Gujarat High Court
1. Pradeep Transcore Private Limited ... vs Tbea Energy India Private Limited ... on 30 April, 2021
Equivalent citations: AIRONLINE 2021 GUJ 464
Author: Bela M. Trivedi
Bench: Bela M. Trivedi
C/IAAP/70/2020 CAV JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/PETN. UNDER ARBITRATION ACT NO. 70 of 2020
FOR APPROVAL AND SIGNATURE:
HONOURABLE MS. JUSTICE BELA M. TRIVEDI
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1 Whether Reporters of Local Papers may be allowed to NO
see the judgment ?
2 To be referred to the Reporter or not ? YES
3 Whether their Lordships wish to see the fair copy of the NO
judgment ?
4 Whether this case involves a substantial question of law NO
as to the interpretation of the Constitution of India or any
order made thereunder ?
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1. PRADEEP TRANSCORE PRIVATE LIMITED
THROUGH ITS MANAGING DIRECTOR
MR HARISH CHANDRA GIRI
Versus
TBEA ENERGY INDIA PRIVATE LIMITED
THROUGH ITS MANAGING DIRECTOR
MR. CHEN ZHEJIN
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Appearance:
MR MUHAMMAD ISA M HAKIM(10874) for the Petitioner(s) No. 1
MR VINAM GUPTA, ADVOCATE FOR MR HARDIK A SHAH(8217) for the
Respondent(s) No. 1
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CORAM: HONOURABLE MS. JUSTICE BELA M. TRIVEDI
Date : 30/04/2021
CAV JUDGMENT
1. The petitioner M/s.Pradeep Transcore Private Limited, has Page 1 of 23 Downloaded on : Fri Apr 30 22:44:34 IST 2021 C/IAAP/70/2020 CAV JUDGMENT approached this Court by way of the present Arbitration Petition, invoking Section 11 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as "the said Act"), seeking following prayer as contained in Paragraph 15: "15(A) This Hon'ble Court may be pleased to appoint the sole arbitrator as per Article 18 of the MOU/Agreement executed on 6.2.2019 and signed on stamp paper on 10.7.2019 and in accordance with powers under Section 11 of the arbitration and Conciliation Act, 1996 in order to submit the disputes between the parties to arbitration.".
2. The limited short facts necessary for the purpose of deciding the present application are as under: 2.1 The petitioner is a Company incorporated under the Companies Act, 1956, engaged in the business of manufacturing transformers and other allied electrical equipments and then selling them to various manufacturers across the country. The petitioner has a plant for carrying out its manufacturing works at Allahabad.
2.2 The respondent TBEA is a company incorporated under the Companies Act, 1956 and is a wholly owned subsidiary of the Chinese Multi National Company, TBEA Page 2 of 23 Downloaded on : Fri Apr 30 22:44:34 IST 2021 C/IAAP/70/2020 CAV JUDGMENT engaged in the business of manufacturing transformers having its registered office and Industrial Unit at Vadodara, where it is engaged in the business of manufacturing power transformers and other electrical equipments. 2.3 The petitioner and the respondent, on 6.2.2019, entered into an MOU/Agreement containing terms and conditions that were finalized between the parties on E mail. The said agreement essentially was for the supply of jobwork, whereby the respondent had promised to supply the petitioner with jobwork of 5000 Tons per annum of CRGO Lamination and 6000 Tons of slitting jobwork for a lockin period of 7 years. According to the petitioner, the said agreement dated 6.2.2019 was signed on the Stamp Paper by the Managing Directors of both the parties at the Vendors Meet organized on the 10th July, 2019 at Vadodara.
2.4 Article 18 contained in the said agreement dated 6.2.2019 pertaining to the Arbitration reads as under: "Article 18 - Arbitration
(a) Any and all disputes or differences between the parties arising out of or in connection with this MOU or its performance shall, so far as it is possible, be settled amicably between the parties. Page 3 of 23 Downloaded on : Fri Apr 30 22:44:34 IST 2021 C/IAAP/70/2020 CAV JUDGMENT
(b) If after thirty (30) days of consultation the parties fails to reach an amicable settlement, on any and all disputes or differences arising out of or in connection with this MOU or its performance, the same shall be referred to a dispute resolution committee consisting of CEO's of PTC and TBEA, India.
