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2016 DIGILAW 599 (JK)

Chenab Const. Co. Ltd. v. NHEPC

2016-11-22

DHIRAJ SINGH THAKUR

body2016
Judgment 1. This petition has been filed under Section 11(6) of the Jammu and Kashmir Arbitration and Conciliation Act, 1997 (for short Act of 1997), for appointment of an arbitrator in terms of Clause 55 of the Contract agreement which is reproduced herein below:— “Clause 55: Arbitration: 55.1: Except as otherwise provided, in clause 53 herein before, all questions, disputes or differences in respect of which the decision has not been final and conclusive, arising between the contractor and the Corporation) in relation to or in connection with the contract shall be referred for arbitration in the manner provided as under and to the sole arbitrator appointed as follows:— 55. 8: Subject to aforesaid modifications, Arbitration Act 1940) or any statutory modifications or re-enactment thereof and the rules made thereunder and for time being in force shall apply to the Arbitration proceedings under this clause.” 2. A perusal of the aforementioned Clause would show that the disputes between the parties were to be referred to the sole arbitrator, to be settled in terms of the provisions of the Arbitration Act of 1940 or any statutory modifications, re-enactment or the rules made thereunder. Admittedly, the Arbitration Act, 1940, was followed by the Arbitration and Conciliation Act, 1996, in the rest of the country except the State of Jammu and Kashmir, which has its own Act i.e. the Jammu and Kashmir Arbitration and Conciliation Act, 1997. 3. Learned counsel for the respondents raised an objection that the present petition is not maintainable before this court as according to the Arbitration Clause aforementioned, the parties are to be governed by the Arbitration and Conciliation Act, 1996 (for short, Act of 1996). 4. The short issue that requires to be considered is as to whether this court has jurisdiction to entertain the present petition and appoint an arbitrator in terms of the provisions of the Act of 1997 when the parties have agreed that the arbitration would. be governed by the provisions of the Act 1940/1996. 5. Admittedly, only parts I, III and IV of the Act of 1996 insofar as it relates to international commercial arbitration or, as the case may be international commercial conciliation are applicable to the state of Jammu and Kashmir. Part-Il of the Central Act of 1996 is applicable insofar as it pertains to enforcement of foreign awards. 5. Admittedly, only parts I, III and IV of the Act of 1996 insofar as it relates to international commercial arbitration or, as the case may be international commercial conciliation are applicable to the state of Jammu and Kashmir. Part-Il of the Central Act of 1996 is applicable insofar as it pertains to enforcement of foreign awards. Other than the above, the provisions of the Act of 1997 governs arbitration matters in the State of Jammu and Kashmir. 6. In National Thermal Power Corporation v. Singer Company and Ors., (1992) 3 SCC 551 , the Apex Court held as under:— “25. The parties have the freedom to choose the law governing an international commercial arbitration agreement. They may choose the substantive law governing the arbitration agreement as well as the procedural law governing the conduct of the arbitration. Such choice is exercised either expressly or by implication. Where there is no express choice of the law governing the contact as a whole, or the arbitration agreement in particular, there is, in the absence of any contrary indication a presumption that the parties have intended that the proper law of the contract as well as the law governing the arbitration agreement are the same as the law of the country in which the arbitration is agreed to be held. On the other hand, where the proper law of the contract is expressly chosen by the parties, as in the present case, such law must, in’ the absence of an unmistakable intention to the contrary, govern the arbitration agreement which, though collateral or ancillary to the main contract, is nevertheless a part of such contract. 7. Although the dispute in the judgment (supra) pertained to an international arbitration, yet the principles to some extent would apply to the facts of the present case as well. In the present case, the parties have specifically agreed to the application of the laws, which would govern the arbitration agreement and that was the Arbitration and Conciliation Act, 1940, which stood repealed by the Act of 1996, which does not, admittedly, extend to the State of Jammu and Kashmir. In the present case, the parties have specifically agreed to the application of the laws, which would govern the arbitration agreement and that was the Arbitration and Conciliation Act, 1940, which stood repealed by the Act of 1996, which does not, admittedly, extend to the State of Jammu and Kashmir. This court exercises its power under Section 11 (6) as a Court as defined under the Jammu and Kashmir, Arbitration and Conciliation Act, 1997 and thus, would not enforce the rights of a party for appointment of an arbitrator when they specifically agreed to be governed by the provisions of the 1996 Act. 8. For the reasons mentioned above, it is held that this court has no jurisdiction to entertain the present petition, which is accordingly dismissed. The petitioner would be at liberty to approach the appropriate forum in accordance with law.