Delhi District Court
M/S Online Micro Services Pvt. Ltd vs Spanco Bpo Services Limited on 26 July, 2013
IN THE COURT OF SH. SONU AGNIHOTRI,
ADDL. SENIOR CIVIL JUDGE-CUM-JUDGE SMALL CAUSE
COURT-CUM-GUARDIAN JUDGE,
DISTRICT: SOUTH, NEW DELHI.
CS NO. 358/12
UNIQUE ID NO. 02406C0232682012
M/S ONLINE MICRO SERVICES PVT. LTD.
Registered office at:
546, Chirag Delhi,
New Delhi-110017.
Through its director
Mr. Irfan Baig. ........... Plaintiff.
Vs.
SPANCO BPO SERVICES LIMITED
96/97, Neel Tower,
Udyog Vihar, Phase-IV,
Gurgaon (Haryana)- 12205.
Registered Office at:
Spanco BPO Services Limited,
B-22, Krishna Bhavan,
B.S. Deoshi Marg,
Deonar, Mumbai-400088. .........Defendant.
DATE OF INSTITUTION : 17.09.2012
DATE OF RESERVING ORDER : 01.06.2013
DATE OF PRONOUNCEMENT : 26.07.2013
CS No. 358/12 Page No. 1 of 9
O R D E R
(26.07.2013) Vide this order, I shall dispose of application filed on behalf of defendant under Section 8 of Arbitration and Conciliation Act, 1996.
1. In the application, it is stated that purchase order issued by defendant bears an arbitration clause under which it has been decided by the parties to refer the matter to arbitrator in case of a dispute between parties. It is stated that agreement clearly shows that parties should approach settlement through Court of an Arbitrator. It has been prayed to dismiss suit filed by plaintiff and to allow present application and refer the matter before Court of Arbitrator.
2. Reply to the application was filed by plaintiff. Certain preliminary objections were taken by plaintiff. It is stated that relief claimed by defendant in the present suit is not covered by Arbitration Clause. It is stated that defendant after service took time to file WS in the present matter and from this act of defendant, it is clear that defendant abandoned the alleged arbitration clause and indicated his desire to proceed with present suit. It is stated that hence the alleged arbitration clause has no bearing in the present suit. It is stated that application filed by defendant is not maintainable as defendant has not CS No. 358/12 Page No. 2 of 9 raised this issue at the time of receiving e-mail and legal notice. It is stated that it is an afterthought on part of defendant to delay payment of plaintiff. It is stated that plaintiff made efforts to resolve the dispute before coming to the Court but to no avail.
3. On reply on merits, it has been denied that purchase order issued by defendant bears arbitration clause.
4. Plaintiff has prayed for dismissal of application of defendant with compensatory costs.
5. I have heard arguments addressed by respective counsels and perused the record including judgments filed on behalf of both the parties.
6. Section 8 of Arbitration and Conciliation Act, 1996 provides as under:
8. Power to refer parties to arbitration where there is an arbitration agreement--
(1) A judicial authority before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party so applies not later than CS No. 358/12 Page No. 3 of 9 when submitting his first statement on the substance of the dispute, refer the parties to arbitration.
(2) The application referred to in sub-section (1) shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof.
(3) Notwithstanding that an application has been made under sub-section (1) and that the issue is pending before the judicial authority, an arbitration may be commenced or continued and arbitral award made.
7. The necessary requisite before a matter can be referred for Arbitration as per Section 8 of Arbitration and Conciliation Act, 1996 is that a party should apply to Court in this regard not later than when submitting his first statement on the substance of the dispute. The other requirement for referring a matter for arbitration under Section 8 of Arbitration and Conciliation Act, 1996 is that application for referring matter to arbitration should be accompanied by original arbitration agreement or duly certified copy thereof.
Judgment in case titled as "Arti Jethani Vs. Daehsan Trading (India) Pvt. Ltd. & Ors. 180 (2011) DLT 511" has been filed by plaintiff. In this judgment, Hon'ble High Court of Delhi CS No. 358/12 Page No. 4 of 9 has held that "Mere disclosure of arbitration agreement in the Written Statement and claiming that Civil Court has no jurisdiction to try the suit would be of no consequences unless the Written Statement itself contains a prayer for referring the dispute for arbitration."
Judgment in case titled as "Jagdish Chander Vs. Ramesh Chander & Ors. JT 2007 (6) SC 375" has been filed by plaintiff. In this case Hon'ble Supreme Court of India has held that "The intention of parties to enter into an arbitration agreement shall have to be gathered from the terms of the agreement. If the terms of the agreement clearly indicate an intention on the part of parties to the agreement to refer their disputes to a private tribunal for adjudication and an willingness to be bound by the decision of such tribunal on such disputes, it is arbitration agreement."