(c) If after thirty (30) days of reference such dispute to the dispute resolution committee, the parties fail to resolve such disputes or differences, such disputes or differences shall be submitted to arbitration at the request of either party upon written notice to that effect to the other party and such arbitration shall be conducted in accordance with Arbitration and Conciliation Act, 1996.
(d) The language of arbitration shall be English. The venue of arbitration shall be Vadodara, India." 2.5 As per the further case of the petitioner, the respondent did not abide by the terms of the agreement, and therefore, the petitioner sought enforcement of the said agreement. Thereafter number of Email communications ensued between the parties. Both the parties also organized a meeting between the CEOs of both the companies on 9.7.2020, however, no solution was arrived at.
2.6 The petitioner thereafter addressed a written communication/Notice dated 2.7.2020 to the respondent Page 4 of 23 Downloaded on : Fri Apr 30 22:44:34 IST 2021 C/IAAP/70/2020 CAV JUDGMENT calling upon the respondent to submit the dispute to the arbitration as per Article 18 of the said MOU dated 6.2.2019. The further case of the petitioner is that the respondent's legal representative replied to the said Notice vide the reply dated 11.8.2020 stating inter alia that the said MOU dated 6.2.2019 was not in force any more and that a subsequent agreement on 22.10.2019 was entered into between the parties superseding the earlier MOU dated 6.2.2019. The respondent therefore refused to submit the dispute to the Arbitrator as demanded by the petitioner.
2.7 Thereafter the respondent's legal representative issued a separate notice on 20.8.2020 to the petitioner invoking the arbitration clause as contained in the agreement dated 22.10.2019 which had allegedly superseded the agreement dated 6.2.2019.
2.8. On 28.8.2020 the petitioner's legal representative Mr. Pathan replied to the respondent's reply dated 11.8.2020 (AnnexureI), denying the supersession of the agreement dated 06.02.2019/10.07.2019 by the agreement dated 22.10.2019 and further requesting the respondent to Page 5 of 23 Downloaded on : Fri Apr 30 22:44:34 IST 2021 C/IAAP/70/2020 CAV JUDGMENT appoint an Arbitrator to resolve the disputes between the parties. It appears that the petitioner's another legal representative Mohammad Isa Hakim gave a separate reply to the respondent's notice dated 20.8.2020 (Annexed along with AnnexureI), denying the existence of the agreement dated 22.10.2019, allegedly signed on the Stamp Paper on 7.11.2019, also not agreeing with the proposal of the respondent to jointly approach the High Court of Gujarat and the proposal of the proposed Arbitrator under the alleged agreement dated 22.10.2019. 2.9 On 25.9.2020, the petitioner received an Email from Mr. Justice Dipak Verma, Former Judge, Supreme Court of India, inter alia, giving consent to act as the Sole Arbitrator and fixing the preliminary hearing of the arbitration proceedings on 29.9.2020 through Video Conferencing (AnnexureJ colly). Since the said appointment of the Arbitrator was not agreeable to the petitioner, the petitioner has approached this Court by way of the present petition, invoking the Section 11 of the said Act, for the appointment of Sole Arbitrator as per Article 18 of the agreement dated 6.2.2019, signed on the stamp paper on 10.07.2019.
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3. The petition has been resisted by the respondent by filing the reply denying the allegations and averments made in the petition, also raising preliminary objection on the maintainability of the petition, as the sole Arbitrator Justice Verma had already initiated the arbitration proceedings. The petitioner has filed the affidavitinrejoinder to the reply filed by the respondent.
