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2018 Supreme(Bom) 722
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
R.D. DHANUKA, J.
Stemcor (S.E.A.) Pte Limited & Ors. - Petitioners
Versus
Mideast Integrated Steels Limited & Ors. - Respondents
Arbitration Petition No. 332 OF 2018
Decided On : 08-06-2018
For the Petitioners:Mr. Rohit Kapadia, Senior Advocate, a/w. Mr. Chirag Kamdar, Mr. Mohit Advani, Ms. Pranjal Mehta, i/b. Cyril Amarchand Mangaldas.
For the Respondents:Mr. G.R. Joshi, Senior Advocate, a/w. Mr. Chirag Mody, Ms. Anusha Jacob, Mr. Yash Momaya, i/b. DSK Legal
The Court held that the respondents, having obtained an order from the arbitrator to approach the Court for appointment of a Commission to examine a witness, cannot be allowed to raise an objection about maintainability of a similar application made by the petitioners for appointment of a Commission to examine another witness. The Court further held that recording of evidence by commission would be more authentic and better than even video-conferencing and that the recording of evidence on commission would not amount to a change of venue under any part of Section 20 of the Arbitration Act. The Court also held that the powers of the Court under Section 27 of the Arbitration and Conciliation Act, 1996 are not adjudicatory powers and that the Court has ample power to issue a Letter of Request by exercising such powers under Sections 77 and 75 along with Order XXVI Rules 7 and 8 of the Code of Civil Procedure, 1908 and also read with Section 27(6) of the Arbitration and Conciliation Act, 1996.
Headnote:
The Court held that the respondents, having obtained an order from the arbitrator to approach the Court for appointment of a Commission to examine a witness, cannot be allowed to raise an objection about maintainability of a similar application made by the petitioners for appointment of a Commission to examine another witness. The Court further held that recording of evidence by commission would be more authentic and better than even video-conferencing and that the recording of evidence on commission would not amount to a change of venue under any part of Section 20 of the Arbitration Act. The Court also held that the powers of the Court under Section 27 of the Arbitration and Conciliation Act, 1996 are not adjudicatory powers and that the Court has ample power to issue a Letter of Request by exercising such powers under Sections 77 and 75 along with Order XXVI Rules 7 and 8 of the Code of Civil Procedure, 1908 and also read with Section 27(6) of the Arbitration and Conciliation Act, 1996.
Fact of the Case:
The petitioners, who were the original respondents in an arbitral proceeding, filed a petition under Section 27 of the Arbitration and Conciliation Act, 1996 (the Arbitration Act), seeking issuance of a commission to Singapore to record the evidence of Mr. Gerard Craggs, the managing director of the petitioner no.1. The respondents, who were the original claimants in the arbitral proceeding, opposed the petition on various grounds, including that the appointment of a commission for recording evidence outside Mumbai would amount to a change of venue, which was contrary to the consent terms agreed to between the parties on 14th June, 2016.
Finding of the Court:
The Court held that the respondents, having obtained an order from the arbitrator to approach the Court for appointment of a Commission to examine a witness, cannot be allowed to raise an objection about maintainability of a similar application made by the petitioners for appointment of a Commission to examine another witness. The Court further held that recording of evidence by commission would be more authentic and better than even video-conferencing and that the recording of evidence on commission would not amount to a change of venue under any part of Section 20 of the Arbitration Act. The Court also held that the powers of the Court under Section 27 of the Arbitration and Conciliation Act, 1996 are not adjudicatory powers and that the Court has ample power to issue a Letter of Request by exercising such powers under Sections 77 and 75 along with Order XXVI Rules 7 and 8 of the Code of Civil Procedure, 1908 and also read with Section 27(6) of the Arbitration and Conciliation Act, 1996.
Issues: 1. Whether the respondents, having obtained an order from the arbitrator to approach the Court for appointment of a Commission to examine a witness, can be allowed to raise an objection about maintainability of a similar application made by the petitioners for appointment of a Commission to examine another witness? 2. Whether recording of evidence by commission would amount to a change of venue under any part of Section 20 of the Arbitration Act? 3. Whether the powers of the Court under Section 27 of the Arbitration and Conciliation Act, 1996 are adjudicatory powers? 4. Whether the Court has ample power to issue a Letter of Request by exercising such powers under Sections 77 and 75 along with Order XXVI Rules 7 and 8 of the Code of Civil Procedure, 1908 and also read with Section 27(6) of the Arbitration and Conciliation Act, 1996?
