Back
SUPREME COURT OF INDIA
Sanjiv Khanna, Bela M. Trivedi, JJ.
M/s. Premier Sea Foods Exim Private Limited – Appellant
Versus
M/s Caravel Shipping Services Private Limited – Respondent
Civil Appeal No. 195 of 2022 (@SLP (C) No. 11350 of 2020)
Decided On : 06-01-2022
Arbitration and Conciliation Act, 1996 - Section 8, Section 11, Section 37, Section 34 The court analyzed the provisions of the Arbitration and Conciliation Act, 1996, particularly Section 8, Section 11, Section 37, and Section 34. The court held that the appellant is entitled to raise its claims before the arbitrator, even though the application under Section 8 was initially dismissed. The court also held that the objection/appeal under Section 34 is maintainable, even if the appeal under Section 37 is not maintainable. The court clarified that the respondent can raise all defenses against the counter claim, including limitation.
Fact of the Case:
The appellant filed a suit for recovery of money against the respondent. The respondent filed an application under Section 8 of the Arbitration Act, which was dismissed. The respondent then filed an application under Section 11 of the Arbitration Act in another court, which was allowed. This led to conflicting orders. The appellant filed a counter claim before the arbitrator but later withdrew it. The appellant then applied for revival of the counter claim, which was rejected by the arbitrator. The High Court dismissed the application for condonation of delay. The appellant appealed to the Supreme Court, which held that the appellant is entitled to revive the counter claim. The Court directed the appellant to pay costs to the respondent and clarified that the respondent can raise all defenses against the counter claim, including limitation. The Court did not express any opinion on the merits of the case.
Finding of the Court:
The Court analyzed the conflicting orders and held that the appellant is entitled to raise its claims before the arbitrator. The Court found that the appellant had proceeded on legal advice and withdrew the counter claim to avoid submitting to the jurisdiction of the arbitrator. The Court held that the arbitrator was wrong in rejecting the application for revival of the counter claim. The Court also held that even if the appeal under Section 37 is not maintainable, the objection/appeal under Section 34 is maintainable. The Court directed the appellant to pay costs to the respondent and clarified that the respondent can raise all defenses against the counter claim, including limitation.
Ratio Decidendi: The appellant is entitled to revive its counter claim before the arbitrator. The objection/appeal under Section 34 is maintainable even if the appeal under Section 37 is not maintainable. The respondent can raise all defenses against the counter claim, including limitation.
Result: The appeal is allowed. The appellant is directed to pay costs to the respondent. The appellant is entitled to revive its counter claim before the arbitrator. The respondent can raise all defenses against the counter claim, including limitation.
ORDER
1. Leave granted.
2. The appellant M/S Premier Sea Foods Exim Private Limited in 2009 had filed the suit for recovery of Rs. 26,53,593/- (Rupees Twenty Six Lakhs Fifty Three Thousand Five Hundered and Ninety Three Only) along with future interest @ 11.5 per cent per annum against the respondent M/S Caravel Shipping Services Private Limited before the Subordinate Judges Court, Kochi.
3. The respondent upon service of summons in the suit had filed an application under Section 8 of the Arbitration and Conciliation Act, 1996 [hereinafter referred to as the Arbitration Act], which application was dismissed by the Subordinate Judges Court, Kochi, vide order dated 8th January, 2013. The appeal preferred by the respondent before the High Court of Kerala also dismissed, vide order dated 8th September, 2015. Review application preferred by the respondent before the High Court of Kerala suffered dismissal vide order dated 14th June, 2016.
4. The respondent had filed written statement before the Subordinate Judges Court, Kochi in December 2015.
5. The respondent, however, challenged the review order dated 14th June, 2016 before this Court in SLP(C) Nos. 31101-31102 of 2016, which petition was allowed vide order dated 29th October, 2018. The effect, thereof, was that the proceedings in the suit could not be proceed, the matter having been referred to arbitration, the appellant is to raise his claim before the arbitrator.
6. In 2012, the respondent, even during the pendency of the application under Section 8 of the Arbitration Act, had filed an application under Section 11 of the Arbitration Act before the High Court of Madras. Notwithstanding the order dated 8th January, 2013 rejecting the application under Section 8 of the Arbitration Act passed by the Subordinate Judges Court, Kochi, the High Court of Madras allowed the application under Section 11 vide judgment dated 9th January, 2015. This gave rise to a very peculiar situation as there were two conflicting orders and judgments of the courts of competent jurisdiction.
7. Upon the order dated 9th January, 2015 passed by the High Court of Madras, the respondent filed a claim petition before the arbitrator. On being served, the appellant, it appears, was advised to file his written statement as well as counter claim before the arbitrator. Subsequently, on legal advise, the appellant withdrew the counter claim before the arbitrator stating that the counter claim was subject matter of the civil suit filed by the appellant before the Subordinate Judges Court, Kochi. As already noticed above, the application filed by the respondent under Section 8 of the Arbitration Act for reference to arbitration was dismissed by the Subordinate Judges Court, Kochi vide order dated 8th January, 2013, which order had been affirmed by the High Court of Kerala vide order dated 8th September, 2015.
8. After order dated 29th October 2018 passed by this Court allowing the application under Section 8 of the Arbitration Act filed by the respondent, the appellant made an application for revival of the counter claim before the arbitrator. The arbitrator however, rejected the application vide order dated 14th May, 2019 on the ground that the appellant had earlier filed and withdrawn its counter claim without any liberty to revive the counter claim. This order of the arbitrator was made subject matter of challenge in the petition under Section 37(2) of the Arbitration Act along with an application for condonation of delay of 84 days. The application for condonation of delay has been dismissed by the impugned order passed by the High Court of Judicature at Madras dated 6th December, 2019. The impugned order while dismissing the application for condonation has elaborately gone into merits and has held that the appellant was rightly not permitted to revive the counter claim before the arbitrator. The primary reason being that the appellant had withdrawn the counter claim before the arbitrator on 21st August, 2015.
9. We have
The right of the petitioner to file counter-claims exists independent of any liberty granted by the Arbitral Tribunal, and the decision of the Arbitral Tribunal can be challenged under Section 34 of ....
The right to file a counter-claim exists independent of any liberty granted by the Arbitral Tribunal, and an interim award is susceptible to challenge under Section 34 of the 1996 Act.
The right to file counter-claims exists independent of any liberty granted by the arbitral tribunal, and the tribunal can reject counter-claims on various grounds. The definition of 'interim award' a....
The withdrawal of an amendment application does not invalidate a previously filed counter claim that is included in the arbitration reference.
The court emphasized that an elaborate enquiry into the maintainability of the claims sought to be agitated by the petitioner is not appropriate at the stage of proceedings under Section 11 of the Ac....
When arbitration clause speaks of disputes to be settled by way of arbitration that includes claim, counter claim, set off, etc. and it is not required that arbitration clause speaks specifically abo....
The right to file counter-claims in arbitration is independent of previous permissions, and decisions rejecting such claims qualify as interim awards subject to challenge under Section 34 of the Arbi....
The Court upheld the Arbitral Tribunal's decision to award foreclosure compensation and reject the counterclaim, finding that the Tribunal's interpretation of the contract was within its jurisdiction....
The limitation period for arbitration claims commences from the date of the Cure Notice, and claims not filed within three years are barred, affirming the arbitrator's findings.
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
