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2024 DIGILAW 832 (PNJ)

Green Global Energy v. G. R. Infra Projects Ltd.

2024-05-10

G.S.SANDHAWALIA

body2024
JUDGMENT G.S. Sandhawalia, ACJ. The present petition under Section 11 of the Arbitration and Conciliation Act, 1996 (for short 'the Act') has been filed by the petitioner for appointment of independent sole arbitrator to adjudicate upon the disputes between the parties. 2. It is pointed out that as per the Letter of Intent dated 04.08.2018 (Annexure P-1), the work for design and construction of Delhi Meerut Expressway from Dasna to Meerut in the State of Uttar Pradesh on EPC Basis and for Design and installation of Solar system and highway lighting and dedicated 11 KV feeder for Highway Lighting (COS) was awarded to the petitioner. The said Letter of Intent executed at Gurugram provides for an arbitration clause which reads as under:- "In the event of any difference or dispute arising out of or in connection with this work order, the same shall be first amicably settled by mutual dialogue. If the parties fail to settle the difference or dispute arising out of or in connection with this work order (including interpretation of the terms thereof), the same shall be referred to arbitration. The Arbitration proceedings shall be conducted by a sole Arbitrator, Managing Director of GRIL and the award/decision of such arbitrator shall be final and binding upon both the parties. The venue of the arbitration shall be Udaipur. This contract is governed as per Law of India. However, the work shall not be stopped during the pendency of the proceedings and it shall be ensured that such work is preceded uninterruptedly". 3. In pursuance to the above, the work order (Annexure P-2) was executed between the parties but the same was terminated on 06.07.2019 vide Annexure P-11. The petitioner had objected to the illegal termination of the agreement vide letter dated 07.07.2019 (Annexure P-13) and putforth the steps it had already undertaken in pursuance of the work order and put the respondents to a notice that they have to go for arbitration as per the Arbitration and Conciliation Act of 1996. The respondents were put to a notice of 21 days to withdraw the termination order. The matter could not be amicably settled as noticed in the letter dated 22.08.2019 (Annexure P-17) and therefore, the respondents were put to notice that the petitioner was taking the next course of action. 4. The respondents were put to a notice of 21 days to withdraw the termination order. The matter could not be amicably settled as noticed in the letter dated 22.08.2019 (Annexure P-17) and therefore, the respondents were put to notice that the petitioner was taking the next course of action. 4. In reply to the petition, the stance taken is that the parties have agreed to the exclusive jurisdiction of the Court and venue of the arbitration at Udaipur. It is mentioned that the disputed amount exceeds Rs. 1 Crore and therefore, a panel of three arbitrators was required to be constituted. A reference was made to clause 44.4 of the General Conditions of Contract regarding the exclusion of jurisdiction which is appended as Annexure R-2 and the same reads as under:- "44.4 Arbitration Procedure:- Arbitration shall be conducted in accordance with Arbitration and Conciliation Act, 1996 and its subsequent amendments. If the disputed amount is less than INR. 1 Cr., the Arbitration Proceedings shall be conducted by a sole Arbitrator and if the disputed amount is more than INR 1 Cr. the proceedings shall be conducted by a panel of 3 Arbitrators. Arbitral Tribunal shall be appointed in accordance with the Arbitration and Conciliation Act, 1996. Venue of Arbitration shall be Udaipur and language shall be English. Courts in Udaipur shall have exclusive jurisdiction." 5. By way of filing a rejoinder (sic replication), the petitioner as such fell back on the definition of a Court as provided under Section 2 (e) of the Act of 1996 and the plea taken was that the registered office of the petitioner is in Mohali, Punjab and the branch office in Gurugram (Haryana) whereas the registered office of the respondent is in Ahmedabad (Gujarat) and also an office in Gurugram. The contract was executed for construction of the roads between Dasna and Meerut in the State of Uttar Pradesh and none of these locations fell within the jurisdiction of the Courts located at Udaipur and therefore, there was no ground whatsoever for fixing Udaipur as the exclusive jurisdiction. Learned counsel for the respondent on the other hand submitted that the head office of the respondent was Udaipur which was the reason as such of the exclusive clause. 6. Learned counsel for the respondent on the other hand submitted that the head office of the respondent was Udaipur which was the reason as such of the exclusive clause. 6. Learned counsel for the petitioner further averred that both the parties have their offices in Gurugram, Haryana and the petitioner having registered office at Punjab, therefore, this Court has the territorial jurisdiction and in view of the law laid down by the Apex Court in Perkins Eastman Architects DPC and another v. HSCC (India) Ltd. 2020(20) SCC 760 , the respondent as such now could not nominate the arbitrator as per the arbitration clause. 7. Learned counsel for the respondent has vehemently submitted that in view of the law laid down in Indus Mobile Distribution Private Ltd. v. Datawind Innovations Pvt. Ltd. and others 2017(7) SCC 678 , in arbitration proceedings the parties could exclude the jurisdiction as such and therefore, this Court would have no jurisdiction as such. 8. On the other hand, learned counsel for the petitioner has relied upon subsequent judgment of the Apex Court in M/s Ravi Ranjan Developers Pvt. Ltd. v. Aditya Kumar Chatterjee 2022 (2) RAJ 353, wherein Indus Mobile Distribution Pvt. Ltd.