One more judgment in case titled as "Bihar State Mineral Dev. Corpn. & Anr. Vs. Econ Builders (I) Pvt. Ltd. JT 2003 (7) SC 605" has been filed by plaintiff. In this case, Hon'ble Apex Court has held that "essential elements of an arbitration agreement are as follows: (1) There must be a present or a future difference in connection with some contemplated affair. (2) There must be the intention of parties to CS No. 358/12 Page No. 5 of 9 settle such difference by a private tribunal. (3) The parties must agree in writing to be bound by the decision of such tribunal. (4) The parties must be ad idem."
8. Now let me test facts of present case vis a vis provisions of Section 8 of Arbitration and Conciliation Act, 1996 and ratio of judgments as mentioned above and filed by plaintiff. Firstly, in WS filed by defendant, defendant has mentioned that as per agreement between parties, there is arbitration clause in which parties have agreed to go for arbitration in case of any dispute. Defendant in WS has stated that defendant is filing separate application to refer the matter for arbitration. In this case, first statement on the substance of dispute has been filed by defendant in form of WS. Application for referring the matter to Arbitration under Section 8 of Arbitration and Conciliation Act, 1996 has been filed by defendant alongwith WS and the same finds mention in WS filed by defendant. Application under Section 8 of Arbitration and Conciliation Act in present matter has been filed simultaneously by defendant alongwith WS. It cannot be said that present application has been filed by defendant after submission of first statement on substance of dispute rather filing of application simultaneously alongwith WS and mention of this fact in WS meets criteria as laid down under Section 8(1) of Arbitration and Conciliation Act, 1996 which CS No. 358/12 Page No. 6 of 9 provides that party should apply for referring matter to arbitration not later than submission of first statement. Second requirement of Section 8 of Arbitration and Conciliation Act, 1996 is that application under sub-Section (1) should be accompanied by original arbitration agreement or duly certified copy thereof. Defendant alongwith present application has filed certified copy of purchase/work order and terms and conditions. Terms and conditions at Serial No. 17 contains arbitration clause as per which to best of their abilities, the parties hereto shall try and endeavour to settle and clarify all disputes arising in connection with the order by discussions and with the intention to resolve the matter amicably. Plaintiff itself has filed attested true copies of purchase orders and terms and conditions. Accordingly this requirement of Section 8(2) of Arbitration and Conciliation Act, 1996 also stands fulfilled in present matter.
9. Perusal of purchase orders and terms and conditions filed by plaintiff with plaint shows that the same has also been signed by defendant meaning thereby parties are ad idem and clause 17 of terms and conditions contemplate future difference in connection with contemplated affairs and intention of parties to settle such difference by discussion and amicably also finds mention in clause 17 of terms and conditions. The use of word shall in clause 17 indicates that parties intend to bound by CS No. 358/12 Page No. 7 of 9 decision of arbitrator. In view of this, elements of an arbitration agreement as per ratio laid down in Bihar State Mineral Dev. Corpn. & Anr. (Supra) are met out. The use of word shall in clause 17 of terms and conditions as agreed to by parties also indicate that it is not merely an enabling provision in the present matter but parties have agreed to resolve their disputes through arbitration [in consonance with ratio in Jagdish Chander's case (supra)].
10. In view of reply given by plaintiff to present application of defendant, it is evident that as such plaintiff is not disputing that there is an arbitration clause agreed to by parties in case of dispute between parties. Defence taken by plaintiff is that defendant by his conduct has abandoned the alleged arbitration clause. Arbitration clause not specifically denied by plaintiff in its reply to present application (though in reply to para no. 2 on merits, the same has been denied but the same seems to be admitted in view of preliminary objections taken by plaintiff in its reply) and in view of my discussion made in various preceding paras, I am of the opinion that present matter is squarely covered under provisions of Section 8 of Arbitration and Conciliation Act, 1996 and is liable to be referred to arbitration. Accordingly, application of defendant is allowed. Parties are directed to appoint an arbitrator and carry out arbitration CS No. 358/12 Page No. 8 of 9 proceedings. This Court in view of allowing application of defendant does not have any jurisdiction to try present matter. Accordingly, suit filed by plaintiff is dismissed being without jurisdiction. No order as to costs.
File be consigned to Record Room.
Announced in open Court on 26.07.2013 Sonu Agnihotri JSCC-cum-ASCJ-cum-GJ South District, Saket Courts, New Delhi.
CS No. 358/12 Page No. 9 of 9