SupremeToday Landscape Ad
Back
Next
Judicial Analysis Court Copy Headnote Facts Arguments Court observation
Listen Audio Icon Pause Audio Icon
judgment-img

2022 Supreme(Cal) 23

IN THE HIGH COURT OF JUDICATURE AT CALCUTTA
Prakash Shrivastava, J.
M/S Blue Star Limited - Appellant
Versus
Shriram EPC Limited - Respondent
A.P. No. 366 of 2021
Decided On : 18-01-2022

Advocate Appeared:
For the Appellant :Mr. Satadeep Bhattacharyya, Mr. Avishek Guha, Ms. Akansha Chopra, Advocates
For the Respondent:Mr. Ajay Gaggar, Ms. Uttiyo Mallick, Advocates

The main legal point established in the judgment is the court's authority to appoint an arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996 based on the existence of undisputed arbitration agreements and the exhaustion of the amicable settlement procedure.

Headnote:

Arbitration - Appointment of Arbitrator - Arbitration and Conciliation Act, 1996 - Section 11 - Purchase Orders/Work Orders - SEPC/ISP/ACVS/070, SEPC/ISP/ACVS/071, SEPC/ISP/ACVS/0182, SEPC/ISP/ACVS/0183, SEPC/ISP/ACVS/0254, SEPC/ISP/ACVS/0256, SEPC/ISP/ACVS/0269, SEPC/ISP/ACVS/0271, SEPC/ISP/ACVS/0184, 1100003262 - The court appointed an arbitrator to resolve the dispute between the parties based on the existence of undisputed arbitration agreements in the purchase orders, exhaustion of amicable settlement procedure, and the limited scope of proceedings under Section 11 of the Arbitration and Conciliation Act, 1996.

Fact of the Case:

The applicant filed an application under Section 11 of the Arbitration and Conciliation Act, 1996 for the appointment of an arbitrator to resolve a dispute arising from purchase orders/work orders with identical arbitration clauses. The applicant claimed that the respondent had not made full payment for the work carried out, and after failed attempts at amicable settlement, invoked the arbitration clause.

Finding of the Court:

The court found that the arbitration agreements in the purchase orders were undisputed, and the procedure for amicable settlement had been exhausted. The court also considered the limited scope of proceedings under Section 11 of the Act and appointed an arbitrator to resolve the dispute.

Issues: The issues involved the appointment of an arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996, the existence of undisputed arbitration agreements in the purchase orders, and the exhaustion of the procedure for amicable settlement.

Ratio Decidendi: The court's decision was influenced by the exhaustion of the amicable settlement procedure, the existence of undisputed arbitration agreements, and the limited scope of proceedings under Section 11 of the Act.

Final Decision: The court allowed the application and appointed Mr. Kaushik Dey as the arbitrator to resolve the dispute between the parties.

JUDGMENT :

1. This application under Section 11 of the Arbitration and Conciliation Act, 1996 has been field for appointment of arbitrator to resolve the dispute between the parties.

2. The case of the applicant is that on and from the beginning of 2009, the respondent had issued the following Purchase Orders/Work Orders with identical arbitration clause:

SCHEDULE

 

Purchase Order/Work Order Serial Number

Date

Amount

1.

SEPC/ISP/ACVS/070

August 25, 2009

Rs. 1,37,02,631.00

2.

SEPC/ISP/ACVS/071

August 25, 2009

Rs. 49,66,840.00

3.

SEPC/ISP/ACVS/0182

September 13, 2010

Rs. 21,45,000.00

4.

SEPC/ISP/ACVS/0183

September 13, 2010

Rs. 6,12,811.00

5.

SEPC/ISP/ACVS/0254

August 02, 2011

Rs. 2,88,000.00

6.

SEPC/ISP/ACVS/0256

August 04, 2011

Rs. 22,48,480,.00

7.

SEPC/ISP/ACVS/0269

September 09, 2011

Rs. 1,03,006.00

8.

SEPC/ISP/ACVS/0271

September 23, 2011

Rs. 7,55,468.00

9.

SEPC/ISP/ACVS/0184

September 19, 2010

Rs. 4,94,063.00

10.

1100003262

September 24, 2010

Rs. 2,53,690.00

3. Further case of the applicant is that these purchase orders were for the purpose of designing, engineering, manufacturing, erecting, supplying and commissioning of plant and equipments by the applicant. A further plea has been raised that the purchase orders form part of the composite transaction in respect of a project at IISCO Steel Plant and are interconnected with each other. According to the applicant, he had carried out the work in respect of the purchase orders but the full payment was not made by the respondent and the amount to the tune of Rs. 33,49,343.52 is still due. The correspondence was exchanged between the parties and the meeting also took place but with no success. Hence, the applicant had sent the notice dated 03r March, 2021 to the respondent invoking the arbitration clause and proposing the name of the sole arbitrator. Inspite of service of notice, no response was received by the applicant. Hence, the present application has been filed.

4. Submission of learned Counsel for the applicant is that all the purchase orders contained identical arbitration clause and the purchase orders are not in dispute and attempt for amicable settlement has failed, therefore, an arbitrator be appointed for settling the dispute.

5. The objection of learned Counsel for the respondent is that as per the arbitration clause, initially attempts are required to be made for amicable settlement which has not been done. Hence, Section 11 cannot be invoked.

6. Having heard the learned Counsel and on perusal of the record, it is noticed that the arbitration agreements are undisputed. These arbitration agreements in the form of purchase orders contain following arbitration clause:

    "7.0 ARBITRATION:

Any disputes, differences, whatsoever, arising between the parties out of or relating to the construction, meaning, scope, operation or effect of this contract shall be settled between the Employer and the contractor amicably. If however, the Employer and the Contractor are not able to resolve their disputes/differences amicably as aforesaid the said disputes/differences shall be settled by conciliation, failing which, through Arbitration at City of Kolkata."

7. The record further reflects that the applicant had submitted the claim for balance amount of Rs. 33, 49, 343.52 on 17th March, 2017. Thereafter, the deliberations took place and in the meeting dated 14th August, 2018, the respondents had agreed to release balance amount by December, 2018. But thereafter, some dispute again arose, hence, the amount has not been received. Thus, the procedure for amicable settlement has been exhausted.

8. That apart in the affidavit-in-opposition, the respondent has claimed the liquidated damages and RPN cost to the tune of Rs. 8.94 lakhs, hence, the amicable settlement is not possible no

Click Here to Read the rest of this document
1
2
3
4
5
6
7
8
9
10
11
SupremeToday Portrait Ad
supreme today icon
logo-black

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

qr

Scan Me!

India’s Legal research and Law Firm App, Download now!

For Daily Legal Updates, Join us on :

whatsapp-icon Back to top