4. In the first limb of his arguments, Mr.MTM Hakim for the petitioner vehemently submitted that there was no agreement executed between the parties on 22.10.2019 superseding the earlier agreement dated 6.2.2019 and the respondent was bound to act as per the said agreement dated 6.2.2019 and appoint the Arbitrator as per Clause 18 of the said agreement. He further submitted that the appointment of the sole Arbitrator by the respondent under the alleged agreement dated 22.10.2019 was nonest in the eye of law. The present petition seeking invocation of Section 11 of the said Act for the appointment of Arbitrator under Article 18 of the agreement dated 6.2.2019 was maintainable. Mr.Hakim has placed heavy reliance on the decision of the Supreme Court in case of Perkins Eastman Page 7 of 23 Downloaded on : Fri Apr 30 22:44:34 IST 2021 C/IAAP/70/2020 CAV JUDGMENT Architects Dpc Vs. Hscc (India) Limited, reported in 2019 SCC Online SC 1517, wherein it has been observed inter alia that unless the appointment of Arbitrator is ex facie valid, the acceptance of such appointment as a fait accompli to debar the jurisdiction under Section 11(6) cannot be countenanced in law. Reliance has also been placed on the decision of the Supreme Court in case of Dharma Prathishthanam Vs. Madhok Construction (P) Ltd., reported in (2005) 9 SCC 686 to contend that the reference of the dispute to the Arbitrator without following the procedure and methodology adopted by the parties, would be void ab initio and nullity and liable to be ignored. In the instant case also, runs the submission of Mr.Hakim, the appointment of the sole Arbitrator by the respondent under the alleged agreement dated 22.10.2019 was not as per the Arbitration Clause contained in the agreement dated 6.2.2019 (10.07.2019) executed between the parties, and therefore such an appointment was void ab initio and nullity.
5. Lastly, while admitting the correspondences made by Mr, Firozkhan M. Pathan as the legal representative of the petitioner, and also conceding the fact that the petition did not contain the Page 8 of 23 Downloaded on : Fri Apr 30 22:44:34 IST 2021 C/IAAP/70/2020 CAV JUDGMENT requisite averments, with regard to the undated letter written by Mr.Hakim as the legal representative of the petitioner in response to the Arbitration Notice dated 20.8.2020 given by the respondent, Mr.Hakim urged that such flaws in the drafting of pleadings may not be viewed seriously, which would otherwise affect the right of the petitioner to approach the Court under Section 11 of the said Act.
6. The learned Advocate Mr.Vinam Gupta appearing with the learned Advocate Mr.Hardik Shah for the respondent, however, taking the Court to the various correspondences that ensued between the parties as also to the various provisions of the said Act, submitted that the petitioner itself had called upon the respondent to appoint an Arbitrator vide the Notices dated 21.7.2020 and 28.8.2020 for resolving the disputes which had arisen between the parties. He also submitted that since the agreement dated 6.2.2019 was superseded by the agreement dated 22.10.2019 which contained the same arbitration clause as contained in the agreement dated 6.2.2019, the legal representative of the respondent vide the Notice dated 20.8.2020 had called upon the petitioner to give consent to the name of the Page 9 of 23 Downloaded on : Fri Apr 30 22:44:34 IST 2021 C/IAAP/70/2020 CAV JUDGMENT Arbitrator suggested by the respondent, or to jointly approach the High Court of Gujarat for the appointment of Arbitrator, however, the petitioner having failed to act accordingly within 30 days after the receipt of the Notice, the respondent had requested Mr. Justice Deepak Verma, Former Judge, Supreme Court of India to act as an Arbitrator to resolve the disputes between the parties. Mr. Justice Verma having consented to act as the Sole Arbitrator and having proceeded with the Arbitration Proceedings, the only course open for the petitioner was to challenge the procedure adopted for the appointment of the Arbitrator under Section 13 of the said Act and that the present petition for fresh appointment under Section 11(6) of the said Act would not be maintainable. To buttress his submission, Mr.Gupta has relied upon the decision of the Supreme Court in case of Antrix Corporation Limited Vs. Devas Multimedia Private Limited, reported in (2014) 11 SCC 560, wherein it has been held inter alia that once the Arbitration Agreement was invoked by a party and a Nominee Arbitrator was appointed by it, the arbitration agreement could not have been invoked for the second time by the other party, which was aware of the appointment made by the first party, and that such appointment can be questioned under Section 13 of the said Act, and not Page 10 of 23 Downloaded on : Fri Apr 30 22:44:34 IST 2021 C/IAAP/70/2020 CAV JUDGMENT under Section 11(6) of the said Act.