Ratio Decidendi: 1. The Court held that the respondents, having obtained an order from the arbitrator to approach the Court for appointment of a Commission to examine a witness, cannot be allowed to raise an objection about maintainability of a similar application made by the petitioners for appointment of a Commission to examine another witness. The Court relied on the principle of waiver and held that the respondents, by applying for appointment of a commission for recording evidence of their witness outside India, had waived their right to raise an objection of change of venue when the petitioners made a similar application. 2. The Court held that recording of evidence by commission would not amount to a change of venue under any part of Section 20 of the Arbitration Act. The Court relied on the provisions of Section 20(3) of the Arbitration Act, which empowers the arbitral tribunal to meet at any place it considers appropriate for consultation among its members, for hearing witnesses, experts or the parties, or for inspection of documents, goods or other property, notwithstanding sub-section (1) or sub-section (2) of Section 20 of the Arbitration Act unless otherwise agreed by the parties. The Court held that the recording of evidence on commission would be an agent of the Court for the purpose of recording evidence and that the agreed venue would not change. 3. The Court held that the powers of the Court under Section 27 of the Arbitration and Conciliation Act, 1996 are not adjudicatory powers. The Court relied on the judgment of the Supreme Court in Montana Developers Private Limited Vs. Aditya Developers & Ors. (supra) and held that the powers of the Court under Section 27 of the Arbitration Act are not adjudicatory powers but are merely procedural powers to provide assistance to a party in whose favour the learned arbitrator has opined that the production of documents or witness was warranted in the facts of his case. 4. The Court held that the Court has ample power to issue a Letter of Request by exercising such powers under Sections 77 and 75 along with Order XXVI Rules 7 and 8 of the Code of Civil Procedure, 1908 and also read with Section 27(6) of the Arbitration and Conciliation Act, 1996. The Court relied on the provisions of Section 77 of the Code of Civil Procedure, which empowers the Court to issue a Letter of Request to examine a witness residing at any place not within India. The Court also relied on the provisions of Section 27(6) of the Arbitration Act, which defines the expression “Processes” to include summonses and commissions for the examination of witnesses and summonses to produce documents.
Final Decision: The Court allowed the petition filed by the petitioners and directed the learned Prothonotary and Senior Master of the Court to issue a Letter of Request to the High Court of Singapore to issue appropriate directions for the examination of Mr. Gerard Craggs in the manner provided under Order 39, Rules 5 to 10, 11(1) and 11(2) of the Supreme Court of Judicature Act and under Order 39 Rule 14 for fees and expenses, if any, due to the examiner in respect of the examination or under any other applicable provisions of law for the purpose of such commission.
1. By this petition filed under section 27 of the Arbitration and Conciliation Act, 1996 (for short the Arbitration Act), the petitioners have prayed for issuance of a commission to Singapore to record the evidence of Mr. Gerard Craggs on dates that may be mutually convenient to all the parties and to direct that such recorded evidence be returned to the learned arbitral tribunal comprising Mr. Fredun E. De Vitre. Some of the relevant facts for the purpose of deciding this petition are as under :-
2. The petitioners are the original respondents whereas the respondents are the original claimants in the arbitral proceedings. The petitioner no.1 is incorporated under the Laws of Singapore and is having its registered office at Singapore. The respondent no.1 is incorporated and registered under the Companies Act, 1956 and its registered office is at New Delhi.
3. Sometime in the year 2004, the petitioners and the respondents entered into a number of agreements and the arrangements on the terms and conditions recorded in those agreements. A dispute arose between the parties pursuant to which the respondents initiated the arbitration proceedings against the petitioners.
4. On 14th June, 2016, the parties filed consent minutes of the order in Commercial Arbitration Petition (L) No.7 of 2016 which was filed by the respondents herein against the petitioners inter alia praying for appointment of an arbitrator. Both the parties agreed that all disputes, differences and claims that may have arisen and that may arise between the parties arising out of various agreements entered into between the parties referred to in the said consent minutes of order will be referred to the sole arbitrator named therein in accordance with the provisions of the Arbitration and Conciliation Act, 1996 as amended from time to time. Those disputes between the parties are pending before the learned sole arbitrator Mr. Fredun E. De Vitre, a senior counsel of this court. Clause 3 of the said agreed consent terms provided as under :-
3. The said Agreements are/shall be governed by the laws of India. The seat and venue of the arbitration shall be Mumbai. The courts at Mumbai shall have exclusive jurisdiction in relation to the arbitration.
5. It was further recorded in the said consent minutes of the order that the said clause 3 shall also be in super-session/amendment of Clause 23 of the Advance Payment and Supply Agreement dated 11th January,2007 and clause 17 of the Fee Letter dated 11th January,2007. Pursuant to the directions issued by the learned arbitrator, the respondents filed their statement of claim along with documents. The petitioners filed their written statement and counter claim along with documents.
6. The respondents examined four witnesses including Mr. Mathew Stock. The examination in chief of the said Mr. Mathew Stock was recorded orally whereas the other three witnesses examined by the respondents had filed their affidavit in lieu of examination in chief in the arbitral proceedings. The petitioners proposed to examine two witnesses i.e. (1) Mr.Aditeshwar Dayal Seth and (2) Mr.Gerard Craggs. The cross examination of Mr.Gerard Craggs however remained to be completed. Mr.Gerard Craggs was the managing director of the petitioner no.1 and is a resident of Singapore and carries on business at Singapore. It is the case of the petitioners that the said Mr.Gerard Craggs is the only witness leading evidence on behalf of the 1st petitioner.
7. On 20th March,2017, the respondents herein filed an application before the learned arbitrator seeking leave of the learned arbitrator to file an affidavit on behalf of an additional witness, Mr.Vineet Mehra in lieu of examination in chief. The respondents also made a separate application before the learned arbitrator seeking approval for making an application before this court for issuance of the witness summons under section 27 of the Arbitration Act to summon Mr.Mathew Stock to depose as a witness on behalf of
