Supreme Court - Daily Orders
Container Corp.Of India Ltd. vs M/S Shivhare Road Lines on 7 July, 2014
"W CA @ SLP(C) No. 2012/2011
1
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 6029 OF 2014
(arising out of S.L.P. (Civil) No. 2012 of 2011)
CONTAINER CORP.OF INDIA LTD.& ANR Appellant(s)
VERSUS
M/S SHIVHARE ROAD LINES Respondent(s)
O R D E R
Leave granted.
2. The relevant part of the arbitration clause between the parties reads as follows :
"25. ARBITRATION 25.1 In case of any disputes arising out of interpretation of any of the provisions of this contract, an arbitrator shall be appointed by the Managing Director. There will be no objection if the arbitrator so appointed is an employee of CONCOR and that he had to deal with the matters to which the contract relates and that in the course of his duties as such he had expressed views on all or any of the matters in dispute in reference.
25.2 Subject as aforesaid, the provisions of the Arbitration Act, 1994 or any statutory modification or re-enactment thereof and the rules made thereunder and for the time being in force shall apply to the arbitration proceedings under this clause.Signature Not Verified 25.3 It is a term of the contract that the party invoking Digitally signed by Rajesh Dham
arbitration shall specify the dispute or disputes to be Date: 2014.07.10 17:22:12 IST Reason: referred to arbitration under this clause together with the amount or amount claimed in respect of each dispute. The arbitrator(s) may from time to time, with consent of the parties, enlarge the time for making and publishing the award."CA @ SLP(C) No. 2012/2011 2
3. The respondent initially vide letter dated May 23, 2008 demanded the payment of outstanding amount of Rs. 1,56,71,748/- from the appellants towards the bills raised by it from time to time. By a subsequent communication dated November 5, 2008, the respondent asked the appellant No. 2 for appointment of the sole arbitrator for settlement of disputes arising from the various bills and letters. The communication dated November 5, 2008 reads as follows :-
"SRL/CON/ND/01/1711 November 5, 2008 The Managing Director, Container Corporation of India Ltd. Concor Bhawan, C-3, Mathura Road, Opp. Apollo Hospital, New Delhi - 110 076.
Sub. : Appointment of Sole Arbitrator for settlement of disputes. Project: Terminal Operator at ICD, Malanpur (Gwalior) Ref:01.CON/NCP/OCM/XVI/10/05/2646 dt. 01.12.2005
02.Our letter No. SRL/CONCOR/MLAR/01/1352 dt.12.05.08
03.Our letter No. SRL/CONCOR/MLAR/08/1377 dt.19.05.08
04.Our letter No. SRL/CONCOR/MLAR/01/1390 dt.23.05.08
05.Our letter No. SRL/CONCOR/MLAR/01/1413 dt.03.06.08
06.Our letter No. SRL/CONCOR/MLAR/01/1415 dt.03.06.08
07.Our letter No. SRL/CONCOR/MLAR/01/1438 dt.18.06.08
08.Our letter No. SRL/CONCOR/MLAR/01/1498 dt.18.07.08
09.Our letter No. SRL/CONCOR/MLAR/01/1540 dt.07.08.08 Dear Sir, Please refer to the correspondence resting with Shivhare’s letter numbers as mentioned above (Copies enclosed for ease of reference). In respect of the subject matter, Shivhare Road lines CA @ SLP(C) No. 2012/2011 3 (SRL) wish to submit as hereunder :
1. SRL, vide above referred letters, had made many requests to the Chief General Manager, CCI, NCR to release our payment which is wrongfully deducted from our bills. Also we made a request to CGM, CCI (NCR) to release the payment of our supplementary bills, which we have submitted to the terminal with a copy to them. We have made many efforts as well as personal meetings with CGM in his office on this subject matter but till date we have neither received any response from their office nor they released our due payment and closed the contract.
