Madras High Court
C.Velusamy vs K.Indhera on 19 April, 2022
Author: M.Sundar
Bench: M.Sundar
Arb. O.P.(Com.Div.)No.2 of 2022
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Dated : 19.04.2022
CORAM
THE HONOURABLE Mr.JUSTICE M.SUNDAR
Arb. O.P.(Com.Div.)No.2 of 2022
C.Velusamy
S/o.Chellappan
No.4/1, Annapoorani Nagar
Palani Andavar Mill (back side)
Udumalpet, Thiruppur District. ... Petitioner
vs.
K.Indhera
D/o.Mr.G.Krishnaswamy
No.3, Nehru Street
Opp. to Annavasal Hotel
Udumalpet 642 126. ... Respondent
Arbitration Original Petition filed under Section 11(6) of the
Arbitration and Conciliation Act, 1996 praying
(i) to appoint a sole Arbitrator or Arbitrators for the settlement of
disputes between the petitioner and the respondent in accordance with
Clause 11 of the Memorandum of Understanding dated 24.03.2021;
(ii) to direct the respondents to pay the costs;
For Petitioner : Mr.C.Mohan
for Ms.B.Manjula
For Respondent : Mr.C.P.Sivamohan
for Mr.Pranava Charan
*****
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https://www.mhc.tn.gov.in/judis
Arb. O.P.(Com.Div.)No.2 of 2022
ORDER
Captioned 'Arbitration Original Petition' [hereinafter 'Arb OP' for the sake of convenience and clarity] has been presented in this Court on 15.12.2021 under Section 11 of 'The Arbitration and Conciliation Act, 1996 (Act No.26 of 1996)' [hereinafter 'A and C Act' for the sake of convenience and clarity] with a prayer for appointment of sole Arbitrator/Arbitrators.
2. Mr.C.Mohan, learned counsel representing the counsel on record for sole petitioner and Mr.C.P.Sivamohan, learned counsel representing the counsel on record for lone respondent are before this Court.
3. Both learned counsel submit that the captioned Arb OP is predicated on clause 11 of a 'Memorandum of Understanding [MOU] dated 24.03.2021' [hereinafter 'primary contract and / or MOU' for the sake of convenience and clarity] between the petitioner and respondent.
4. Clause 11 of primary contract and / or MOU reads as follows:
'11. Both the parties agree with any disputes arising out this Memorandum of Understanding shall be resolved by Sole Arbitrator 2/7 https://www.mhc.tn.gov.in/judis Arb. O.P.(Com.Div.)No.2 of 2022 mutually agreed by both parties herein. The seat of Arbitration shall be in the city of Coimbatore and the Arbitration shall be conducted in English language.'
5. There is no disputation or contestation that the aforementioned clause 11 of primary contract and / or MOU serves as an Arbitration Agreement between the petitioner and respondent i.e., 'Arbitration Agreement' within the meaning of Section 2(1)(b) read with Section 7 of A and C Act.
6. This Court is informed that primary contract and / or MOU was operated and while it was operated certain arbitrable disputes erupted. Suffice to say that primary contract and / or MOU pertains to one party paying out creditors and taking out properties under mortgage and arbitrable disputes centers around the other party now wanting to make pay out on its own and the same being resisted. It is made clear that no opinion or view on the merits of the matter is expressed in this order as this is a Section 11 legal drill.
7. A Section 11 legal drill is largely confined to limited landscape qua 3/7 https://www.mhc.tn.gov.in/judis Arb. O.P.(Com.Div.)No.2 of 2022 statutory perimeter of existence of Arbitration Agreement owing to sub- section (6A) thereat. This principle has been laid down by Hon'ble Supreme Court in oft-quoted Mayavati Trading case law i.e., Mayavati Trading Pvt. Ltd vs Pradyuat Deb Burman reported in (2019) 8 SCC 714, relevant paragraph is paragraph No.10 and the same reads as follows:
'10. This being the position, it is clear that the law prior to the 2015 Amendment that has been laid down by this Court, which would have included going into whether accord and satisfaction has taken place, has now been legislatively overruled. This being the position, it is difficult to agree with the reasoning contained in the aforesaid judgments, as Section 11(6-A) is confined to the examination of the existence of an arbitration agreement and is to be understood in the narrow sense as has been laid down in the judgment in Duro Felguera SA.' (underlining made by this Court to supply emphasis and highlight)
8. Aforementioned paragraph No.10 of Mayavati Trading case law takes this Court to Duro Felguera principle i.e., M/s.Duro Felguera S.A. Vs M/s. Gangavaram Port Limited reported in 2017 (9) SCC 729, relevant paragraphs in Duro Felguera case law are paragraph Nos.47, 59 and the same read as follows:
'47. What is the effect of the change introduced by the 4/7 https://www.mhc.tn.gov.in/judis Arb. O.P.(Com.Div.)No.2 of 2022 Arbitration and Conciliation (Amendment) Act, 2015 (hereinafter referred to as "the 2015 Amendment") with particular reference to Section 11(6) and the newly added Section 11(6-A) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as "the 1996 Act") is the crucial question arising for consideration in this case. ......
59. The scope of the power under Section 11(6) of the 1996 Act was considerably wide in view of the decisions in SBP and Co.
and Boghara Polyfab. This position continued till the amendment brought about in 2015. After the amendment, all that the Courts need to see is whether an arbitration agreement exists – nothing more, nothing less. The legislative policy and purpose is essentially to minimize the Courts intervention at the stage of appointing the arbitrator and this intention as incorporated in Section 11(6-A) ought to be respected.'
9. As there is no disputation or contestation regarding the existence of Arbitration Agreement, this Court now proceeds to appoint a sole Arbitrator leaving open all the questions to be decided by sole Arbitrator.
10. Mr.J.V.Raj, learned District Judge (Retired), at No.E10-, Sangmithra Garden, Next to Krishna Park, Nehru Nagar West, Kalapatti Main Road, Coimbatore - 641 048 Mobile Nos.9445436345, 9442544255 is 5/7 https://www.mhc.tn.gov.in/judis Arb. O.P.(Com.Div.)No.2 of 2022 appointed as a sole Arbitrator. The learned sole Arbitrator is requested to enter upon reference, hold sittings in Coimbatore, adjudicate upon the arbitrable disputes that have arisen between the petitioner and respondent qua primary contract and / or MOU dated 24.03.2021 and make an arbitral award. The procedure shall be governed in accordance with Madras High Court Arbitration Proceedings Rules 2017 and fee of the learned sole Arbitrator shall be in accordance with the Madras High Court Arbitration Centre (MHCAC) (Administrative Cost and Arbitrator's Fees) Rules 2017.
11. Captioned Arb OP is disposed of in the aforesaid manner. There shall be no order as to costs.
19.04.2022 Speaking/Non-speaking order Index : Yes / No mk Note: Registry is directed to communicate a copy of this order forthwith to Mr.J.V.Raj, learned District Judge (Retired), at No.E10-, Sangmithra Garden, Next to Krishna Park, Nehru Nagar West, Kalapatti Main Road, Coimbatore - 641 048.
M.SUNDAR. J., 6/7 https://www.mhc.tn.gov.in/judis Arb. O.P.(Com.Div.)No.2 of 2022 mk Arb. O.P.(Com.Div.)No.2 of 2022 19.04.2022 7/7 https://www.mhc.tn.gov.in/judis