IN THE HIGH COURT OF JUDICATURE AT BOMBAY
S.J. KATHAWALLA, J.
ASLAM ISMAIL KHAN DESHMUKH - Appellant
Vs.
ASAP FLUIDS PVT LTD. - Respondent
Arbitration Application No. 49 of 2017, 50 of 2017, 51 of 2017
Decided on : 22-02-2019
Arbitration and Conciliation Act, 1996 - Section 2(1)(f)(i) and Section 11 - Companies Act, 2013 – Criminal procedure code, 1973 - Section 488 - Foreign Exchange Management Act, 1999. - Section 35 - Domicile and Matrimonial Proceedings Act, 1973, - section 5 - Express stipulation - Shareholding Agreement - International commercial arbitration - Invoked arbitration - These Arbitration Applications all being under Section 11 of Arbitration and Conciliation Act 1996 (“ Act”) raise a common question of law as regards meaning and interpretation of Section 2(1)(f)(i) of Act that defines an “international commercial arbitration” and more particularly meaning of “ or habitually resident in any country other than India Arbitration Applications 49 50 are all connected applications - Applicant and Respondent No- 1 in all those applications are same but there are additional Respondents in Application Nos- 50 and 51- arbitration agreements under which Applicant has invoked arbitration are part of a Service Agreement (in Arbitration Application and a Shareholding Agreement (in Arbitration Application - Principal legal submission or defense raised by Respondent is that Applicant is ex facie a person habitually resident in a country other than India and therefore present arbitration is an international commercial arbitration and in view of Section 11(12)(a) of Act an application under Section 11 of Act would only lie to Honble Supreme Court to Honble Chief Justice of India or a designate of Honble Chief Justice of India and not before this Court – Held, Court of opinion that Applicant habitually resides in Dubai - This is clear from pleadings documents and undisputed facts - Applicants address in Applications is shown as an address in Dubai - All Applications expressly states that Applicant is a Non -Resident Indian who is currently residing and working in Dubai - Applicant receives his remuneration in USD in a bank in Dubai - Agreements under which arbitration has been invoked also disclose that Applicant is residing in Dubai and this position is noted as of Agreement and is obviously continuing till filing of Application in view of statements made in Application as noted above - legal notices addressed on behalf of Applicant seek damages quantified in Dirhams - Court conclude that proposed arbitral proceedings in present case would constitute an international commercial arbitration and therefore Applications under Section 11 of Act are not maintainable in this Court under provision of Section 11(12)(a) of Act-
S.J. Kathawalla, J.
1. These Arbitration Applications all being under Section 11 of the Arbitration and Conciliation Act, 1996 (“the Act”) raise a common question of law as regards the meaning and interpretation of Section 2(1)(f)(i) of the Act that defines an “international commercial arbitration” and more particularly the meaning of “ or habitually resident in, any country other than India”.
2. Arbitration Applications 49, 50 and 51 of 2017 are all connected applications. The Applicant and Respondent No. 1 in all those applications are the same but there are additional Respondents in Application Nos. 50 and 51. The arbitration agreements under which the Applicant has invoked arbitration are part of a Service Agreement dated 18th October 2011 (in Arbitration Application dated 49 of 2017) and a Shareholding Agreement dated 25th July 2011 (in Arbitration Application Nos. 50 and 51 of 2017).
The facts in brief giving rise to the filing of these applications are set out below :
3. In Arbitration Application No. 49 of 2017 the Applicant has stated :
(i) That he is a Non-Resident Indian residing and working in Dubai, UAE; the Respondent is a company incorporated in Mumbai and governed by the provisions of the Companies Act, 2013; the Respondent is primarily engaged in the business of providing products and services for drilling fluids, completion fluids and drilling waste management services.
(ii) That considering the Applicant's experience in the oil and gas industry, the Respondent decided to avail the Applicant's services; the Applicant began working for the Respondent since March 2011 for a remuneration fixed at USD 15000/- per month.
(iii) That the terms of his employment were formalised and an agreement styled as a 'Service Agreement' was entered into on 18th October 2011 between the Applicant and the Respondent.
(iv) That despite several reminders, the Respondent has not paid to the Applicant, the balance remuneration for approximately 19 months i.e. USD 2,83,292.21/-.
(v) That he was then constrained to invoke the arbitration clause contained in the Service Agreement. Accordingly, by his Advocate's letter dated 23rd January 2017, he invoked the arbitration clause and sought reference of the disputes to arbitration in accordance with the terms of the Service Agreement.
(vi) That the Respondent failed to appoint an arbitrator and did not in fact respond to his Advocate's letter dated 23rd January 2017.
(vii) That in this background, he filed the present Application under Section 11 of the Act seeking appointment of an arbitrator to adjudicate the disputes that have arisen between him and the Respondent.
4. In Arbitration Application No. 50 of 2017, the Applicant is the same as in Arbitration Application 49 of 2017 and in the application the Applicant is again described as a Non-Resident Indian residing and working in Dubai, UAE. The Applicant has further stated :
(i) That the Respondent No. 1 is a company incorporated in Mumbai and governed by the provisions of the Companies Act, 2013; the Respondent No. 1 is primarily engaged in the business of providing products and services for drilling fluids, completion fluids and drilling waste management services; the Respondent No. 2 is a company governed by the provisions of the Companies Act, 2013 and is primarily engaged in oil field and mud services.
(ii) that sometime in March 2011, he along with three others, i.e., the Respondent No. 2, one Mr. Robert Wayne Pantermuehl and one Mr. Sunil B. Shitole agreed to participate in the management of the Respondent No.1; that he executed a Shareholding Agreement dated 25th July 2011 with the Respondent No. 1, Respondent No. 2 and Mr. Robert Wayne Pantermuehl and Mr. Sunil B. Shitole.
(iii) That despite the express stipulation in the Shareholding Agreement dated 25th July 2011, he did not receive the duly stamped, signed share certificates evidencing the allotment in his favour.
(iv) That he was, therefore, constrained to instruct his Advocate wh
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