7. Now first of all, in order to advert to the preliminary objection raised by the learned Advocate Mr.Gupta for the respondent with regard to the maintainability of the petition under Section 11(6) of the said Act, it would be necessary to recapitulate the facts. The petitioner has relied upon the Article 18 of the MOU/Agreement dated 6.2.2019, signed on 10.7.2019, for the purpose of the appointment of an arbitrator, whereas the respondent has relied upon the Article 18 of the Agreement dated 22.10.2019, which according to the respondent, had superseded the agreement dated 6.2.2019. It is not disputed that both the Articles contained in both the agreements pertained to the Arbitration, and bore the same provisions. The said Articles stated inter alia to resolve the disputes or differences between the parties, firstly by amicable settlement, failing which to refer them to the Dispute Resolution Committee consisting of CEOs of both the parties. Both the said Articles further provided that if after 30 days of reference of such disputes to the Dispute Resolution Committee, the parties fail to resolve such disputes or differences, such disputes or differences Page 11 of 23 Downloaded on : Fri Apr 30 22:44:34 IST 2021 C/IAAP/70/2020 CAV JUDGMENT shall be submitted to Arbitration at the request of either party upon written notice to that effect to the other party and such arbitration shall be conducted in accordance with Arbitration and Conciliation Act, 1996.
8. It is also not disputed that initially the correspondences through Email were ensued between the parties as regards the disputes and differences which arose between them, and thereafter the said disputes were referred to the Dispute Resolution Committee namely to the CEOs of both the parties. However, the CEOs having failed to resolve the said disputes, the legal representative of the petitioner Mr.Firozkhan M. Pathan vide Notice dated 21.07.2020 called upon the respondent to appoint the Arbitrator or suggest the name of their Arbitrator for resolving the disputes arising out of the MOU dated 06.02.2019 executed between the parties, within 30 days of the receipt of the said notice. The said Notice was replied by the legal representative of the respondent vide the reply dated 11.08.2020, stating inter alia that the MOU dated 6.02.2019 was subsequently replaced and superseded by the Agreement dated 22.10.2019 executed between the parties in November 2019, and Page 12 of 23 Downloaded on : Fri Apr 30 22:44:34 IST 2021 C/IAAP/70/2020 CAV JUDGMENT therefore, the claims made by the petitioner were not arbitrable as suggested in the said notice dated 21.07.2020. At the same time, the respondent through its legal representative sent a notice dated 20.08.2020, invoking the arbitration clause contained in the agreement dated 22.10.2019 signed by the parties on 7.11.2019, and called upon the petitioner to grant consent for the appointment of the Arbitrator named in the said notice within 30 days or to approach the High Court of Gujarat for the appointment of an Arbitrator. The petitioner through its legal representative Mr.Pathan gave a reply dated 28.08.2020 to the respondent's reply dated 11.08.220 and denied the execution of the agreement dated 22.10.2019 and again called upon the respondent to appoint an Arbitrator for the resolution of disputes as per the MOU dated 6.02.2019.
9. Interestingly, another legal representative of the petitioner i.e. the Advocate Mr. Mohammad Isa Hakim gave separate reply dated NIL to the Notice dated 20.8.2020 given by the respondent, denying the execution of the agreement dated 22.10.2019. Mr. Hakim while acknowledging the reply given by Mr.Pathan on behalf of the petitioner on 28.8.2020, did not Page 13 of 23 Downloaded on : Fri Apr 30 22:44:34 IST 2021 C/IAAP/70/2020 CAV JUDGMENT agree to the proposal to jointly approach the High Court of Gujarat or to the appointment of the proposed Arbitrator, however, he reserved the right of the petitioner to approach the High Court of Gujarat, seeking appointment of an Arbitrator as per the agreement dated 06.02.2019/10.7.2019. The respondent thereafter sought a consent of Mr.Justice Dipak Verma, Former Judge, Supreme Court of India, to act as an arbitrator to resolve the disputes between the parties. Mr. Justice Verma after giving the consent to act as the Sole Arbitrator commenced the proceedings by informing the parties about his written consent and the declaration in the prescribed form, also fixing the first preliminary hearing for the date 29th September, 2020. The legal representative of the petitioner, Mr. Hakim therefore, requested the said Arbitrator Mr. Justice Verma during the course of first preliminary hearing on 29.9.2020 not to proceed further with the arbitration proceedings by submitting that the petitioner had already filed an application under Section 11 of the said Act. Considering the said request, the Sole Arbitrator Mr. Justice Verma had adjourned the proceedings till 18.10.2020.
