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2017 DIGILAW 448 (CAL)

Machino Motors Private Limited v. MAC Developers Private Limited

2017-05-04

I.P.MUKERJI

body2017
JUDGMENT : I.P. MUKERJI, J. 1. The parties entered into an agreement on 4th February, 2014. Clause 23 of the agreement is the arbitration clause. It is in the following terms: "The parties shall attempt to settle the disputes or differences in relation to or arising out of or touching this Agreement or the validity, interpretation, construction, performance, breach or enforceability of this Agreement (collectively Disputes) by way of negotiation. To this end, each of the parties shall use its reasonable endeavors to consult or negotiate with the other Party in good faith and in recognizing the Parties' mutual interests and attempt to reach a just and equitable settlement satisfactory to both the parties. If the parties fail to settle the Disputes by negotiation within 60(sixty) days from the date on which negotiations are initiated, the Disputes, if not solved shall be referred to, and finally resolved by arbitration by an arbitrator appointed by the Owner and an arbitrator appointed by the developer both the arbitrators shall appoint a third arbitrator in terms of the Arbitration and Conciliation Act, 1996, and Rules and amendments made there under. The arbitration proceedings shall be conducted at Kolkata and in English." The agreement was for development of immovable property. 2. This agreement was followed up by various supplemental agreements executed by and between the parties on diverse dates. 3. Mr. Dwipayan Basu Mallick for the respondent submitted that the supplemental agreement did not contain an arbitration clause. Even if it referred to the parent agreement, the arbitration clause had to be specifically incorporated according to the decision of the Hon'ble Supreme Court in M.R. Engineers and Contractors Private Limited v. Som Datt Builders Limited reported in (2009)7 Supreme Court Cases 696: (2009) 3 Supreme Court Cases (Civ) 271. He also submitted referring to para-24 (iii) of the above judgment that mere reference to certain terms of the parent agreement like its formation and execution would not do, but specific reference to and incorporation of the arbitration clause had to be made. 4. I cannot accept such submission in view of clause 1a of the supplemental agreement dated 18th July, 2014 at page 175 of the petition. It is in the following terms: "This Agreement shall be construed as supplementary to the Development Agreement dated 04.02.14. 4. I cannot accept such submission in view of clause 1a of the supplemental agreement dated 18th July, 2014 at page 175 of the petition. It is in the following terms: "This Agreement shall be construed as supplementary to the Development Agreement dated 04.02.14. To all intents and for all purposes, this agreement shall form a part and parcel of the development agreement dated 04.02.14 executed and/or entered into between the parties hereto." 5. When the supplemental agreement states that it would "form a part and parcel of the development agreement dated 04.02.2014 executed and/or entered into between the parties hereto", it necessarily means that all the terms and conditions of the agreement dated 4th February, 2014 including the arbitration clause are incorporated in the supplemental agreement. Therefore, the part incorporated was the whole parent agreement and did not merely relate to execution, performance etc. of the underlying or parent contract. 6. In my opinion, there are substantial disputes and differences between the parties pleaded in paragraphs 23 - 39 of the petition that are referable to arbitration in terms of the arbitration clause. 7. Mr. Justice Tapen Sen a retired Judge of this Court is appointed as Arbitrator to adjudicate upon the disputes between the parties contained in this petition and to be raised in the statement of claim, the counter statement/counter claim to be filed by the parties according to the direction of the learned Arbitrator. 8. The Arbitrator will be entitled to fees of 2000 G.Ms. per sitting to be shared equally by the parties. He shall appoint a clerk and stenographer whose remuneration will be borne by the parties in equal share. 9. The learned Arbitrator is requested to make and publish his award within one year of entering upon the reference. This Section 11 application is accordingly allowed.