Calcutta High Court
Gmb Ceramics Limited vs Neycer India Limited on 28 August, 2000
Equivalent citations: (2002)1CALLT150(HC), 2001(1)CHN28
Author: Pinaki Chandra Ghose
Bench: Pinaki Chandra Ghose
JUDGMENT
The Court
1. This is an application filed under Section 14(2) of the Arbitration Act, 1940 inter alia for an order directing the learned umpire to file his award dated June 23, 1999 and further praying for an injunction restraining the respondent, its servants, agents and assigns from filing the said award dated June 23, 1999 or causing the same to be filed with regard thereto in any Court other than this Hon'ble Court.
2. The facts of the case briefly are as follows :-
The petitioner for the purpose of setting up the factory for manufacture and production of the vitreous and sanitary were products applied and obtained term loan and financial assistance from the Industrial Finance Corporation of India in consortium with IDBI and ICICI (hereinafter referred to as the Financial Institutions) inter alia, on the terms and conditions contained in the respective agreements entered into between the parties. The respondent agreed to impart to the petitioner technical know how and expertise Including manufacturing process, engineering data, consumption norms, fire-cycles, utility requirements and all such information necessary for the purpose of establishment and setting up and depute and retain at site expert technician for manufacture and production of vitreous sanitary ware manufacturing unit at the factory of the petitioner at Balasore, State of Orissa for consideration and inter alia on the terms and conditions contained in a Deed of Collaboration agreement dated November 29, 1986. The said Deed of Collaboration agreement was modified and varied in the manner and to the extent mentioned in the Deed of Amendment dated June 26, 1987 between the petitioner and the respondent. The said Deed of Collaboration Agreement as amended hereafter referred to as said contract. The said contract contains an Arbitration Clause. The said Arbitration Clause is set out hereunder :-
"24. ARBITRATION All disputes arising out of or in connection with this agreement shall be settled by arbitration in accordance with the provisions of the Indian Arbitration Act of 1940. Each party shall nominate an arbitrator for and on their behalf and the said two arbitrators shall select an umpire before they enter upon their reference to arbitration. The unanimous opinion of the two arbitrators and where they differ, the decision of the umpire thereon shall be final and binding on the parties hereto. The City Civil Court, Madras, shall be the only Court which shall have jurisdiction to enforce the Arbitration Award obtained under this Clause."
3. According to the petitioner, the respondent failed, neglected, refused and/or delay to impart expertise, technical know how, depute technical and supervisory personnel and perform its obligations under the said Contract. By reason of the premises, the petitioner suffered loss and damages inasmuch as the respondent failed and neglected to perform its obligation under the said contract. In these circumstances, disputes and differences arose between the parties and the arbitrators were appointed in terms of the said arbitration agreement.
4. The arbitrators duly entered reference, thereafter the respondent filed an application for removal of one of the arbitrators Shri O.P. Jhunjhunwala, advocate, at the Madras High Court The said application was dismissed by an order dated 22nd March, 1991 on the ground that the Madras High Court did not have the jurisdiction to entertain the said application.
5. The petitioner filed an application under Section 41 of the Arbitration Act, 1940 in this Hon'ble Court. The said application was opposed by the respondent on the ground that this Hon'ble Court did not have the jurisdiction. However, this Hon'ble Court has held that this Hon'ble Court had jurisdiction to determine the said application. Thereafter, the respondent filed a Special Leave Petition before the Hon'ble Court which was disposed of by the Supreme Court only challenging the Arbitrator Shri O.P. Jhunjhunwala and in his place and stead appointed Shri S. Tibrewal as the Arbitrator. Such order was passed by the consent of the parties. Thereafter, learned arbitrators appointed Shri Y.B. Chandrachud, former Chief Justice of India, as the Umpire, Thereafter, Shri E.S. Venkataramiah was appointed as Umpire and on the demise of Shri E.S. Venkataramlah pursuant to an order passed by this Hon'ble Court, Shri M.M. Dutta was appointed as learned Umpire in terms of the order passed by this Hon'ble Court. The said learned Umpire has published his award on 23rd June, 1999 and hence this application has been filed by the petitioner on the question that whether the learned Umpire can file his award before this Court. The point which has been raised in this application and taken by the respondent that this Hon'ble Court has no jurisdiction to entertain this application.
