Delhi High Court
G. Premjee Trading Pvt. Ltd. vs Ashoka Alloys Limited on 21 September, 1998
Equivalent citations: AIR1999DELHI83, 1998(47)DRJ262, AIR 1999 DELHI 83, (1998) 33 ARBILR 373, (1998) 47 DRJ 262, (1998) 76 DLT 415, (1999) 1 RECCIVR 620
ORDER M.K. Sharma, J.
1. This is a petition under Section 11 of the Arbitration and Conciliation Act, 1996, praying for appointment of an arbitrator in accordance with the provisions of Section 11 of the said Act for adjudication and resolving the disputes arising between the parties.
2. The petitioner has filed the present petition contending, inter alia, that a Sale and Purchase Contract was entered into between the petitioner and the respondent on 25th July, 1995 wherein, the respondent agreed to purchase 826, 234 Metric Tonnes of Shredded Scrap consisting of homogeneous Iron and Steel Scrap as per the specifications at the price mentioned in the said Contract. As per clause D of the said Contract, the shipment was to be effected by 31st July, 1995 and as per Clauses D and F of the Contract, the letter of Credit was to be established within seven days of signing of the Contract.
3. It is alleged that the respondent committed breach of the Contract by failing to establish Letter of Credit and also failed to take delivery of the goods. Under the aforesaid circumstances, according to the petitioner, disputes have arisen between the parties out of the aforesaid Contract and, therefore, the same is required to be adjudicated upon through the process of arbitration in terms of the arbitration agreement between the parties.
4. The respondent after service of notice appeared in the matter, but, has not filed any reply to the aforesaid petition. However, its counsel appeared during the course of arguments and contested the petition mainly on three counts, namely, (a) that the person instituting the present proceedings has no authority to institute the proceedings, nor was he competent to sign and verify the pleadings; (b) that there was no concluded contract between the parties and that the alleged contract relied upon by the petitioner was merely a proposal and cannot be termed as a concluded contract; (c) that the petitioner has failed to identify and indicate the disputes alleged to have arisen between the parties in the petition and, thus the petition is not maintainable and is liable to be rejected.
In view of the aforesaid objection taken by the counsel for the respondent to the relief sought for by the petitioner in the present petition, let me consider the merit of the aforesaid objections raised in the present petition.
5. With regard to the authority of Mrs. Girija Bhan in instituting the present petition and signing and verifying the pleadings, the said objection was raised only at the time of arguments. Counsel appearing for the petitioner sought for four days time to file the Power of Attorney giving authority by the petitioner to said Mrs. Girija Bhan to institute the present proceedings, which was allowed by this Court on 7-9-1998. In pursuance thereof, the petitioner has placed on record a Power of Attorney executed by the petitioner in favour of Mrs. Girija Bhan appointing her as the Attorney of the petitioner for instituting legal proceedings against the respondent herein. The said Power of Attorney clearly empowers Mr. Girija Bhan to institute the present proceedings and also to sign and verify the pleadings and thus, the objection raised by the respondent in that regard is found to be without any merit.
6. With regard to the objection that the Sale and Purchase Contract dated 25th July, 1995 which contains the Arbitration Agreement is not a concluded contract and is merely a proposal, I have heard the counsel appearing for the parties. A perusal of the said document dated 25th July, 1995 would indicate that the same is intended to be a concluded contract, inasmuch as, the said document was categorised as the Sale and Purchase Contract. Under the said Contract, the respondent agreed to purchase and the petitioner agreed to sell the materials specified therein on the terms and conditions mentioned in the Contract. The said documents contain various clauses specifying the quantity to be sold and purchased. The price of the goods and the mode of payment as also the manner in which goods would be shipped are fully mentioned in the said Contract including the terms and conditions of shipment. The said Contract also contains an Arbitration Agreement stating that all disputes arising out of the agreement could be settled amicably failing which, by arbitration in New Delhi.
Thus, the contents of the said document clearly prove and establish that the aforesaid document was intended to be a concluded Contract between the parties and they are bound by the terms and conditions of the same. The said Contract contains the Arbitration Agreement by which the parties are governed and bound. The objection of the respondent that the petitioner has not indicated the disputes allegedly arising between the parties is also found to be without merit, after a bare perusal of the contents of the petition filed by the petitioner, which are examined hereunder.
The petitioner has stated that a breach of the Contract has been committed by the respondent as it failed and neglected to establish a Letter of Credit and failed and neglected to take delivery of the goods and thus disputes and differences have arisen between the parties and amounts are due to the petitioner from the respondent for the Cargo shipped to Kandla as per the terms of the Contract entered between the parties and that the loss and damages suffered, by the plaintiff are amounting to approximately Rs. 10,95,000/-.
7. Thus, in my considered opinion, area of disputes and differences have been clearly stated in the petition filed by the petitioner and the same are required to be adjudicated upon through the process of arbitration in terms of Clause 1(5) of the Contract. The aforesaid Arbitration Clause, however, does not indicate as to who would be the Arbitrator to adjudicate upon the disputes arising between the parties.
8. Section 11 of the Arbitration and Conciliation Act deals with the procedure for appointment of arbitrators. It provides that the parties are free to agree on a procedure for appointment of arbitrator or arbitrators. It is further provided in the aforesaid provision that if the parties have agreed upon the appointment procedure for appointment of the arbitrator then the said procedure should be followed initially. However, in the present case arbitration proceeding no such procedure has been prescribed for appointment of an arbitrator. Subsection (5) of Section 11 provides the procedure for appointment of a sole arbitrator. If the party fails to agree upon and appoint an arbitrator, the Court shall have power to appoint an arbitrator. Exercising the said power, I appoint Mr. Justice Jaspal Singh, a retired Judge of this Court, as the Arbitrator in the present case to adjudicate upon and decide the disputes arising in the present case between the parties. It shall be open to the learned arbitrator to fix his remuneration. The learned arbitrator may enter into the reference at his earliest convenience and proceed with the matter in accordance with law.
With the aforesaid observations and directions, the present petition stands disposed of.