:49 a. Justice Dinesh Kumar Singh (Retd), (Mobile: 9431015011), is appointed as a sole arbitrator to adjudicate upon the disputes in between parties.
b. The arbitration will be held under the aegis of the Delhi International Arbitration Centre, Delhi High Court, Sher Shah Road, New Delhi hereinafter, referred to as the 'DIAC') or as agreed, between the parties. The remuneration of the learned Arbitrator shall be in terms of fee Schedule of DIAC or as the parties may agree. c. The learned Arbitrator is requested to furnish a declaration in terms of Section 12 of the Act prior to entering the reference. d. It is made clear that all the rights and contentions of the parties, including as to the arbitrability of any of the claim, any other preliminary objection, as well as claims on merits of the dispute of either of the parties, are left open for adjudication by the learned arbitrator.
e. The parties shall approach the learned arbitrator within two weeks from today.
DINESH KUMAR SHARMA, J MAY 16, 2024 Pallavi This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 31/05/2024 at 21:53:49