6. Mr. Bachawat appearing on behalf of the petitioner contended that by two earlier judgments delivered by this Court, this Hon'ble Court under Section 31(4) of the said Act, has exclusive jurisdiction. On March 13, 1992 His Lordship P.K. Majumder, J. was pleased to deliver a judgment being matter No. 836 of 1990 (G.M.B. Ceramics Ltd. v. Neiveli Ceramics and Refractories Ltd).
7. In the said application it appears that a point was taken in view of the forum selection Clause contained in the said Agreement entered into between the parties, this Hon'ble Court should not entertain this application. It further appears that the forum the parties agreed to as follows:- "The City Civil Court, Madras shall be the only Court which shall have jurisdiction to enforce the Arbitration award obtained under this Clause."
8. According to the respondent, in the said application the point was taken that the award in the pending reference in terms of the forum selection Clause can only be filed in the City Civil Court, Madras, which shall have the jurisdiction to enforce the arbitration award as such, the application in the pending reference, should also be filed in the City Civil Court, Madras and also be disposed of by the Hon'ble Court. Such application was filed in connection with the agreement in respect of this application.
9. Mr. Bachawat further submitted that his Lordship was pleased to hold as follows :--
"... Be that as it may, it appears to me that forum selection clause is an agreement between the parties, such selection as to forum may be waived by the party who was take benefit of such forum selection. According to the clause relating to forum, the City Civil Court, Madras shall be the only Court which shall have jurisdiction to enforce the arbitration award obtained under this Clause. It has been pointed out on behalf of the petitioner and has not been disputed by the respondent that the respondent made two several applications before the High Court at Madras one for revocation of the authority of the Arbitrator and the other for an order of injunction restraining the arbitrators from proceed-
ing with the reference. It also appears that the said application for revocation of the authority of the Arbitrator was made invoking the jurisdiction of the Madras High Court on the basis of Section 2(c) of the Arbitration Act, 1940. If the forum selection as agreed to by the parties is adhered to then the proper forum according to the agreement of the parties should be City Civil Court, Madras and not the Madras High Court. It, therefore, appears to me that the respondent by instituting an application in the Madras High Court ignoring the forum selected by the parties had also waived such forum selection clause."
10. In view of such waiver His Lordship held that this Hon'ble Court is competent and has jurisdiction to entertain the said application and has disposed of the same. His Lordship specifically held in the said application that this Hon'ble Court is competent to entertain this application and has jurisdiction to dispose of the same.
11. In a subsequent judgment between the said parties Mr. Bachawat also drew my attention to a judgment dated February 11, 1998 passed by His Lordship Amitava Lala, J. in A.P. No. 370 of 1997 (G.M.B. Ceramics Limited v. Neycer India Limited) and drew my attention to the said judgment and His Lordship was pleased to deliver the judgment and the said application was filed under section 8 of the Arbitration Act, 1940 whereby the petitioner wanted to fill up the vacancy of the Umpire due to the death of E.S. Venkataramalah, former Chief Justice of India, erstwhile Umpire in respect of the arbitration proceedings between the parties. His Lordship was pleased to hold that this Court has jurisdiction and did appoint M. M. Dutta, a retired Judge of Hon'ble Supreme Court of India, as an Umpire to act in place and stead of E.S. Venkataramalah.
12. Mr. Bachawat also drew my attention to the judgment delivered by Madras High Court dated March 22, 1991 and submitted that the Madras High Court has held that the Madras High Court has not any jurisdiction to entertain this application. Mr. Bachawat relied upon a judgment (Kumbha Mawji v. Union of India) where the Supreme Court has held in Kumbha Mawaji's case that Section 31(4) of the Arbitration Act. 1940 covers not only the application made before the award, but also after the award i.e. application for filing the award in Court.
