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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
Suraj Govindaraj, J.
Sri Malaprabha Sahakari Sakkare Karkhane Ltd. - Petitioner
Versus
The Commissioner of Cane Development and Director of Sugar and Ors. – Respondents
Writ Petition No.19063 of 2018 (CS-RES)
Decided On : 05-04-2023
Arbitrator - Counter claim – Quash order - Issue a Writ or order quashing order in Dispute passed by Respondent No.1 in so far as it relates to dismissing counter claim of petitioner – Whenever a claim is raised before an arbitrator, counter claim inheres in respondent to raise, if there is a claim filed against respondent, respondent could also seek for a relief of set off or like - Para 3.
Finding of the Court: Whenever a claim is raised before an arbitrator, counter claim inheres in respondent to raise, if there is a claim filed against respondent, respondent could also seek for a relief of set off or like - 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 about a counter claim – Court is of considered opinion that order passed by arbitrator is not sustainable and therefore, confirmation of order by Appellate Tribunal is also not sustainable - A writ of certiorari is issued, order in Dispute passed by 1st respondent is set aside.
Result: Petition is allowed.
ORDER :
1. The petitioner is before this Court seeking for the following reliefs:
b. Pass such other writ, order or direction that this Hon’ble Court deems fit to pass in the circumstances of the case.
2. The grievance of the petitioner is that, on respondent No.2 raising a dispute claiming for certain amounts of money from the petitioner, the petitioner had raised a counter claim. The said counter claim came to be dismissed by the Arbitrator appointed on the ground that the Memorandum of Settlement containing the arbitration clause did not provide for raising a counter claim. On an appeal being filed before the Karnataka Appellate Tribunal, the Appellate Tribunal confirmed the order on the very same ground. It is aggrieved by the same, the petitioner is before this Court.
3. Whenever a claim is raised before an arbitrator, the counter claim inheres in the respondent to raise, if there is a claim filed against the respondent, the respondent could also seek for a relief of set off or the like. When the 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 the arbitration clause speaks specifically about a counter claim.
4. At this stage, the learned counsel for the respondent No.2 submits that the claim filed by the claimant has been dismissed. Therefore, the counter claim cannot be considered.
5. Whether a claim has been dismissed or not, a counter claim stands on a separate footing and the same would have to be considered by the arbitrator even though the claim may be dismissed.
6. In that view of the matter, I am of the considered opinion that the order passed by the arbitrator is not sustainable and therefore, the confirmation of the said order by the Appellate Tribunal is also not sustainable. As such, I pass the following:
i. The Writ Petition is allowed.
ii. A writ of certiorari is issued, the order dated 02.03.2013 in Dispute No.DSK/DIS-89/2005-06 passed by 1st respondent is set aside. The order dated 31.07.2017 in Appeal No.234/2013 at Annexure-D passed by the Karnataka Appellate Tribunal is set aside.
iii. The matter is remitted to the 1st respondent arbitrator to consider the counter claim in accordance with law.
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