Back
High Court of Delhi
SANJAY KISHAN KAUL & RAJIV SHAKDHER
M/S. Media Asia Private Limited
Versus
Prasar Bharti & Another
FAO (OS). 318 OF 2008
Decided on : 10-05-2012
Arbitration - Accredited Advertising Agent - Arbitration and Conciliation Act, 1996, Section 11(6)(c) - 11(6)(c) - Summary of the acts and sections referenced and discussed by the court: The court discussed the arbitration clause in the agreement dated 13.01.1995, the appointment of the arbitrator, and the objections raised under section 34 of the Arbitration and Conciliation Act, 1996. The court also highlighted the provisions of section 16 of the said Act and their interpretations, emphasizing the importance of raising jurisdictional objections before the Arbitral Tribunal.
Fact of the Case:
The respondent filed an application under section 11(6)(c) of the Arbitration and Conciliation Act, 1996 on the original side of the court. The appellant, an accredited advertising agent, failed to pay the outstanding balance of Rs.1,22,42,057/- to the respondent despite repeated requests and a legal notice. Disputes arose between the parties, and the matter was referred to arbitration as per the agreement dated 13.01.1995. The arbitrator awarded an amount of Rs.3,33,13,290/- along with costs and future interest at 18% p.a. on the principal amount.
Finding of the Court:
The court found that the objections raised by the appellant under section 34 of the Arbitration and Conciliation Act, 1996 were not tenable. The court also noted that the appellant failed to deposit the awarded amount within the prescribed time, leading to the dismissal of the appeal. The court emphasized the importance of raising jurisdictional objections before the Arbitral Tribunal and highlighted the consequences of failing to do so.
Issues: The issues included the validity of the arbitration agreement, lack of jurisdiction of the Tribunal, and the failure to raise jurisdictional objections before the Arbitral Tribunal.
Ratio Decidendi: The court held that the plea of lack of jurisdiction on the ground of absence of an arbitration agreement cannot be permitted to be raised in proceedings under section 34 of the said Act for setting aside the award, unless good reasons are shown. The court also emphasized the importance of raising jurisdictional objections before the Arbitral Tribunal as per section 16 of the said Act.
Final Decision: The appeal was dismissed with costs of Rs.1 lakh.
SANJAY KISHAN KAUL, J.
1. The respondent filed an application under section 11(6)(c) of the Arbitration and Conciliation Act, 1996 on the original side of this court which was registered as AA No.203/2000. The said application makes a reference to an agreement dated 13.01.1995 entered inter se the parties giving the appellant a status of accredited advertising agent w.e.f. 01.02.1995. It is also the say in the application that from January, 1995 to October, 1997, the appellants’ programme “Ek Se Bad Kar Ek’ was telecast on the National network of DD-1. The appellant failed to pay the bills raised by the respondent form time to time. As against the total billing amount of Rs.12,37,15,132/-, the appellant paid only a sum of Rs.11,14,73,075/- leaving an outstanding balance of amount of Rs.1,22,42,057/-, which has not been paid despite repeated request, including a legal notice. There was no response to the legal notice.
2. Disputes having arisen between the parties, by virtue of the agreement dated 13.01.1995 containing an arbitration clause, the matter was required to be referred to arbitration. The arbitration clause reads as under :-
“In the event of any question, dispute or difference arising under these presents or in connection therewith (except as to any matters the decision of which is specially provided for by these presents), the same shall be referred to the sole arbitration of an officer appointed to be the arbitrator by the Director, General, Doordarshan. It will be no objection that the arbitrator is a Government servant, that he has to deal with the matters to which these presents relate or that in the course of his duties as a Government servant, he has expressed views on all or any of the matters in dispute or difference. The award of the arbitrator shall be final and binding on the parties to these presents.
In the event of the arbitrator dying, neglecting or refusing to act or resigning or being unable to act for any reason, it shall be lawful for the Director General, Doordarshan to appoint another arbitrator in place of the outgoing, arbitrator in the manner aforesaid.
The arbitrator may, from time to time, with the consent of the parties to these presents enlarge time for making and publishing the award.
Upon every and any such reference, the assessment of the costs of and incidental to the references and the award respectively shall be in the discretion of the arbitrator. Subject as aforesaid, the Arbitration Act, 1940 and the rules thereunder and any statutory modifications thereof for the time being in force shall be deemed to apply to the arbitration proceedings under this clause.”
2.1 In terms of the arbitration clause, the Director General, Doordarshan was the designated authority to appoint the arbitrator but that post was lying vacant since 1998, it compelled the respondent to file the application. The appellant was given numerous opportunities to file reply to the application on 28.09.2000, 17.11.2000, 29.11.2000, and the last opportunity on 30.01.2001 but, to no avail. Thus, on 23.04.2001, the learned Single Judge passed an order appointing Justice J.B. Goel (Retired) as the Sole Arbitrator to look into the disputes between the parties.
2.2 The Arbitrator thereafter commenced proceedings and a statement of claim was filed on behalf of the respondent. The appellant filed its defence statement-cum-counter claim and, the case was listed for admission / denial of documents on 30.04.2003. The appellant, however, did not complete the admission / denial of documents and the proceedings were adjourned to 30.05.2003. In the interregnum period, the appellant filed an application dated 06.05.2003 seeking to raise certain jurisdictional issues; which are enumerated in the application as under :-
“(1) Whether reference made in the case is barred by limitation?
(2) Whether Art. 299 of the Constitution of India is attracted to the case and if so, its effect?
(3) Whether there is any valid arbitr
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
