Madras High Court
M/S.Pga Trading And Services Private ... vs M/S.Marg Limited on 1 November, 2021
Author: N. Sathish Kumar
Bench: N. Sathish Kumar
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Dated 01.11.2021
CORAM:
THE HONOURABLE MR.JUSTICE N. SATHISH KUMAR
Arb.O.P.(COM.DIV.)No. 147 of 2021
M/s.PGA Trading and Services Private Limited
Represented by Venkata Sheshan
Having office at No.637,
Third Floor, Dr S P Road, 3rd Stage,
3rd Block Basaveshwara Nagara,
Bangalore 560 079,
Karnataka . . . Petitioner
Versus
M/s.Marg Limited
Represented by its Managing Director,
#392 & 393
Rajiv Gandhi Salai,
3rd Floor, Anjali Building,
Kottivakkam,
Chennai – 600 041 .....Respondent
PRAYER : Petition filed under Section 11 of the Arbitration and Conciliation
Act, 1996 to appoint an Independent and impartial Arbitrator/Arbitrators to
adjudicate, settle and resolve the disputes between the petitioner and the
respondents arising out of the Purchase order MARG/HAL/14 dated 01.07.2015.
For Petitioner : Mr.K.M.Anand
For Respondent : Mr.S.Harishkumar for
Mr.B.Ramanakumar
https://www.mhc.tn.gov.in/judis
Page 1/7
ORDER
This original petition has been filed to appoint an Independent and impartial
Arbitrator/Arbitrators to adjudicate, settle and resolve the disputes between the
petitioner and the respondent arising out of the Purchase order MARG/HAL/14
dated 01.07.2015.
2. As dispute arose in the Purchase Order dated 01.07.2015 entered between
the parties, this petition has been filed for appointment of a Sole Arbitrator.
The parties are governed by the Purchase Order and Clause 32 of Purchase Order
provides for reference to the Arbitrator. Clause 32 of Purchase Order dated
01.07.2015 reads as follows:-
32.Arbitration:
All disputes, doubts, differences claims
(whether admitted or not) arising out of or in relation
to this Purchase order (whether before or after its
expiry or termination) shall be referred to arbitration
within six months from the date on which such
disputes, doubts, differences, claims arose or shall be
deemed to have been arisen and shall be decided by a
sole Arbitrator to be appointed mutually by both the
parties. The Provisions of the Arbitration and
Conciliation Act of 1996 shall apply; the place of
arbitration shall be Chennai only.
https://www.mhc.tn.gov.in/judis
Page 2/7
3. The above clause indicates that the dispute shall be referred to the
Arbitrator within a period of 6 months from the date of dispute deemed to have
been arisen between the parties and the same shall be adjudicated by a Sole
Arbitrator appointed mutually by both the parties. It is not disputed that the
parties are borne by the above clause, but the only contention of the learned
counsel for the respondent is that the dispute arose in the year 2017, whereas,
legal notice invoking the arbitration was issued on 27.01.2020. Hence, it is his
contention that they are not able to track whether they received
the notice in time within a period of 3 years. Therefore, his contention is that
Section 21 of the Arbitration and Conciliation Act relating to the commencement
of the arbitration proceedings states that “unless otherwise agreed by the parties,
the arbitral proceedings in respect of a particular dispute commence on the date
on which a request for that dispute to be referred to arbitration is received by the
respondent”. Hence, there is no evidence to show the date of receipt of notice
and it cannot be said that arbitration has been invoked within a period of three
years. Hence, it is his further contention that even the arbitration clause itself
provides reference for arbitration within 6 months, which is not been done in this
case. Hence, the arbitration cannot be initiated and barred by limitation.
https://www.mhc.tn.gov.in/judis
Page 3/7
4. This Court has perused the entire materials available on record.
5. On considering the first submission of the learned counsel that the
arbitration have to be initiated within a period of 6 months from the date of
dispute arisen between the parties, this Court is of the view that the restricting
time limit or taking away the statutory right which is otherwise bad in law.
Such contract is not enforceable, in fact, such contract is restricting the period of
initiating the arbitration as per law. It is void and cannot be enforced. Therefore,
the first contention that the arbitration has to be initiated within 6 months has no
legs to stand.
6. The second contention is that there is no evidence to show the date of
receipt of notice of invocation of arbitration, whereas, the time period has already
expired. It cannot be countenanced for the simple reason that the time period
required for invocation of arbitration is 3 years as per law. The dispute arose on
03.02.2017 and the notice of invocation was issued on 27.01.2020 within a period
of three years. Such being the position it cannot be said that unless the notice is
received, there will not be any limitation. Such contention if accepted, it will take
away the rights of the parties. Hence, the above contention are rejected.
https://www.mhc.tn.gov.in/judis
Page 4/7
7. The purchase order provides for reference to arbitration, and notice of
invocation is issued within a period of three years. Having gone through Clause
32 of Purchase Order, this Court is inclined to appoint Mr.Justice P.Shanmugam
Judge[Retd.], High Court as an Arbitrator, to arbitrate the disputes between the
parties.
8. Accordingly, this Arbitration Original Petition is ordered as follows:
i) that Mr.Justice P.Shanmugam Judge[Retd.],
High Court residing at No.204, (288/B), TTK road,
Parthasarathy Garden, Teynampet, Chennai-600 118.
Mobile No: 9444373369 is appointed as a Sole Arbitrator to
enter upon reference and adjudicate the matter.
ii] The learned sole Arbitrator appointed herein, shall
after issuing notice to the parties and upon hearing them,
pass an award as expeditiously as possible, preferably within
a period of six months from the date of receipt of the Order.
iii] The learned sole Arbitrator appointed herein shall
be paid fees and other incidental charges, fixed by him and
the same shall be borne by the parties equally.
https://www.mhc.tn.gov.in/judis
Page 5/7
9. This Arbitration Original Petition is ordered accordingly, leaving the
parties to bear their own costs.
01.11.2021
(½)
msv
To
Mr.Justice P.Shanmugam Judge[Retd.],
High Court
No.204, (288/B), TTK road,
Parthasarathy Garden,
Teynampet, Chennai-600 118.
Mobile No: 9444373369
N. SATHISH KUMAR, J.
msv https://www.mhc.tn.gov.in/judis Page 6/7 Arb.O.P.(COM.DIV.)No. 147 of 2021 01.11.2021 https://www.mhc.tn.gov.in/judis Page 7/7