Karnataka High Court
Arvind Eshwarlal vs Plivo Communications Pvt Ltd on 4 January, 2024
Author: P.S.Dinesh Kumar
Bench: P.S.Dinesh Kumar
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NC: 2024:KHC:537-DB
WP No. 26261 of 2023
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 4TH DAY OF JANUARY, 2024
PRESENT
THE HON'BLE MR JUSTICE P.S.DINESH KUMAR
AND
THE HON'BLE MR JUSTICE T.G. SHIVASHANKARE GOWDA
WRIT PETITION NO. 26261 OF 2023 (GM-RES)
BETWEEN:
ARVIND ESHWARLAL
S/O MR. E. ESHWARLAL
AGE ABOUT 46 YEARS
RESIDING AT
106, RAHEJA MANSION
Digitally signed
by YASHODHA N 13 MILTON STREET, COOK TOWN
BANGALORE-560 005. ...PETITIONER
Location: HIGH
COURT OF
KARNATAKA (BY SHRI. A.M. SHODHAN BABU, ADVOCATE)
AND:
PLIVO COMMUNICATIONS PVT LTD.
A PRIVATE LIMITED COMPANY
HAVING ITS REGISTERED OFFICE AT
2ND FLOOR, BLOCK B, EAST WING
77, TOWN CENTRE, VARTHUR HOBLI
BANGALORE EAST TALUK
BANGALORE-560 037.
REPRESENTED BY ITS DIRECTOR AND CEO
MR. VENKATESH BALASUBRAMANIAM ...RESPONDENT
(BY SHRI. PRADEEP KUMAR NAYAK, ADVOCATE FOR C/R1)
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NC: 2024:KHC:537-DB
WP No. 26261 of 2023
THIS WRIT PETITION IS FILED UNDER ARTICLE 227 OF THE
CONSTITUTION OF INDIA, PRAYING TO ISSUE A WRIT, ORDER OR
DIRECTION, MORE IN THE NATURE OF WRIT OF CERTIORARI, AND
QUASH THE IMPUGNED ORDER DATED 30/10/2023 (ANNEXURE-A),
PASSED BY THE LEARNED ARBITRAL TRIBUNAL, IN AC 434/2022,
CONSEQUENTLY, ALLOW THE APPLICATION DATED 21/08/2023
(ANNEXURE-J), FILED BY THE PETITIONER HEREIN, UNDER SECTION
16 OF THE ARBITRATION AND CONCILIATION ACT, 1996 AND PASS
ANY SUCH ORDER(s) AS MAY BE DEEMED PROPER AND EXPEDIENT IN
THE CIRCUMSTANCES OF THE CASE.
THIS WRIT PETITION COMING ON FOR PRELIMINARY HEARING,
THIS DAY, P.S.DINESH KUMAR, J., MADE THE FOLLOWING:
ORDER
This writ petition is filed seeking a writ of certiorari and to quash the order dated 30.10.2023 on the application filed under section 16 of The Arbitration and Conciliation Act, 19961 in AC No.434/2022 passed by Shri V.Jagannathan, Sole Arbitrator.
2. Heard Shri A.M.Shodhan Babu, learned advocate for petitioner and Shri Pradeep Kumar Nayak, learned advocate for caveator/respondent No.1.
3. Shri Shodhan Babu submitted that petitioner was an employee with the respondent. He was illegally terminated from service. He had also entered into 1 'Act' for short -3- NC: 2024:KHC:537-DB WP No. 26261 of 2023 non-disclosure agreement2. The NDA contains an arbitration clause. Petitioner has filled O.S.No.3440/2022 on the file of the City Civil Judge, Bangalore, for damages and to set aside the notice of termination. Respondent has initiated arbitration proceedings invoking the arbitration clause in the non-disclosure agreement. Whilst the matter was under
consideration before the Hon'ble Single Judge in CMP No.171/2020, petitioner had raised an objection with regard to maintainability. This Court while appointing Hon'ble Justice Shri V.Jagannathan (Retired) as the sole Arbitrator, has kept open rival contentions of both parties including maintainability, arbitrability, jurisdiction, limitation, stamp duty etc., as mentioned in the direction clause-(iii) of the order dated 21.07.2022, to be decided by the Arbitral Tribunal. Pursuant thereto, Sole Arbitrator has considered the maintainability and has recorded thus.