10. From the aforestated facts and the correspondences that Page 14 of 23 Downloaded on : Fri Apr 30 22:44:34 IST 2021 C/IAAP/70/2020 CAV JUDGMENT ensued between the parties, it clearly emerges that an identically worded arbitration clause was included in both the disputed agreements dated 6.02.2019 and 22.10.2019, which laid down the procedure for the appointment of the Arbitrator and both the parties relying upon their respective agreements had followed the procedure contained in both the agreements, i.e. initially by referring the disputes to the Dispute Resolution Committee comprising of CEOs of both the parties, and they having failed in the same, by issuing Notices calling upon each other to appoint an Arbitrator. It also emerges that the Sole Arbitrator appointed by the respondent had commenced the proceedings by fixing the preliminary hearing, though the same was adjourned considering the request of the learned Advocate for the respondent (petitioner herein). Thus, the procedure contained in the said arbitration clause for the appointment of Arbitrator having been followed and the Sole Arbitrator having already been appointed, the only course open to the petitioner was to challenge such procedure for the appointment of the Arbitrator or to challenge the appointment of Arbitrator under Section 13 of the said Act. The present petition filed under Section 11 of the said Act, as such, would not be maintainable.
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11. At this juncture, it would be relevant to reproduce the observations made by the Supreme Court in case of Antrix Corporation Limited Vs. Devas Multimedia Private Limited (supra), wherein the Supreme Court while holding that where an Arbitrator had already been appointed and intimation thereof had been conveyed to the other party, a separate application invoking arbitration agreement and seeking an appointment of an Arbitrator again would not be maintainable, observed as under in para. No. 31 thereof:
"31. The matter is not as complex as it seems and in our view, once the Arbitration Agreement had been invoked by Devas and a nominee Arbitrator had also been appointed by it, the Arbitration Agreement could not have been invoked for a second time by the Petitioner, which was fully aware of the appointment made by the Respondent. It would lead to an anomalous state of affairs if the appointment of an Arbitrator once made, could be questioned in a subsequent proceeding initiated by the other party also for the appointment of an Arbitrator. In our view, while the Petitioner was certainly entitled to challenge the appointment of the Arbitrator at the instance of Devas, it could not do so by way of an independent proceeding under Section 11(6) of the 1996 Act. While power has been vested in the Chief Justice to appoint an Arbitrator under Section 11(6) of the 1996 Act, such appointment can be questioned under Section 13 thereof. In a proceeding under Section 11 of the 1996 Act, the Chief Justice cannot replace one Arbitrator already appointed in exercise of the Arbitration Agreement."Page 16 of 23 Downloaded on : Fri Apr 30 22:44:34 IST 2021 C/IAAP/70/2020 CAV JUDGMENT
12. Ofcourse, the learned Advocate Mr.Hakim for the petitioner has placed heavy reliance on the decision of the Supreme Court in case of Perkins Eastman Architects DPC & Anr. (supra), in which the two Judge Bench of Supreme Court after referring the decision in case of Antrix Corporation Limited (supra) and following the decision in case of Walter Bau arbitration agreement, legal Successor of the Original Contractor, Dyckerhoff and Widmann, A.G. Versus Municipal Corporation of Greater Mumbai and another reported in (2015) 3 SCC 800, and in case of TRF Limited versus Energo Engineering Projects Limited reported in (2017) 8 SCC 377, exercised the powers under Section 11(6) of the said Act, on the ground that the appointment of Arbitrator was invalid. The relevant observations made in the said decision are reproduced as under:
"21. The further question that arises is whether the power can be exercised by this Court under Section 11 of the Act when the appointment of an arbitrator has already been made by the respondent and whether the appellant should be left to raise challenge at an appropriate stage in terms of remedies available in law. Similar controversy was gone into by a Designated Judge of this Court in Walter Bau AG and the discussion on the point was as under: "9. While it is correct that in Antrix and Pricol Ltd., it was opined by this Court that after appointment of an arbitrator is made, the remedy of the aggrieved party is not under Section 11(6) but such remedy lies elsewhere and under different provisions of the Page 17 of 23 Downloaded on : Fri Apr 30 22:44:34 IST 2021 C/IAAP/70/2020 CAV JUDGMENT Arbitration Act (Sections 12 and 13), the context in which the aforesaid view was expressed cannot be lost sight of. In Antrix, appointment of the arbitrator, as per the ICC Rules, was as per the alternative procedure agreed upon, whereas in Pricol Ltd.., the party which had filed the application under Section 11(6) of the Arbitration Act had already submitted to the jurisdiction of the arbitrator. In the present case, the situation is otherwise.
