IN THE HIGH COURT AT CALCUTTA
SABYASACHI BHATTACHARYYA, J.
Godrej and Boyce Mfg. Co. Ltd. – Petitioner
Versus
Shapoorji Pallonji and Company Pvt. Ltd. – Respondent
A.P. No. 140 of 2023
Decided On : 12-05-2023
Arbitration and Conciliation Act, 1996 - Sections 11, 21 , 11 (6) and 7 - Claiming an outstanding amount of money for furniture sold - Arbitration in respect of a money claim - Respondent (SPCL) has raised an objection as to maintainability of the single Section 21 invocation as well as single application under Section 11 of ground that the dispute arises out of three separate purchase orders having distinct arbitration clauses, although language of the clauses may be identical – Held, Fresh invocation and necessitating a de novo application under Section 11, the most expeditious and prudent course of action would be to entertain present application by turning down the objection as to maintainability and to refer disputes raised by the petitioner against respondent in respect of three Purchase Orders to a single Arbitrator who would consolidate claims and adjudicate on those in a composite manner - A.P. No. 140 of 2023 is allowed
JUDGMENT :
SABYASACHI BHATTACHARYYA, J.
1. The present application under Section 11 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as “the 1996 Act”) seeks a reference to arbitration in respect of a money claim arising out of three Purchase Orders between the parties.
2. An invocation under Section 21 of the 1996 Act was made by the petitioner on August 22, 2022, claiming an outstanding amount of money for furniture sold by the petitioner in terms of the said three contracts.
3. The respondent (SPCL) has raised an objection as to maintainability of the single Section 21 invocation as well as the single application under Section 11 of the 1996 Act on the ground that the dispute arises out of three separate purchase orders having distinct arbitration clauses, although the language of the clauses may be identical.
4. Learned counsel for the respondent argues that the dates of all three purchase orders were not the same, that each of them pertained to different zones and were independent contracts in their own right. As such, it is contended that the petitioner was required to take out three separate applications for reference under Section 11 of the 1996 Act, preceded by three separate invocations on each of the arbitration clauses in the separate contracts.
5. Learned counsel for the petitioner relies on the identical language of the three arbitration clauses and submits that all the purchase orders emanated from a single parent contract between the respondent SPCL and its employer, the West Bengal Medical Services Corporation Ltd. The purchase orders, it is argued, are inextricably interlinked.
6. Learned counsel for the petitioner places reliance on the demands made prior to the invocation and the purported e-mail replies thereto by the respondent, which allegedly relate to payment of a consolidated sum of money. It is argued that furniture was supplied by the petitioner under the purchase orders for eighteen Super Specialty Hospitals in West Bengal, under the contract entered into between the respondent and the employer.
7. Furthermore, it is contended, the payments were released in favour of the petitioner in a consolidated manner and even the respondent treated the outstanding dues as a consolidated claim in its communications.
8. Learned counsel for the petitioner places reliance on Duro Felguera, S.A. vs. Gangavaram Port Limited, (2017) 9 SCC 729, in which separate arbitrators were appointed for six separate arbitrable agreements, two for international commercial arbitration and four for domestic. However, the Supreme Court had observed that the arbitrators can be the same for the matters.
9. Learned counsel for the respondent, while relying on the same report, contends that separate arbitrators were directed to be constituted for each agreement.
10. The petitioner's counsel also cites NTPC Ltd. vs. SPML Infra Ltd. 2023 SCC Online SC 389, for the proposition that the primary inquiry under Section 11 (6) of the 1996 Act is about the existence and validity of an arbitration agreement and also in respect to the non-arbitrability of the dispute.
11. The Supreme Court also stressed the need for quicker and efficient resolution of disputes.
12. However, learned counsel for the respondents seeks to distinguish the said decision, by arguing that the propositions laid down therein do not help the petitioner in the present case.
13. There are, thus, two fulcrums of the present inquiry - the arbitration clauses and the nature of the dispute.
14. From the perspective of the first, we find that there are three separate arbitration clauses in three distinct purchase orders of different dates, although the language of the said clauses are identical. The clauses pertain to supply of different tranches of furniture to different areas, covering eighteen Super Specialty Hospitals in total.
15. If we search for commonalities among the agreements, we find that all the three purchase orders were issued by the respondent to the petition
The existence of an arbitration agreement under Section 11(6) allows for disputes related to a memorandum of family settlement to be arbitrable, reinforcing the principle of kompetenz-kompetenz.
The consent to arbitrate can waive mandatory pre-arbitration formalities, allowing disputes from separate contracts to be arbitrated as a composite matter.
The main legal point established is that unless a party establishes a prima facie case of non-existence of a valid arbitration agreement, the parties are to be referred to arbitration.
The existence of an arbitrable dispute, the validity of the arbitration agreement, and the existence of an arbitrable dispute are to be determined by the arbitral tribunal.
The main legal point established in the judgment is that all disputes capable of resolution by arbitration should be referred to the Arbitral Tribunal, and the scope of examination by the Court exerc....
Courts examine the existence of an arbitration agreement at a preliminary stage without delving into substantive issues or contract novation; such matters are reserved for the Arbitrator.
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