"To sum up, based on the arbitration clause in the NDA and subsequent order of the Hon'ble High court in CMP 171/2020, appointing this Tribunal to adjudicate upon the dispute between the parties, merely because there is likelihood of overlapping of certain issues, that is not a 2 'NDA' for short -4- NC: 2024:KHC:537-DB WP No. 26261 of 2023 ground to hold that the present subject matter is non-arbitrable. The Respondent having consented to the appointment of arbitrator before the Hon'ble Court, long before the suits being filed by the Respondent, cannot now seek to turn the back only because of his instituting the 2 suits after the initiation of the arbitral proceedings by the Claimant. The dispute before this Tribunal is therefore an arbitrable dispute and the question raised above is answered in the affirmative and consequently the question of this Tribunal having no jurisdiction to entertain the dispute cannot arise in law. Hence, the following:
ORDER The application filed under Section 16 of the Arbitration & Conciliation Act, 1996 by the Respondent is rejected."
4. The petitioner's Principal contention is that issue in O.S.No.3440/2022 as also before the Arbitral Tribunal are substantially the same as the reason for termination is that the petitioner had violated the NDA. Therefore, separate arbitration proceedings under the NDA could not have been initiated by the respondent.
5. Shri Pradeep Kumar Nayak, learned advocate for the caveator/respondent No.1 submitted that this writ petition is not maintainable in view of Section 16(6) -5- NC: 2024:KHC:537-DB WP No. 26261 of 2023 of the Act. If any party is aggrieved by the award he can file an application under Section 34 of the Act.
6. We have carefully considered rival submissions and perused the records.
7. Section 16 of the Arbitration Act reads as thus:
"Competence of arbitral tribunal to rule on its jurisdiction.
(1) The arbitral tribunal may rule on its own jurisdiction, including ruling on any objections with respect to the existence or validity of the arbitration agreement, and for that purpose,--
(a) an arbitration clause which forms part of a contract shall be treated as an agreement independent of the other terms of the contract; and
(b) a decision by the arbitral tribunal that the contract is null and void shall not entail ipso jure the invalidity of the arbitration clause.
(2) A plea that the arbitral tribunal does not have jurisdiction shall be raised not later than the submission of the statement of defence; however, a party shall not be precluded from raising such a plea merely because that he has appointed, or participated in the appointment of, an arbitrator.
(3) A plea that the arbitral tribunal is exceeding the scope of its authority shall be raised as soon as the matter alleged to be beyond the scope of its authority is raised during the arbitral proceedings.
(4) The arbitral tribunal may, in either of the cases referred to in sub-section (2) or sub-section (3), admit a later plea if it considers the delay justified.-6-
NC: 2024:KHC:537-DB WP No. 26261 of 2023 (5) The arbitral tribunal shall decide on a plea referred to in sub-section (2) or sub-section (3) and, where the arbitral tribunal takes a decision rejecting the plea, continue with the arbitral proceedings and make an arbitral award. (6) A party aggrieved by such an arbitral award may make an application for setting aside such an arbitral award in accordance with section 34."
(Emphasis Supplied)
8. Shri Pradeep is right in his submission that party aggrieved by such an arbitral award can make application under Section 34 of the Arbitration Act. In view of the said unambiguous position in law, we refuse to exercise jurisdiction under Article 226 of the Constitution of India.
9. Resultantly, this petition must fail and it is accordingly dismissed.
No costs.
Sd/-
JUDGE Sd/-
JUDGE