IN THE HIGH COURT AT CALCUTTA
KRISHNA RAO, J.
Dascon Sourav Commercial Private Limited – Plaintiff
Versus
CLE Private Limited – Defendant
IA No. GA 3 of 2023, CS-COM No. 208 of 2024 (Old No. CS 131 of 2020)
Decided On : 10-04-2024
Arbitration - Jurisdiction - Arbitration and Conciliation Act, 1996, Section 7(5) - The court discussed the incorporation of arbitration clause from another document into the contract, the intention to incorporate the arbitration clause, and the applicability of arbitration clause in a single-contract case.
Fact of the Case:
The defendant filed an application for dismissal of the suit and for referring the parties to arbitration. The plaintiff filed a suit against the defendant for various reliefs. The defendant claimed that the dispute arose out of the contract and should be referred to arbitration as per the contract terms. The plaintiff disputed the application, stating that the arbitration clause was not applicable to their contract.
Finding of the Court:
The court found that the arbitration clause was not incorporated into the contract between the parties and thus the matter cannot be referred to arbitration.
Issues: The main issue was the applicability of the arbitration clause in the contract between the parties.
Ratio Decidendi: The court held that the arbitration clause from another document can be incorporated into the contract only by a specific reference to the arbitration clause. It also discussed the applicability of the arbitration clause in a single-contract case.
Final Decision: The court dismissed the application for dismissal of the suit and for referring the parties to arbitration.
JUDGMENT :
KRISHNA RAO, J.
1. The defendant has filed the present application for dismissal of the suit and for referring the parties to the Arbitration. The plaintiff has filed the suit being C.S. No. 131 of 2020 against the defendant praying for the following reliefs:
(b) A decree for a sum of Rs. 1,86,64,488.00/- as stated in paragraph no. 75 hereinabove.
Alternatively
(c) An inquiry into damages and a decree for such amount as may be found due and payable upon such inquiry.
(d) Interim interest and interest upon judgment at the rate of 18% per annum.
(e) Injunction.
(f) Attachment.
(g) Receiver.
(h) Cost.
(i) Such further or other reliefs.”
2. The defendant says that plaintiff has filed the suit relied upon the General Conditions of Contract (hereinafter referred to as “GCC”), Special Conditions of Contract (hereafter referred to as “SCC”) and the Work Order issued to the plaintiff dated 18th June 2010 for Earthwork and Dyke formation for Ash Pond Package-I at 2 x 600 MW Damodar Valley Corporation, Raghunathpur, Thermal Power Project, Purulia, West Bengal which was awarded by the defendant CLE Private Limited to the plaintiff pursuant to a final auction dated 21st April, 2010. The defendant says that the GCC, SCC, Technical Specification and Erection Conditions of the Contract were duly communicated and accepted by the plaintiff through exchange of e-mail between the parties. The plaintiff has received the work order and accepted the same.
3. The defendant says that the dispute raised by the plaintiff in the suit arises out of the contract and as per clause 5 of the GCC, there is a Forum Selection Clause and as per the said Clause, the Courts of Mumbai shall have the exclusive jurisdiction in all the matters arising under the Contract. The defendant says that Clause 6 of the G.C.C. provides for Adjudicator and Arbitration.
4. The defendant submits that the work order clearly makes the GCC, SCC and Technical Specification as the documents forming the contract. The defendant says that as per contract, the parties have chosen arbitration as the mode of resolution of the disputes between the parties and thus the parties to the suit should be referred to the Arbitration.
5. The defendant submits that this Court has no jurisdiction to deal and decide the instant matter as the Contract specifically provides that the Courts of Mumbai shall have exclusive jurisdiction in all matters arising under the Contract.
6. The plaintiff says that the application filed by the defendant is not maintainable under law as the defendant has not produced the original GCC, SCC and original work orders which are lying with the defendant. The plaintiff says that the defendant has acknowledged the jurisdiction of this Court by participating in the mediation proceeding referred to by this Court with the consent of both the parties and the defendant has participated in the mediation proceeding.
7. The plaintiff says that the plaintiff has never executed any GCC and SCC with the defendant and in the original work order there in no reference with respect to the arbitration. The plaintiff says that the Damodar Valley Corporation had originally awarded work contract to Reliance Infrastructure which is now CLE Private Limited. The GCC and SCC were entered by and between the Damodar Valley Corporation and CLE Private Limited and in respect of which, an arbitration proceeding had been initiated and an award had been passed in favour of the defendant. In the said proceedings, all the questions with respect to contractual obligation was granted in favour of the defendant. The plaintiff company being one of the Sub-Contractor under the defendant who participated in execution of some of the contracts in respect to Raghunathpur project but the plaintiff has not been paid in spite of the fact that all the contractual obligations between the original employer i.e. Damodar Valley Corporation and th
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