(supra) was also referred to. A perusal of the said judgment would go on to show that in similar circumstances the appointment of an arbitrator by the High Court at Calcutta on account of the terms of the arbitration agreement that the Arbitral Tribunal shall be at Calcutta was set aside by the Apex Court. The reason as such was that the works were being executed in Muzaffarpur (Bihar) and the development agreement as such had also been executed and registered at the said place. It is in such circumstances, the Apex Court came to a conclusion that once no part of cause of action has arisen within the jurisdiction of the Calcutta High Court, merely because the respondent has carried out his business within the jurisdiction of that High Court, the said Court would not get the jurisdiction. It is in such circumstances, the Apex Court came to a conclusion that once no part of cause of action has arisen within the jurisdiction of the Calcutta High Court, merely because the respondent has carried out his business within the jurisdiction of that High Court, the said Court would not get the jurisdiction. While relying upon a judgment of three Judges Bench of the Apex Court in Mankastu Impex Private Ltd. v. Airvisual Ltd. (2020) 5 SCC 399 , it was held that intention and conduct of the parties will determine whether the Courts will have exclusive jurisdiction to oversee the arbitration proceedings and the seat normally carries with it the choice of that country's arbitration/curial law. Resultantly, the order of appointment of Arbitrator passed by the Calcutta High Court was set aside. The said judgment squarely covers the issue in question. The relevant part reads as under:- "47. It is well settled that, when two or more Courts have jurisdiction to adjudicate disputes arising out of an arbitration agreement, the parties might, by agreement, decide to refer all disputes to any one Court to the exclusion of all other Courts, which might otherwise have had jurisdiction to decide the disputes. The parties cannot, however, by consent, confer jurisdiction on a Court which inherently lacked jurisdiction, as argued by Mr. Sinha. 48. In this case, the parties, as observed above did not agree to refer their disputes to the jurisdiction of the Courts in Kolkata. It was not the intention of the parties that Kolkata should be the seat of arbitration. Kolkata was only intended to be the venue for arbitration sittings. Accordingly, the Respondent himself approached the District Court at Muzaffarpur, and not a Court in Kolkata for interim protection under Section 9 of the A&C Act. The Respondent having himself invoked the jurisdiction of the District Court at Muzaffarpur, is estopped from contending that the parties had agreed to confer exclusive jurisdiction to the Calcutta High Court to the exclusion of other Courts. Neither of the parties to the agreement construed the arbitration clause to designate Kolkata as the seat of arbitration. We are constrained to hold that Calcutta High Court inherently lacks jurisdiction to entertain the application of the Respondent under Section 11(6) of the Arbitration Act. Neither of the parties to the agreement construed the arbitration clause to designate Kolkata as the seat of arbitration. We are constrained to hold that Calcutta High Court inherently lacks jurisdiction to entertain the application of the Respondent under Section 11(6) of the Arbitration Act. The High Court should have decided the objection raised by the Appellant, to the jurisdiction of the Calcutta High Court, to entertain the application under Section 11(6) of A&C Act, before appointing an Arbitrator. 49. These appeals are therefore, allowed and the impugned orders of appointment of Arbitrator and dismissal of the review application are set aside. The appointment of the learned Arbitrator is set aside on the ground that the order of his appointment is without jurisdiction and in view of the objection to his appointment raised by the Appellant. It is made absolutely clear that this order is not to be construed as any aspersion on the learned Arbitrator appointed by the Calcutta High Court, or the manner in which he has conducted the proceedings so far.... (emphasis supplied)". 9. In such circumstances, keeping in view the fact that the agreement as such between the parties was executed at Gurugram where both the parties as such have their offices and the work order of the parties pertained to Uttar Pradesh and so no cause of action arose at Udaipur, which would also be clear from the documentations placed on record that the respondent is also having a Corporate office at Novus Tower, 2nd Floor, Gurugram. It is also the categorical case as such of the petitioner also that it has also an office at Gurugram, thus this Court is of the considered opinion that this Court would have the territorial jurisdiction to entertain the petition. Accordingly, the objection raised by the respondent regarding jurisdiction of this Court is rejected. Since the parties at having their offices at Gurugram, Justice Ramendra Jain, a former Judge of this Court, settled at Gurugram is appointed as Arbitrator to adjudicate upon the disputes between the parties. 10. Let necessary declaration as required under Section 12(5) of the Arbitration and Conciliation Act, 1996 be obtained from Justice Ramendra Jain, a former Judge of this Court, for 24.05.2024 by e-mail and be placed on record. 11. List on 24.05.2024.