Calcutta High Court
M/S. P.K. Thakur & Company (Pvt.) Ltd vs Steel Authority Of India Ltd on 23 November, 2017
Author: Ashis Kumar Chakraborty
Bench: Ashis Kumar Chakraborty
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ORDER SHEET
A.P. No. 922 of 2017
IN THE HIGH COURT AT CALCUTTA
Ordinary Original Civil Jurisdiction
ORIGINAL SIDE
M/S. P.K. THAKUR & COMPANY (PVT.) LTD.
Versus
STEEL AUTHORITY OF INDIA LTD.
BEFORE:
The Hon'ble JUSTICE ASHIS KUMAR CHAKRABORTY
Date : 23rd November, 2017.
For Petitioner : Mr. Sidhartha Banerjee
with Mr. Kunal Ganguly, Advs.
For Respondent : Mr. Abhijit Gangopadhyay
with Ms. Supriya Dubey, Advs.
This is an application under Section 11(6) of the Arbitration & Conciliation Act, 1996, as amended by Act 3 of 2015 (in short "the Act of 1996") for appointment of an Arbitrator to adjudicate the dispute raised by the petitioner against the respondent relating to the contract dated November 28, 2008 and the General Conditions of Contract of 2008 under which the petitioner was to execute certain work at one of the steel plant of the respondent namely, IISCO Steel Plant, Burnpur.
Clause 10.1 of the contract contained the arbitral agreement which is, for the sake of convenience, extracted below:
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10.1 Arbitration (Reference GCC Clause 6) Any disputes, differences, whatsoever, arising between the parties out of or relating to the construction, meaning, scope, operation or effect of this Contract shall be settled between the Employer and the Contractor amicably. If however, the Employer and the Contractor are not able to resolve their disputes/differences amicably as aforesaid the said disputes/differences shall be settled by Conciliation, failing which, through Arbitration.
Conciliation shall be resorted to prior to invoking Arbitration. The applicable rules for conciliation preceding shall be that of "SCOPE forum of Conciliation and Arbitration" (SCFA). The Arbitration clause is to be invoked by the parties to the contract only on failure of conciliation proceedings.
The arbitration shall be governed in accordance with Arbitration and Conciliation Act, 1996 (hereinafter referred to as "the Act"). The language of arbitration shall be English.
Arbitration shall be governed by the Rules of Indian Council of Arbitration (ICA)/ "SCOPE Forum of Conciliation and Arbitration"
(SCFA) as agreed by the party. The venue shall be New Delhi.
During the pendency of the Conciliation or Arbitration proceedings both the parties (i.e. the Contractor and the employer) shall continue to perform their contractual obligations.
The arbitral tribunal shall give reasons for its award. The tribunal shall apportion the cost of arbitration between the parties, the award rendered in any arbitration hereunder shall be final and binding upon the parties. The parties agree that neither party shall have any right to commence or maintain any suit or legal proceeding concerning any dispute under this agreement until the dispute has been determined in accordance with the arbitration proceeding provided for herein and then only to enforce or facilitate the execution of an award rendered in such arbitration.
The Court of Asansol, West Bengal, India (with exclusion of all other Courts) shall have exclusive jurisdiction over all matters of dispute. 3 By a letter dated May 11, 2017 the petitioner informed the Chief Executive Officer of the respondent that it has various claims against the respondent relating execution of the contract dated November 28, 2008 which the parties have failed to amicably settle amongst themselves and requested him to engage a conciliator under Article 10 of the said contract dated November 28, 2008 in Asansol for resolving the issues. By a letter dated July 28, 2017, the Deputy General Manager of the respondent informed the petitioner that the claims raised by it cannot be amicably settled and steps should be taken for initiation of the conciliation proceeding as per Clause 10.1 of the said contract as per the Rules of Conciliation of SCOPE Forum of Conciliation & Arbitration (hereinafter referred to "SCFA"). After receipt of the said letter dated July 28, 2017, by a letter dated July 31, 2017 the petitioner informed the respondent that since the issue involved got judicial intervention, a different view had been contended by it. Thereafter, on October 28, 2017 the petitioner filed this application before this Court for appointment of the Arbitrator.