2. SRL respectfully submits that they have not received any response from CGM, CCI, NCR to the appeals made so far.
Hence to avoid further time delay and interest charges to be paid by CCI to SRL In terms of the contract agreement, SRL hereby gives notice of its intention to refer said disputes arising out of not responding of notified claim for resolution by Arbitration, Under Clause 25.1 on page no. 42 in Chapter 3 of the said contract. As per contract Managing Director of CCI shall nominate the sole Arbitrator not in any way connected with the contract/works. As per Arbitration Act, 1996, you are hereby requested to nominate the arbitrator within 30 days of receipt of this letter to settle all disputes pertaining to this contract, details of which shall be forwarded to the appointed arbitrator.
Hence, we respectfully request yourself to speed up the arbitration to settle our disputes.
Awaiting for your early and favourable response. Thanking you, Your faithfully, For Shivhare road lines, sd/-
Suresh C. Shivhare Business Partner Encl. : All letters/correspondence as referred above." CA @ SLP(C) No. 2012/2011 4
4. As per the arbitration clause, the party invoking arbitration is required to specify the dispute or disputes to be referred together with the amount or amount claimed in respect of each dispute. A close look at the communication dated November 5, 2008 invoking the arbitration clause shows that it does not specify any amount involved in the dispute nor it specifies any particular dispute(s) which was/were required to be referred to the arbitrator. The High Court has, by the impugned order, appointed a retired Judge of the High Court as the sole arbitrator. This is ex-facie not in conformity with the arbitration clause. Since the notice of demand for appointment of arbitrator for adjudication of disputes between the parties is not in accord with the arbitration Clause 25.3, in our view, the High Court was not justified in appointing the sole arbitrator outside the agreement. The designated Judge in exercise of his power under Section 11(6) of the Arbitration and Conciliation Act, 1996 proceeded on the ground that there was no response to the notice dated November 5, 2008 by the appellants within time but overlooked the fact that the above notice was not in accord with the arbitration agreement. CA @ SLP(C) No. 2012/2011 5
5. Accordingly, the impugned order is set aside. Civil Appeal is allowed as indicated above.
6. Although by office order dated July 22, 2010, the Managing Director of the appellant No. 1 has appointed Shri K. Narayan, Senior General Manager/Strategic Planning as the sole arbitrator to adjudicate all the issues raised by the respondent, but since the respondent has some reservation about the sole arbitrator appointed by the Managing Director, we direct the Managing Director to appoint fresh arbitrator within four weeks from today. The Managing Director shall ensure that the arbitrator so appointed has not dealt with the subject matter on administrative side in any manner.
7. No costs.
.............................................CJI. ( R.M. LODHA ) .................................................J. ( KURIAN JOSEPH ) NEW DELHI; .................................................J. JULY 7, 2014 ( ROHINTON FALI NARIMAN ) CA @ SLP(C) No. 2012/2011 6 ITEM NO.47 COURT NO.1 SECTION IVA S U P R E M E C O U R T O F I N D I A RECORD OF PROCEEDINGS Petition(s) for Special Leave to Appeal (C) No(s). 2012/2011 (Arising out of impugned final judgment and order dated 27/08/2010 in AC No. 06/2010 passed by the High Court Of M.P Bench At Gwalior) CONTAINER CORP.OF INDIA LTD.& ANR Petitioner(s) VERSUS M/S SHIVHARE ROAD LINES Respondent(s) (with appln. (s) for vacating stay and prayer for interim relief and office report) Date : 07/07/2014 This petition was called on for hearing today. CORAM :
HON’BLE THE CHIEF JUSTICE HON’BLE MR. JUSTICE KURIAN JOSEPH HON’BLE MR. JUSTICE ROHINTON FALI NARIMAN For Petitioner(s) Mr. Puneet Jain, Adv.
Ms. Christi Jain, Adv.
Ms. Pratibha Jain ,Adv.
For Respondent(s) Mr. S.K. Katriar, Sr. Adv.
Mr. Anshuman Ashok, Adv. for Dr. Kailash Chand ,Adv.
UPON hearing the counsel the Court made the following O R D E R Leave granted.
Appeal is allowed in terms of the signed order.
Pending application, if any, stands disposed of.
(RAJESH DHAM) (RENU DIWAN)
COURT MASTER COURT MASTER
(signed order is placed on the file)