ION Exchange (India) Ltd. v. Lanco Infratech Ltd. , Hyderabad
2014-03-26
M.JAICHANDREN, M.VENUGOPAL
body2014
DigiLaw.ai
Judgment M. Venugopal, J. 1. The Appellant/2nd Defendant has focussed the instant O.S.A.No.184 of 2011 as against the order dated 09.11.2010 in Application No.4227 of 2005 in C.S.No.650 of 2005 passed by the Learned Single Judge. The Appellant/Plaintiff has projected the present O.S.A.No.69 of 2011 as against the order dated 09.11.2010 in Application No.5362 of 2007 in C.S.No.650 of 2005 passed by the Learned Single Judge. 2. The Learned Single Judge, while passing the common order, dated 09.11.2010, in Application No.4227 of 2005 & Application No.5362 of 2007 in C.S.No.650 of 2005, in paragraph Nos.6 and 8, had observed as follows: "6. It is not in dispute that the defendants have placed the work order dated 21.9.1999 and the purchase order dated 5.4.1999 to the plaintiff. It is seen in page Nos.25 and 26 of the typed set that if amicable settlement cannot be reached, then all disputed issues shall be settled by arbitration as provided in the Clause. 8. Therefore, I am of the view that the Arbitration clause mentioned in the agreement has been admitted by the plaintiff/1st respondent himself. Of course, even if the second respondent himself had failed to nominate the Arbitrator, the plaintiff/1st respondent ought to have invoked Section 11 of the Arbitration and Conciliation Act and he ought not to have filed the suit before this Court. Therefore, the plaintiff/1st respondent has to file a proper petition before the appropriate forum to redress his grievance. Therefore, the suit filed by the plaintiff is a premature one. Hence, Application No.5362 of 2007 for unconditional leave to defend the summary suit in C.S.No.650 of 2005 is allowed." 3. Admittedly, as seen from the Purchase Order for water treatment plant dated 05.04.1999, Clause 49.0.0 deals with 'Settlement of Disputes'. Further, Clause 49.1.0 enjoins that 'Any disputes or differences including those considered as such by only one of the parties arising out of or in connection with the ORDER shall be to the extent possible settled amicably between the parties'. Added further, Clause 49.2.0 mentions that 'If amicable settlement cannot be reached, then all disputed issues shall be settled by arbitration as provided in the Clause'.
Added further, Clause 49.2.0 mentions that 'If amicable settlement cannot be reached, then all disputed issues shall be settled by arbitration as provided in the Clause'. That apart, Clause 50.0.0 categorically states that 'All disputes/differences whatsoever, which shall arise between parties hereto during the continuance of this Order/Contract or afterwards, touching this 'Order/Contract or the construction or application thereof or any clause contained on the rights, duties, liabilities of either party in connection therewith, shall be referred to a sole arbitrator to be appointed with the consent of both the parties. The place of arbitration shall be Chennai and the arbitrator appointed shall have held the office of a Judge of any Indian High Court or Supreme Court of India' etc. 4. A mere running of the eye over the contents of Clause 4.8 of the Work Order for erection & commissioning, dated 21.09.1999, under the caption 'Arbitration' pellucidly indicates that 'Arbitration shall be in accordance with Indian Laws. The arbitration venue shall be at Chennai'. 5. It is to be pointed out that in the matter of settlement of dispute by Arbitration, the agreement executed by the parties gain much importance and an agreed procedure for appointing an Arbitrator has been placed on a high altar and has to be given preference to any other method for securing appointment of an Arbitrator. To put it succinctly, the will of the parties must prevail as reflected in the Arbitration Agreement. 6. It is to be borne in mind that the 1st Respondent/Plaintiff (Appellant in O.S.A.No.69 of 2011) had not resorted to the invocation of Section 11 of the Arbitration and Conciliation Act, 1996, relating to the Appointment of Arbitrator, instead, it filed the Civil Suit No.650 of 2005 straight away on the file of this Court against the Defendants (Respondents in O.S.A.No.69 of 2011) for recovery of a sum of Rs.1,08,99,718/- with interest at 18% p.a. etc. and the said conduct of the 1st Respondent/Plaintiff, in the considered opinion of this Court, is not only premature, futile and otiose, but also the same is per se not maintainable, in the eye of law. 7. That apart, during the course of hearing of these Original Side Appeals, by consent of both sides, this Court is perforced to appoint Thiru.
7. That apart, during the course of hearing of these Original Side Appeals, by consent of both sides, this Court is perforced to appoint Thiru. K.P. Sivasubramaniam, (Retired Judge of the Madras High Court), No.47, Pulla Avenue, Shenoy Nagar, Chennai – 30 as the Sole Arbitrator to resolve the disputes arising between the Appellant on the one hand and the Respondents on the other, in connection with the Purchase Orders dated 05.04.1999 and 17.09.1999 respectively and the Work Order dated 21.09.1999, which are binding on the parties to the lis. The Learned Arbitrator shall enter upon the Reference and after issuing notice to the parties and upon hearing them, pass an Award, as expeditiously as possible at any rate, within a period of three months from the date of issuance of notice. The Learned Arbitrator is at liberty to determine the remuneration and other incidental expenses to the Arbitration, which shall be borne by the parties equally. These Original Side Appeals are accordingly disposed of. No costs. Consequently, connected M.P.No.1 of 2011 is closed. 8. Inasmuch as the 1st Respondent/Plaintiff (Appellant in O.S.A.No.69 of 2011) had filed the Suit C.S.No.650 of 2005, before this Court against the Defendants, is not maintainable for the reasons assigned by this Court in paragraph No.6 of this Judgment as aforesaid and in view of the fact that this Court, in the present Appeals, by consent of both sides, appointed the Learned Arbitrator, as a logical corollary, this Court comes to an inevitable and irresistible conclusion that the Suit filed by the 1st Respondent/Plaintiff is per se not maintainable and resultantly, the Suit C.S.No.650 of 2005 is dismissed without costs, in furtherance of substantial cause of Justice.