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2004 Supreme(Del) 1110

High Court Of Delhi
MAXON PRINTECH LTD - Appellant
Versus
GOVT.OF NAGALAND - Respondent
Arbitration Petition 125 of 2003
Decided On : 11/30/2004

Advocates Appeared:
J.K.SETH, SHALINI KAPUR, T.R.KAKKAR

Failure to comply with the notice requirement under Section 11 of the Arbitration and Conciliation Act, 1996 precludes the exercise of power to appoint an arbitrator.

Headnote:

Arbitration - Appointment of Arbitrator - Failure to Comply with Notice Requirement

Fact of the Case:

The petitioner invoked the arbitration clause and sought appointment of an independent arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996. The respondent denied receiving the letter of request for appointment of an arbitrator.

Finding of the Court:

The court found that the petitioner failed to provide proof of service of the notice upon the respondent, as required by Section 11 of the Act. The court also noted that the petitioner's plea of sending the letter under Postal Certificate was not believable.

Issues: The issues included the failure to comply with the notice requirement under Section 11 of the Act and the jurisdiction of the court based on the arbitration agreement.

Ratio Decidendi: The court held that the petitioner's failure to comply with the notice requirement and provide proof of service of notice upon the respondent precluded the exercise of power under Section 11 of the Act.

Final Decision: The petition was dismissed on the ground of non-compliance with Section 11 of the Act and was disposed of accordingly.

Mukul Mudgal, J.

( 1 ) THIS is a petition under Section 11 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the act ). Paragraph 9 of the petition avers that on 27th February, 2003, the arbitration clause was invoked and the respondent did not respond to the said request thereby entitling the petitioner to approach this Court under Section 11 of the Act for appointment of an independent Arbitrator. Paragraph 9 does not mention whether the letter dated 27th February, 2003 was served on the respondent. The learned Counsel for the respondent has categorically denied the receipt of such a letter.

( 2 ) THE petitioner has not filed any proof of service of the letter of request for appointment of an arbitrator with the petition nor made any mention of mode of service and instead enclosed the postal receipt with the rejoinder, of sending the letter under Postal Certificate. Prima facie such a plea is not believable. The relations between the parties were soured to the extent that an arbitrator was sought to be appointed. It is not possible to believe that the petitioner sent a letter under Postal Certificate though service of notice to the respondent is a precondition for invocation of Section 11 of the Act.

( 3 ) FURTHERMORE, Clause 21 relied upon by the petitioner reads as under:

"21. That any dispute or difference between the parties touching this agreement at the same shall be referred to arbitration as per provisions of the Indian Arbitration Act. Arbitration shall be held at Kohima only. "

( 4 ) THE learned Counsel for the petitioner has relied upon the judgment of supreme Court in Konkan Railway Corporation Ltd. v. Rani Construction Pvt. Ltd. , reported as I (2002) SLT 533=1 (2002) CLT 177 (SC)= (2002) 2 SCC 388 to contend that the contentious issues should be decided by the Arbitrator. There is no contentious issue in the present case as the petitioner has failed to file proof of service of notice upon the respondent in compliance with Section 11 of the Act and the respondent denied the receipt of any such leger. Thus the precondition of exercise of the power under Section 11 of the Act has not been satisfied.

( 5 ) THE learned Counsel for the respondent has raised a plea that no cause of action has occurred in Delhi and in view of Clause 21 this petition is not maintainable in Delhi. In view of the petition being dismissed on the ground of non-compliance of Section 11 of the Act, this issue has not been addressed by this Court.

( 6 ) THE petition stands dismissed in the above terms and stands disposed of accordingly. Petition dismissed.

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