In this application, the petitioner has claimed that since the parties have already failed to amicably settle the petitioner's claim, there is no point in referring the disputes to any conciliation proceeding to Scope Forum of Conciliation and Arbitration (in short "SFCA") and, as such, the disputes between the parties should be referred to an arbitrator for adjudication. According to Mr. Banerjee, learned advocate for the petitioner as per Article 7 of SFCA Rules if one of the parties to the contract rejects the invitation of the other party for conciliation of their disputes, there would be no conciliation proceedings at all. Therefore, it was contended that when the petitioner does not intend to refer it claim against the respondent for conciliation as per SFCA, this Court would appoint an arbitrator 4 under clause 11(6) of the Act of 1996 for adjudicating the disputes between the parties. The petitioner also relied on Section 11(6A) of the Act of 1996 and submitted that in view of the unreported decision of the Supreme Court dated October 10,2017 in A.P. No. 30 of 2016 (M/s. Duro Felguera, S.A vs. M/s Gangavaran Port Ltd.) before appointing an arbitrator, this Court has only to be satisfied about the existence of the arbitral agreement between the parties.
However, Mr. Abhijit Gangopadhyay, learned counsel appearing for the respondent, strenuously contended that the petitioner's present application for appointment of arbitrator, is not maintainable on the ground that although the claim of the petitioner could not be amicably settled, but as per Article 10 of the contract dated November 28, 2017 before an arbitrator is appointed, the disputes should be first referred for a conciliation proceedings under SCFA and it is only if the said conciliation proceeding fails, the said disputes can be referred to arbitration. He strenuously contended that when the parties agreed to the procedure that an arbitrator can be appointed only after failure of both the amicable settlement of the disputes between the parties and the conciliation proceeding, under SCFA, the disputes between the parties can be referred to an arbitrator. He strongly contended that in view of the procedure agreed between the parties, without the disputes being first referred to the conciliation proceeding under SCFA, the petitioner's present application before this Court is not maintainable. It was a strenuously urged that in any event, the claim raised by the petitioner is hopelessly barred by the laws of limitation. The learned counsel for the respondent, however, did not dispute that as per Article 7 of SFCA, if a party does not accept the invitation of the other, there will be no conciliation proceedings at all. It was 5 also not disputed that once the parties have failed to amicably settle the disputes arising out of the claims raised by the petitioner, the conciliation proceeding under SCFA will not be effective and in view of the refusal of the petitioner to refer the disputes for conciliation, the agreed procedure for appointment of arbitration has failed. The attention of this Court was not drawn to any authority in support of the contention that in the facts of the present case, without resorting to the conciliation proceeding under SCFA, the disputes between the parties cannot be decided in arbitration.
I have considered the facts of the case, as well as the arguments advanced by the learned counsel appearing for the respective parties. In the present case, admittedly the parties have failed to amicably settle their disputes relating to the claims raised by the petitioner against the respondent relating to the contract dated November 28, 2008. Therefore, there is hardly any chance that the same disputes can be resolved in the conciliation proceeding. In any event, the applicable Rule for conciliation proceeding, namely, Article 7 of SCFA Rules, 2003 provides that the petitioner may reject an invitation of the respondent to refer the disputes between the parties for conciliation. Further, the point raised by the respondent that the claim of the petitioner being barred by the laws of limitation can be effectively decided by an arbitrator in the arbitral proceeding. Therefore, I find that in the facts of the present case the petitioner is justified in its contention that there is no point in referring the same disputes for conciliation as per the Rules of SCFA For the reasons as aforesaid, when the existence an arbitral agreement between the parties is not in dispute in view of the unreported decision of the Supreme Court dated October 10, 2017 in A.P. No. 30 of 2016 (M/s. Duro Felguera, S.A vs. M/s Gangavaran 6 Port Ltd.) I find that the petitioner's present application should be allowed. Accordingly, the disputes raised by the petitioner relating its claim mentioned in the letter dated May 11, 2017 addressed to the Chief Executive Officer of the respondent, IISCO Steel Plant, Burnpur, as well as the counter claims of the respondent if any, are referred to Mr. Surojit Nath Mitra, Senior Advocate, as the sole Arbitrator.
The learned Arbitrator will be free to fix his remuneration in the arbitral proceeding, to be equally shared by the parties. The Arbitrator will also also decide the other relevant matters relating to the arbitral proceeding.
With the above directions, A.P. No. 922 of 2017 stands allowed. There shall, however, be no order as to costs.
Urgent certified website copy of this order be supplied to the parties, if applied for, upon compliance with requisite formalities.
(ASHIS KUMAR CHAKRABORTY, J.) K. Banerjee A.R. [C.R.]