High Court Of Delhi
M.M.AQUA TECHNOLOGIES LIMITED - Appellant
Versus
WIG BROTHERS BUILDERS - Respondent
Civil 3595 of 2001
Decided On : 11/28/2001
Held:
Existence of an arbitration agreement in pith and substance confers power upon the Chief Justice or a person or body designated by him to appoint an arbitrator. In other words the jurisdiction of the learned Single Judge emanates if there was in existence an arbitration agreement. If there was no arbitration agreement, in our opinion, the question of appointing an arbitrator would not and could not arise. Furthermore, in the event the learned Single Judge was required to go into the question as to whether the presence of the second respondent herein was absolutely necessary, it was obligatory on his part, to enter into the merits of the matter even for the purpose of arriving at a prima facie decision in that regard. It could not have done so. For the reasons afore-mentioned, we are of the opinion that the impugned order does not suffer from any legal infirmity whatsoever to warrant invocation of jurisdiction of this Court under Article 226 of the Constitution of India.
( 1 ) THIS writ petition is directed against an order of learned Single of this Court on 15/11/2000 in Arbitration Application No. 277/00, whereby and whereunder Hon ble Mr. Justice d. R. Khanna (a retired Judge of this Court) was appointed as an Arbitrator to determine the disputes which arose between the petitioner herein and the first respondent. The writ petitioner herein filed an application under Section 11 of the Arbitration and Conciliation Act, 1996 (hereinafter REFERRED TO to as the act ) inter alia alleging the following facts;
( 2 ) THE petitioner and respondent No. l entered into a turnkey contract with the second respondent for construction of four Towers at Ghaziabad. In terms of the said contract, the first respondent was required to supply certain material to the second respondent and by an agreement entered into between the petitioner and the first respondent on 17/01/1994 petitioner agreed to supply 7480 cubic meters of finished fill of the specifications mentioned in the agreement. The said contract contains an arbitration agreement which is in the following terms;
"arbitration: disputes arising out of this supply order shall be REFERRED TO to arbitrator (s) in accordance with the provision of Arbitration Act including amendments thereto. The venue of arbitration shall be Delhi. Delhi Courts shall have exclusive jurisdiction in all matters. "
( 3 ) IT is not in dispute that there does not exist any arbitration agreement between the petitioner and the second respondent. The learned single Judge by reason of the impugned order has arrived at a finding of fact that neither any assignment of the contract has taken place nor the records reveal that at the instance of the first respondent, the second respondent has agreed to make payment to the petitioner. It was held that there does not exist any arbitration agreement between the petitioner and the second respondent. Neither the same can be inferred by implication nor an arbitrator can be appointed for the purpose of determining the disputes between the parties, who are not parties to the arbitration agreement. Learned Single Judge found that in fact the petitioner herein had also earlier filed a suit against the second respondent herein.
( 4 ) LEARNED counsel appearing on behalf of the petitioner submits that as the claims of his clients are required to be invoked jointly against the respondents herein, the second respondent is a necessary party. In support of the said contention reliance has been placed on Municipal Council v. Mani Raj and Ors. reported in 2001 III AD (. S. C.) 582. Learned counsel appearing on behalf of the respondents, on the other hand submits that having regard to the provisions contained in Section 2 (e) read with Section 7 of the said Act, the learned single Judge had no jurisdiction to appoint an arbitrator in relation to the purported disputes and differences between the petitioner herein and the second respondent. Arbitration agreement, the learned counsel contended, is a collateral agreement and as such, the same must answer the tests laid down in the interpretation clause as contained in section 2 (d) of the Act. In support Of the said contention, strong reliance has been placed on K. Sasidharan v. Kerala State Film Development corporation (1994) 4 SCC 135 and Tamil Nadu electricity Board v. Sumathi and Others 2000 (2) arb. LR 460 ( SC )
( 5 ) THE sole question having regard to the rival contentions of the parties is as to whether the learned Single Judge was justified in passing the impugned order.
( 6 ) BEFORE adverting to the question raised in the writ petition we may place on record that the first respondent herein has not filed any the writ. petition questioning the impugned order. It is therefore evident that parties to the arbitration agreement had accepted the impugned order. Section 2 (b) defines an "arbitration agreement" to mean an agreement REFERRED TO to in section 7. Section 7 defines an "arbitration Agreement
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