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2023 Supreme(Chh) 574

IN THE HIGH COURT OF CHHATTISGARH AT BILASPUR
RAMESH SINHA, J.
Advait Buildtech Pvt Ltd. – Appellant
Versus
Venu Gopal Sharma S/o. Sheshnarayan Sharma – Respondent
ARBR No. 27 of 2023, ARBR No. 25 of 2023, ARBR No. 26 of 2023, ARBR No. 28 of 2023
Decided on : 24-11-2023

Advocates:
Advocate Appeared:
For the Appellant :Mr. Pankaj Singh, Advocate
For the Respondents:Mr. Tarendra Kumar Jha, Advocate

The judgment established the importance of thoroughly examining the existence and validity of the arbitration agreement, the privity of the parties, and the narrow pre-referral jurisdiction of the courts under Section 11(6) of the Act of 1996.

Headnote:

Arbitration - Appointment of Arbitrator - Section 11(6) of the Arbitration and Conciliation Act, 1996 - 20 SCC 760, AIR (SC)-2023-0-1974, AIR(SC)-2023- 0-2339, 2023 SCC On Line SC 495 - The court discussed the existence and validity of the arbitration agreement, privity of the parties, and the narrow pre-referral jurisdiction of the courts under Section 11(6) of the Act. The judgment highlighted the importance of thorough examination of the arbitration agreement and the non-arbitrability of disputes.

Fact of the Case:

The applicant sought the appointment of an Arbitrator under Section 11(6) of the Act of 1996 due to a dispute arising from a contractual agreement for tutoring services. The respondent objected to the appointment, citing lack of evidence of the applicant's legal entity and the insufficiency of stamp duty on the agreement.

Finding of the Court:

The court found that the respondent had not executed any agreement with the applicant and was not agreeable to arbitration proceedings. It concluded that the jurisdiction under Section 11(6) of the Act of 1996 should not be exercised and dismissed the applications, granting the applicant the liberty to avail other legal remedies.

Issues: Existence and validity of the arbitration agreement, privity of the parties, sufficiency of evidence for the applicant's legal entity, and stamp duty on the agreement.

Ratio Decidendi: The court emphasized the narrow pre-referral jurisdiction of the courts under Section 11(6) of the Act, the importance of thorough examination of the arbitration agreement, and the non-arbitrability of certain disputes.

Final Decision: The applications for the appointment of an Arbitrator under Section 11(6) of the Act of 1996 were dismissed, granting the applicant the liberty to avail other legal remedies.

ORDER :

1. Since the issues for consideration involve in all these Arbitration Applications filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 (for short, ‘the Act of 1996’) for appointment of Arbitrator are similar, they are clubbed and heard together and are being disposed of by this common order. Parties, pleadings and proceedings are referred to as given in ARBR No. 25 of 2023, except where it is separately adverted to.

2. Heard Mr. Pankaj Singh, learned counsel for the applicant as well as Mr. Tarendra Kumar Jha, learned counsel, appearing for respondents in all these cases.

3. The present applications have been filed by the applicant under Section 11 (6) of the Act of 1996 seeking an order from this Court for the appointment of an Arbitrator.

4. Mr. Pankaj Singh, learned counsel for the applicant submitted that the applicant previously happens to be a Coaching Institute/Academy known by the name of Gate Academy Learning Pvt. Ltd. The applicant and respondent entered into an Agreement (Contractual Agreement for Tutor) dated 22.11.2020, wherein respondent agreed to render his service as a tutor of the applicant under the Agreement for the continuous period of 3 years from the date of execution of the Agreement. The said Agreement between the applicant and respondent under Clause 15.7 had an arbitration clause, wherein both the parties categorically agreed that “in case of any dispute arising in respect of this Agreement, the matter shall re referred to arbitration of sole Arbitrator duly appointed by Party No.1 (Applicant in the present matter). The Arbitration proceeding shall be conducted at Bhilai (C.G) in consonance with the provision of Arbitration and Conciliation Act, 1996.” He further submitted that contrary to express provisions of the Agreement, the respondent resigned from his post of tutor on 09.07.2021 before completion of three years thereby violated the terms of Clause 15.7 of the Agreement. Upon receipt of said resignation by the respondent, the applicant sent a legal notice through its Advocate vide Notice bearing Ref. No. LN/AD756/1039, dated 04.08.2021 to the respondent. The applicant in compliance with the Agreement invoked the Arbitration proceeding by sending a letter of request to Shri Ashok Kumar Panda (former Judicial member, C.G. Arbitration Tribunal Raipur; former Registrar General of High Court of Chhattisgarh and Retd. District and Sessions Judge), which was accepted by the Arbitrator. The applicant sent a letter of intimation dated 01.04.2022 to the respondent to invoke Arbitration proceedings informing the name of Arbitrator and its designation.

5. Mr. Singh further submitted that Arbitration proceedings duly began wherein the respondent appeared and raised objection on the appointment of the Arbitrator. The learned sole Arbitrator Shri Ashok Kumar Panda dropped the proceedings on 10.09.2022 on the ground that one party cannot unilaterally appoint a sole Arbitrator in view of the judgment of Hon’ble Supreme Court rendered in case of Perkins Eastman Architect DPC (India) Ltd. V/s HSCC (India) Ltd., reported in (2020) 20 SCC 760. After receiving the said order dated 10.09.2022 of the Hon’ble Arbitrator, the applicant duly complied with the order and again set a proposal letter dated 10.12.2022 to mutually appoint the Arbitrator with consent of the respondent, however, till date the applicant did not receive any response from the other party. Based on the aforesaid premise it is apparent that the respondent is not agreeable to appointment of Arbitrator by mutual consent, meaning thereby parties are not able to appoint an arbitrator mutually with their consent and thus applicant has filed this application under section 11(6) of the Act of 1996 seeking appointment of an Arbitrator.

6. The Respondent has filed reply and is not agreed for Arbitration proceeding and contented that it is quite vivid from the application filed before this Hon’ble Court that the applicant has not enclosed

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