High Court of Judicature at Calcutta
SANJIB BANERJEE
New Age Realty Pvt. Ltd.
Versus
M/s. Karthikeya Ancilaries Pvt Ltd. & Another
AP No. 244 of 2010
Decided On : 07-07-2011
The present request for the constitution of an arbitral tribunal for reference of the disputes between the parties to arbitration in accordance with their arbitration agreement, throws up a number of issues. Of the various objections which have been taken by the first respondent, the primary one is that the petitioner herein, if it were to file a suit on the basis of the claims apparent, it would be a suit for land since the petitioner’s claim is inextricably connected to the land in Coimbatore that the parties had agreed to develop.
A joint development agreement was entered into by the first and second respondents herein which envisaged that the second respondent developer would develop the property into a shopping mall-cum-commercial complex consisting of one or more buildings. Though some of the terms of the agreement may subsequently have been altered, the agreement of October 18, 2006 provided that the first respondent owner would be entitled to 50 per cent of the constructed space and the second respondent developer would be entitled to the balance 50 per cent. The agreement also envisaged some payment being made by the developer including a sum of Rs.11 crore by way of loan to help the owner discharge a mortgage liability. Clause XIV of the agreement of October 18, 2006 contains the arbitration agreement that the petitioner has sought to enforce:
“i. In the event of any doubt, difference or dispute in the interpretation or implementation of the agreement or the development or any matter concerning this agreement or the development, the same shall be referred to Sri. L. G. Ramamurthi and the decision of the sole arbitrator on all matters so referred shall be final and binding upon the parties.”
As is evident, the petitioner herein was not a party to the joint development agreement of October 18, 2006. The petitioner herein came in under an agreement entitled “JDA Assignment Agreement” executed on March 23, 2007 to which the parties herein were parties. The essence of such agreement is that the rights and obligations of the second respondent developer under the joint development agreement of October 18, 2006 stood assigned in favour of the petitioner herein. Clause 6.5 of the assignment provides that the petitioner herein would not commit breach of any of the terms of the agreement of October 18, 2006 and Clause 6.6 thereof stipulates that by virtue of the assignment, “it shall be deemed as if the JDA has been executed by the owner with the SPV (the petitioner herein) in place and stead of Presidium to the extent of remaining unperformed by the parties as of now.”
It is the petitioner’s contention herein that by virtue of, inter alia, Clause 6.6 of the assignment of March 27, 2007, the petitioner herein became entitled to the benefits and obligations of Presidium in the agreement of October 18, 2006. The petitioner suggests that the wide import of Clause 6.6 of the agreement of March 27, 2007 would take within its sweep the arbitration clause contained in the original agreement.
It is not necessary, for the present purpose, to conclusively pronounce on such contention of the petitioner.
It is the first respondent’s argument that the arrangement that was entered into, relating to the development of the land and the setting up of a shopping mall-cum-commercial complex thereat, also involved one Emami Realty Pvt. Limited. The first respondent says that it is Emami which is in de facto control of the petitioner herein and the first respondent owner had entered into the second agreement of March 27, 2007 on the basis of the Emami’s reputation and strength as a corporate entity. The first respondent suggests that any arbitration involving only the petitioner herein without Emami being roped in would be meaningless. Again, in the context of the present proceedings, no conclusive opinion need be expressed on such issue.
The primary grievance of the first respondent herein is that the Chief Justice of this Court or
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