IN THE HIGH COURT AT CALCUTTA, CIRCUIT BENCH AT PORT BLAIR
Sabyasachi Bhattacharyya, J.
M/S The Indian Hotels Company Limited - Petitioner
Versus
The Managing Director, Aniidco - Respondent
AP 2 of 2024
Decided On : 19-06-2024
JUDGMENT :
SABYASACHI BHATTACHARYYA, J.
1. The petitioner entered into a lease agreement with the respondent on December 7, 2009.
2. Clause XV of the same contained a Force Majeure provision.
3. The petitioner, during the COVID-19 period, faced hard times in running the hotel and resort for which the lease agreement was taken and accordingly sought a waiver in the lease rental payable to the respondent, by invoking the said Force Majeure clause. However, the respondent refuted the said claim, leading to the petitioner seeking to invoke the pre-arbitration conciliation clause in the agreement.
4. Clause XXI of the agreement pertains to dispute resolution. In Sub-Clause XXI.1, amicable resolution has been contemplated as a prior recourse before taking the route of arbitration. Clause XXI.2 provides for arbitration and Clause XXI.3 provides that the arbitration award will be binding on the parties.
5. According to the petitioner, the petitioner in terms of Clause XXI.1(b) sought a joint meeting between the parties by its letter dated August 12, 2021. By a communication dated August 26, 2021, the respondent fixed a meeting on August 28, 2021 at the time and venue mentioned therein.
6. What happened next is the subject matter of divergence between the parties. Whereas the petitioner contends that there was a meeting where the parties failed to reach a settlement, the respondent says that there was no such meeting at all.
7. Be that as it may, thereafter by a correspondence dated August 30, 2021, the respondent communicated that the matter was examined and reiterated its claim of the entire lease rental, refusing to grant any waiver as per the petitioner’s request.
8. In its affidavit-in-opposition, the respondent has disclosed the minutes of the 154th meeting of the Board of Directors of the respondent where the decision was taken to refute the claim of the petitioner, leading to the communication dated August 30, 2021.
9. The respondent has also disclosed in its opposition a further minutes of the 156th meeting of its Board dated November 22, 2021 where the same stand was reiterated.
10. Ultimately on January 5, 2022, the petitioner stated in writing that it was paying the dues as claimed by the respondent, however, mentioning that the same was without prejudice to its rights.
11. The same stand was reiterated by the petitioner subsequently as well.
12. According to the petitioner, upon the parties failing to reach an amicable resolution in terms of Clause XXI.1, the petitioner invoked the Arbitration Clause i.e. XXI.2 by issuing a notice invoking arbitration under Section 21 of the Arbitration and Conciliation Act, 1996 on December 28, 2023, therein nominating its arbitrator and asking the respondent to appoint the latter’s nominee.
13. It is relevant to mention here that Clause XXI.2 envisages that the Arbitration Tribunal shall consist of 3 arbitrators, one to be selected by each party and the 3rd arbitrator to be appointed by the two selected arbitrators.
14. Thereafter having received no response from the respondent, the petitioner has preferred the present application under Section 11 (6) of the 1996 Act seeking appointment of the nominee of the respondent by this Court.
15. Learned counsel for the petitioner contends that the petitioner duly complied with all pre-arbitration formalities in terms of the arbitration agreement. In view of the respondent having categorically expressed its refusal of the claim of the petitioner even after the joint meeting, going to the extent of expressing displeasure at the petitioner seeking waiver repeatedly, there was no course of action open to the petitioner but to seek arbitration.
16. Learned counsel for the petitioner argues that in view of the payment being categorically made without prejudice to the rights of the petitioner and the petitioner having also clarified in its notice under Section 21 that the payment was being made under protest and without prejudice to its right and contention, there was
The court affirmed that the inquiry under Section 11(6) of the Arbitration Act is restricted to the existence of an arbitration agreement, allowing disputes to proceed to arbitration without mandator....
The main legal point established in the judgment is that the appointment of an arbitrator must be in accordance with the agreed procedure in the contract. If the appointment is not in line with the a....
An arbitrator's appointment must adhere to the agreed procedure; failure to do so renders the appointment invalid under Section 11(6) of the Arbitration Act.
Failure to appoint an arbitrator within the agreed timeframe under Arbitration Agreement allows the court to intervene and appoint an arbitrator under Section 11(6) of the Arbitration and Conciliatio....
The main legal point established is the applicability of Section 11(6) of the Arbitration and Conciliation Act, 1996, in cases where a party fails to appoint an arbitrator within the stipulated time ....
The consent to arbitrate can waive mandatory pre-arbitration formalities, allowing disputes from separate contracts to be arbitrated as a composite matter.
The Conciliation process mentioned in the Contract was not mandatory and could not affect the petitioner's right to invoke the Arbitration Agreement, especially when there was justified urgency to pr....
The judgment establishes the requirement of a written agreement for arbitration, the interpretation of settlement of disputes clauses, and the significance of party conduct in determining the existen....
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