Delhi High Court - Orders
The South Indian Bank Ltd vs Transstroy Trichy Karaikudi Tollways ... on 22 December, 2021
Author: Vibhu Bakhru
Bench: Vibhu Bakhru
$~3 (2021)
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ ARB.P. 867/2021
THE SOUTH INDIAN BANK LTD. ..... Petitioner
Through: Mr Sujoy Kumar, Mr Krishna Vijay
Singh, Mr Manish Dembla and Mr
Pradyuman Sewar, Advocates.
versus
TRANSSTROY TRICHY KARAIKUDI TOLLWAYS
PVT. LTD. & ANR . ..... Respondents
Through: Mr Suvir Sharma and Mr Prakhar
Khanna, Advocates.
CORAM:
HON'BLE MR. JUSTICE VIBHU BAKHRU
ORDER
% 22.12.2021
1. The petitioner has filed the present petition under Section 11 of the Arbitration and Conciliation Act, 1996 (hereafter the 'A&C Act') praying that an arbitrator be appointed by this Court on behalf of respondent no.1 in order for the Arbitral Tribunal to be constituted for adjudication of the disputes that have arisen between the parties in connection with the Escrow Agreement and Substitution Agreement.
2. Both the aforesaid agreements contain an Arbitration Clause. The Arbitration Clause as included in the Escrow Agreement is set out below:
"10 DISPUTE RESOLUTION 10.1 Dispute resolution 10.1.1. Any dispute, difference or claim arising out of or in connection with this Agreement, which is not resolved amicably, shall be decided finally by reference to arbitration to a Board of Arbitrators comprising of one nominee each of Signature Not Verified Digitally Signed By:DUSHYANT RAWAL each Party to the dispute, and where the number of such nominees is an even number, the nominees shall elect another person to such Board. Such arbitration shall be held in accordance with the Rules of Arbitration of the International Centre for Alternate Dispute Resolution, New Delhi (the "Rules") or such other rules as may be mutually agreed by the Parties, and shall be subject to the provisions of the Arbitration and Conciliation Act, 1996.
10.1.2 The Arbitrators shall issue a reasoned award and such award shall be final and binding on the Parties. The venue of arbitration shall be Delhi and the language of arbitration shall be English."
3. The Arbitration Clause as included in the Substitution Agreement is set out below:
"8 DISPUTE RESOLUTION 8.1 Dispute resolution 8.1.1Any dispute, difference or claim arising out of or in connection with this Agreement which is not resolved amicably shall be decided by reference to arbitration to a Board of Arbitrators comprising one nominee each of the Authority, Concessionaire and the Lenders' Representatives. Such arbitration shall be held in accordance with the Rules of Arbitratyion of the International Centre for Alternative Dispute Resolution, New Delhi (the "Rules") or such other rules as may be mutually agreed by the Parties, and shall be subject to provisions of the Arbitration and Conciliation Act, 1996.
8.1.2The Arbitrators shall issue a reasoned award and such award shall be final and binding on the Parties. The venue of arbitration shall be Delhi and the language of arbitration shall be English."Signature Not Verified Digitally Signed By:DUSHYANT RAWAL
4. Certain disputes have arisen between the parties in respect of the aforementioned agreements - the Escrow Agreement and the Substitution Agreement.
5. The learned counsel appearing for respondent no.2 states that there are, in fact, no disputes between the parties as there is no failure on the part of respondent no.2 to perform any of its obligations under the Escrow Agreement or the Substitution Agreement.
6. The petitioner claims that respondent no.2 is required to deposit the Termination Payment in the Escrow Account, which it has failed to do. He also submits that the Escrow Agreement and the Substitution Agreement are also connected with the Concession Agreement entered into between respondent no.2 and respondent no.1. The said Concession Agreement contained covenants for the parties to enter itno the Escrow Agreement and Substitution Agreement in the formats as appended to the Concession Agreement.
7. The examination under Section 11 of the A&C Act is confined to the existence of an arbitration agreement. In this case, there is no dispute that the parties had entered into an Escrow Agreement and Substitution Agreement. There is also no dispute that Clause 10 and Clause 8 of the said agreements embody an Arbitration Agreement whereby, the parties had agreed to refer the disputes to arbitration.
8. The petitioner had invoked the arbitration by a notice dated 28.01.2020 and had appointed Justice (Retired) A.P. Shah, former Chief Justice of this Court as its nominee Arbitrator. Respondent no.2 had Signature Not Verified Digitally Signed By:DUSHYANT RAWAL responded to the said notice and, by a letter dated 26.02.2020, appointed Justice (Retired) Badar Durrez Ahmed, former Chief Justice of J&K High Court as its nominee Arbitrator. The third Arbitrator was required to be appointed by respondent no.1, both in terms of Clause 10 of the Escrow Agreement as well as Clause 8 of the Substitution Agreement. However, respondent no.1 has failed to appoint an Arbitrator.
9. None appears on behalf of respondent no.1 in these proceedings.
10. It is contended that respondent no.1 is not in a position to engage any advocate since the Board of Directors of respondent no.1 is not functional.
11. Notwithstanding that there may be some issues regarding the functioning of respondent no.1 company, the petitioner's right to refer the disputes to arbitration cannot be frustrated.
12. In view of the above, this Court considers it apposite to allow the present petition.
13. Accordingly, Justice (Retired) Mukul Mudgal, former Chief Justice of the Punjab and Haryana High Court (Mobile No. 9818000250) is appointed as the third Arbitrator on behalf of respondent no.1. This is subject to the learend Arbitrator making the necessary disclosure as required under Section 12(1) of the A&C Act and not being ineligible under Section 12(5) of the A&C Act.
14. With the said appointment, the Arbitral Tribunal stands constituted.
15. The parties are at liberty to approach the learned Arbitrator for further Signature Not Verified Digitally Signed By:DUSHYANT RAWAL proceedings.
16. It is clarified that all rights and contentions of the parties are reserved.
17. The petition is, accordingly, disposed of.
VIBHU BAKHRU, J DECEMBER 22, 2021 RK Click here to check corrigendum, if any Signature Not Verified Digitally Signed By:DUSHYANT RAWAL