10. Unless the appointment of the arbitrator is ex facie valid and such appointment satisfies the Court exercising jurisdiction under Section 11(6) of the Arbitration Act, acceptance of such appointment as a fait accompli to debar the jurisdiction under Section 11(6) cannot be countenanced in law. In the present case, the agreed upon procedure between the parties contemplated the appointment of the arbitrator by the second party within 30 days of receipt of a notice from the first party. While the decision in Datar Switchgears Ltd. may have introduced some flexibility in the time frame agreed upon by the parties by extending it till a point of time anterior to the filing of the application under Section 11(6) of the Arbitration Act, it cannot be lost sight of that in the present case the appointment of Shri Justice A.D. Mane is clearly contrary to the provisions of the Rules governing the appointment of arbitrators by ICADR, which the parties had agreed to abide by in the matter of such appointment. The option given to the respondent Corporation to go beyond the panel submitted by ICADR and to appoint any person of its choice was clearly not in the contemplation of the parties. If that be so, obviously, the appointment of Shri Justice A.D. Mane is non est in law. Such an appointment, therefore, will not inhibit the exercise of jurisdiction by this Court under Section 11(6) of the Arbitration Act. It cannot, therefore, be held that the present proceeding is not maintainable in law. The appointment of Shri Justice A.D. Mane made beyond 30 days of the receipt of notice by the petitioner, though may appear to be in conformity with the law laid down in Datar Switchgears Ltd18., is clearly contrary to the agreed procedure which required the Page 18 of 23 Downloaded on : Fri Apr 30 22:44:34 IST 2021 C/IAAP/70/2020 CAV JUDGMENT appointment made by the respondent Corporation to be from the panel submitted by ICADR. The said appointment, therefore, is clearly invalid in law."
22. It may be noted here that the aforesaid view of the Designated Judge in Walter Bau AG3 was pressed into service on behalf of the appellant in TRF Limited4 and the opinion expressed by the Designated Judge was found to be in consonance with the binding authorities of this Court. It was observed: "32. Mr Sundaram, learned Senior Counsel for the appellant has also drawn inspiration from the judgment passed by the Designated Judge of this Court in Walter Bau AG, where the learned Judge, after referring to Antrix Corpn. Ltd. , distinguished the same and also distinguished the authority in Pricol Ltd. v. Johnson Controls Enterprise Ltd.17 and came to hold that:
"Unless the appointment of the arbitrator is ex facie valid and such appointment satisfies the Court exercising jurisdiction under Section 11(6) of the Arbitration Act, acceptance of such appointment as a fait accompli to debar the jurisdiction under Section 11(6) cannot be countenanced in law. ..."
33. We may immediately state that the opinion expressed in the aforesaid case is in consonance with the binding authorities we have referred to hereinbefore."
23. In TRF Limited4, the Managing Director of the respondent had nominated a former Judge of this Court as sole arbitrator in terms of aforesaid Clause 33(d), after which the appellant had preferred an application under Section 11(5) read with Section 11(6) of the Act. The plea was rejected by the High Court and the appeal therefrom on the issue whether the Managing Director could nominate an arbitrator was decided in favour of the appellant as stated hereinabove. As regards the issue about fresh Page 19 of 23 Downloaded on : Fri Apr 30 22:44:34 IST 2021 C/IAAP/70/2020 CAV JUDGMENT appointment, this Court remanded the matter to the High Court for fresh consideration as is discernible from para 55 of the Judgment. In the light of these authorities there is no hindrance in entertaining the instant application preferred by the Applicants."