13. Mr. Bachawat further contended that no appeal was preferred against the judgment dated March 13, 1993 and further the Special Leave Petition which was filed against the order passed by His Lordship Amitava Lala, J. on February 11, 1998, was dismissed.
14. He further contended that pursuant to and in terms of the order passed by this Hon'ble Court, learned Umpire entered upon the reference and heard the parties. Respondent duly participated in the proceedings and did not raise any objection whatsoever. Learned Umpire made and published his award on June 23, 1999.
15. He further submitted that under Section 31(4) of the Arbitration Act this Hon'ble Court has exclusive jurisdiction to entertain the present application. He drew my attention to Section 31(4) of the said Act which runs as follows-:--
"Section 31(4), Notwithstanding anything contained elsewhere in this Act or in any other law for the time being in force, where in any reference any application under this Act has been made in a Court competent to entertain it, that Court alone shall have jurisdiction over the arbitration proceedings and all subsequent applications arising out of that reference and the arbitration proceedings shall be made in that Court and in no other Court."
16. In view of these facts Mr. Bachawat submitted that this Hon'ble Court has jurisdiction to entertain this application and pleased to direct the learned Umpire to file the award before this Court.
17. Mr. Chatterjee appearing on behalf of the respondent submitted that the Hon'ble Supreme Court reversed the decision of the Hon'ble Madras High Court and replaced the personnel of the Arbitrator and thereby upholding the contention of the respondent that the Madras High Court alone has the jurisdiction to entertain the application.
18. He further submitted that only the Hon'ble Supreme Court of India has the jurisdiction where In view of the fact that the learned Arbitrator was appointed by the Supreme Court of India. In these circumstances he submitted that this Hon'ble Court has no jurisdiction to entertain this application.
19. After considering the facts and circumstances of this case, it appears that:--
(a) By the judgment delivered by His Lordship P.K. Majumdar, J. on March 13, 1992 it is specifically mentioned that the respondent have waived their rights by filing the application before the Madras High Court. The said judgment was not appeal from by the respondent.
(b) The second judgment which was delivered by this Hon'ble Court on February 11, 1998 by appointing the learned Umpire although was challenged before the Hon'ble Supreme Court of India by way of Special Leave Petition and has been dismissed by the Hon'ble Supreme Court which is specifically mentioned that this Hon'ble Court has jurisdiction to entertain the application for appointment of the Umpire.
20. It further appears that the Madras High Court was pleased to dismiss the application holding that the said High Court has no jurisdiction to entertain the application of the respondent. The respondent filed Special Leave Petition before the Supreme Court of India. Hon'ble Supreme Court was pleased to dismiss the same, but by consent of the parties only one of the learned Arbitrators was replaced by another Arbitrator, that too by consent of the parties. Therefore there is no significance in the order which has been passed by the Hon'ble Supreme Court or can be sought to be held that the Judgment of the Hon'ble Madras High Court was reversed by the Hon'ble Supreme Court in passing such order.
21. Section 31 Sub-section 4 of the Act which has already reproduced hereinbefore is unambiguous and it is clear that the Court which has jurisdiction to appoint an Umpire, has the jurisdiction subsequent thereto. It further appears that the Hon'ble Supreme Court in "Kumbha Mawji's case" held that Section 31(4) of the said Act covers not only the application made before the Award, but also after the Award i.e. the application for filing the Award in Court. Therefore, there cannot be any reason to hold this Court has no jurisdiction and accordingly I hold that this Hon'ble Court has jurisdiction and I allow this application and pass an order in terms of prayer (a) and with a request to the learned Umpire to file his award which has been published by him on June 23, 1999 in this Hon'ble Court, preferably within four weeks from the date of this order.
For the reasons stated hereinabove this application is thus disposed of.