Chitale & Son, Represented by Kapil S. Chitale v. Arshakerala Ayurveda Medical Innovations Private Limited, Kerala
2022-03-02
M.SUNDAR
body2022
DigiLaw.ai
JUDGMENT (Prayer: Arbitration Original Petition filed under Section 11(6) of the Arbitration and Conciliation Act, 1996, to appoint the respondent’s nominee Arbitrator in terms of the Agreement dated 28.10.2016 to adjudicate the disputes that have arisen between the Petitioner and the Respondent.) 1. This order will dispose of the captioned Arb OP. This order has to be read in conjunction with and in continuation of earlier proceedings made by this Court in the previous two listings on 31.01.2022 and 22.02.2022, which read as follows: ‘Proceedings dated 31.01.2022 Issue notice to the respondent, returnable on 22.02.2022. Private note is also permitted. Proceedings dated 22.02.2022 Mr.K.Sarveshwar, learned counsel of M/s.Giridhar and Sai (Law Firm) on behalf of the petitioner is before this virtual Court. 2. Captioned Arb OP has been presented in this Court on 26.11.2021 under Section 11(6) of ‘The Arbitration and Conciliation Act, 1996 (Act No.26 of 1996)’ [hereinafter ‘A and C Act’ for the sake of brevity]. 3. Hon’ble Predecessor Judge in and by proceedings made in the listing on 31.01.2022 has ordered notice and permitted private notice also. Respondent has been duly served. Mr.H.Siddarth, learned counsel with address for service at No.48, Second Line Beach Road, Parrys, Chennai-600 001 (Mobile: 98846 72733), who is before this Court submits that he has instructions to file vakalatnama on behalf of the lone respondent along with his co-counsel. Learned counsel submits that vakalatnama will be filed within a week i.e., on or before 01.03.2022. List on 02.03.2022.’ 2. Pursuant to the aforementioned earlier proceedings made in the previous listing on 22.02.2022, learned counsel has entered appearance on behalf of the lone respondent and Mr.H.Siddarth, learned counsel is before this Court on behalf of the lone respondent. 3. Mr.K.Sarveshwar, learned counsel of M/s.Giridhar and Sai (Law Firm) on behalf of the sole petitioner is before this Court. 4. Captioned Arb OP is predicated on Clause 10 of an agreement dated 28.10.2016 between the petitioner and respondent. This agreement is captioned ‘CONTRACT OF AGREEMENT-ARCHITECTURAL, INTERIOR DESIGN AND LANDSCAPE SERVICES’. This 28.10.2016 agreement shall be referred to as ‘said primary agreement’. Clause 10 of said primary agreement reads as follows: ‘10. DISPUTE RESOLUTION THROUGH ARBITRATION In the event of any dispute between the PARTIES, such dispute shall be resolved through arbitration by a Sole Arbitrator agreed upon by the PARTIES.
This 28.10.2016 agreement shall be referred to as ‘said primary agreement’. Clause 10 of said primary agreement reads as follows: ‘10. DISPUTE RESOLUTION THROUGH ARBITRATION In the event of any dispute between the PARTIES, such dispute shall be resolved through arbitration by a Sole Arbitrator agreed upon by the PARTIES. Any such arbitration shall be held and conducted as per the provisions of the Arbitration and Conciliation Act, 1996. In case the parties are not able to reach a consensus to decide a person as a Sole Arbitrator, each Party shall appoint one Arbitrator each, and these two (2) chosen Arbitration shall jointly select an Arbitrator who shall be the Umpire to the proceeding. The decision of the Umpire Arbitrator shall be final and binding on the Parties. The term “Court“ occurring in the relevant clause of the Indian Arbitration and Conciliation Act shall, in respect of the Arbitration proceedings be in reference to the Civil/Courts in Chennai City.’ 5. Aforementioned Clause 10 of said primary agreement serves as an arbitration agreement between the petitioner and the respondent. In other words aforementioned Clause 10 is the arbitration agreement between the petitioner and respondent being arbitration agreement within the meaning of Section 2(1)(b) read with Section 7 of A and C Act. 6. Before proceeding further, it is made clear that short forms and short references used in the proceedings made in the previous listings shall continue to be used in the instant proceedings also. The proceedings made in the earlier listings [extracted and reproduced supra] shall be read as an integral part and parcel of this order. 7. There is no disputation or disagreement about the existence of the aforementioned arbitration agreement between the parties. Therefore, this Court reminds itself of Mayavati Trading principle i.e., ratio laid down by Hon’ble Supreme Court in Mayavati Trading Pvt. Ltd., Vs. Pradyuat Deb Burman reported in (2019) 8 SCC 714 )]. Relevant paragraph is paragraph 10 and the same reads as follows: ‘10. This being the position, it is clear that the law prior to the 2015 Amendment that has been laid down by this Court, which would have included going into whether accord and satisfaction has taken place, has now been legislatively overruled.
Relevant paragraph is paragraph 10 and the same reads as follows: ‘10. This being the position, it is clear that the law prior to the 2015 Amendment that has been laid down by this Court, which would have included going into whether accord and satisfaction has taken place, has now been legislatively overruled. This being the position, it is difficult to agree with the reasoning contained in the aforesaid judgments, as Section 11(6-A) is confined to the examination of the existence of an arbitration agreement and is to be understood in the narrow sense as has been laid down in the judgment in Duro Felguera SA.’ (underlining made by this Court to supply emphasis and highlight) 8. The above, broadly stated is the scope of a legal drill under Section 11 of A and C Act. 9. In the light of the narrative thus far, this Court now proceeds to appoint a sole Arbitrator. In this regard, it is made clear that the law is well settled that a Court in a Section 11 legal drill can downsize the number of members of an Arbitral Tribunal. In the case on hand arbitration agreement provides for arbitration by a three-Member Arbitral Tribunal, but owing to the nature of arbitrable disputes, quantum of claim and other attendant determinants it is deemed appropriate to accede to the request to downsize the proposed arbitral tribunal and appoint a sole Arbitrator. 10. In the light of the narrative thus far, Hon’ble Mr.Justice G.Rajasuria, Former Judge, High Court of Madras residing at No.31, III Cross Street, Brindavanam, Puducherry-605 013 [Mobile: 94450 00864] is appointed as Sole Arbitrator. Hon’ble Sole Arbitrator is requested to enter upon reference qua arbitrable disputes that have arisen between the parties from and out of said primary agreement, adjudicate the same in accordance with the Madras High Court Arbitration Proceedings Rules, 2017 and learned Arbitrator’s fee shall be as per Madras High Court Arbitration Centre (MHCAC) (Administrative Cost and Arbitrator’s Fees), Rules 2017 at ‘Madras High Court Arbitration Centre under the aegis of this Court’ [‘MHCAC’]. Captioned Arb OP disposed of on above terms. There shall be no order as to costs.