13. Now, let us examine as to whether the appointment of the Arbitrator made by the respondent could be said to be invalid or nonest so as to exercise the jurisdiction under Section 11(6) of the Act. In the instant case, it transpires that none of the parties had disputed about the existence of the Arbitration Clause No. 18 contained in their respective agreements relied upon by them. The petitioner relies upon the Clause18 as contained in the agreement dated 06.02.219 signed on 10.07.2019, and the respondent relies upon the identically worded Clause18 contained in the agreement dated 22.10.20198 allegedly signed on 07.11.2019. As stated earlier, the petitioner's legal representative Mr.Pathan having twice called upon the respondent vide Notice dated 21.7.2020 and 28.8.2020 to appoint an Arbitrator as per Article 18 of the MOU dated 6.2.2019, and the respondent having appointed the Sole Arbitrator Mr. Justice Deepak Verma after giving due Notice dated 20.8.2020, it could not be said that the appointment made by the respondent was without following the agreed procedure Page 20 of 23 Downloaded on : Fri Apr 30 22:44:34 IST 2021 C/IAAP/70/2020 CAV JUDGMENT and therefore was nonest in the eye of law. It may be noted that the Sole Arbitrator was appointed within the knowledge of the petitioner and the arbitration proceedings had also been initiated by the said Sole Arbitrator, and therefore the only course open for the petitioner was to approach the Court under Section 13 of the said Act, challenging the procedure/appointment of the Arbitrator. Beneficial reference of the decisions in case of Antrix Corporation Limited vs. Devas Mulitmedia Private Limited reported in (2014) 11 SCC 560 and in case of Pricol Ltd. v. Johnson Controls Enterprise Ltd. reported in (2015) 4 SCC 177 be made in this regard. It is also a well settled legal position of law that in view of Section 16 of the said Act, the arbitral Tribunal is empowered to rule on its own jurisdiction, including to rule on any objection with respect to the existence or validity of the arbitration agreement. As held by the Supreme Court in case of Chloro Controls (I) P. Ltd. Vs. Severn Trent Water Purification Inc., reported in JT 2012 (10) SC 187, challenge to the existence or validity of the arbitration agreement will not prevent the Arbitral Tribunal from proceeding with hearing and ruling upon jurisdiction. As per the principles of "Kompetenz Kompetenz' also, the Arbitral Tribunal is entitled to determine its jurisdiction, which may be reviewable by the Court Page 21 of 23 Downloaded on : Fri Apr 30 22:44:34 IST 2021 C/IAAP/70/2020 CAV JUDGMENT when there is an action to enforce or set aside the Arbitral award. In the latest decision in case of Uttarakhand Purv Sainik Kalyan Nigam Limited Vs. Northern Coal Field Limited, reported in (2020) 2 SCC 455, the Supreme Court has held that in view of the legislative mandate contained in Section 11(6A), the Court is now required only to examine the existence of the arbitration agreement. All other preliminary or threshold issues are left to be decided by the Arbitrator under Section 16, which enshrines the KompetenzKompetenz Principle that the Arbitral Tribunal is empowered and has the competence to rule on its own jurisdiction, including determining all jurisdictional issues, and the existence or validity of the arbitration agreement.
14. In the instant case, undisputedly both the parties had intended to refer the disputes to the arbitration and had accordingly agreed for the same. Hence, there being existence of arbitration agreement, and the Sole Arbitrator having been appointed, as per the procedure agreed upon by the parties, all the other issues as regards the jurisdiction or about the validity of the arbitration agreement could be decided by the Arbitrator. Page 22 of 23 Downloaded on : Fri Apr 30 22:44:34 IST 2021 C/IAAP/70/2020 CAV JUDGMENT
15. In that view of the matter, the petition being misconceived in facts and in law, deserves to be dismissed and is dismissed accordingly.
(BELA M. TRIVEDI, J) V.V.P. PODUVAL /SINDHU Page 23 of 23 Downloaded on : Fri Apr 30 22:44:34 IST 2021