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2013 Supreme(Del) 1495

High Court of Delhi
RAJIV SAHAI ENDLAW, J.
Viom Network Ltd. & Another
Versus
S. Tel Pvt. Ltd.
Arb. P. Nos. 236 of 2012, 9 of 2013, O.M.P. Nos. 206, 173, 312 of 2012 & IAs Nos. 12147, 15653, 12129, 15715 of 2012
Decided On : 11-11-2013

Advocate Appeared:
For the Petitioners:Sanjay Jain, J.P. Sengh, Sr. Advs. with Ms. Anuradha Mukherjee, Abhijit Mittal, Omar Ahmad, Manu, Advocates.
For the Respondent:Dayan Krishan with Gautam Narayan, Amit Gupta, Ms. Asmita Singh, Nikhil Menon, S. Rana, Sanjay Bhatt, Abhishek Anand, Advocates, Sudhir Nandrajog, Sr. Adv.

Headnote:

Arbitration and Conciliation Act, 1996 - Section 14 - Telecom Regulatory Authority of India Act, 1997 - Section 15 - Arbitration agreement - Arbitration clause - Petitioners as Infrastructure Providers Category-I - Infrastructure provided is passive and not active - Infrastructure provider cannot be said to be providing any service to the public or to the user - Objection of the respondent that petitioners are service providers within the meaning of Section 2(1)(j) of the TRAI Act - Disputes arose between the petitioners and the respondent S Tel Pvt. Ltd. are within the jurisdiction of TDSAT - Held, petitioners as infrastructure providers to be not service providers within the meaning of the TRAI Act - TDSAT would not have jurisdiction over disputes between the petitioners and respondent - Remedy of arbitration under the Arbitration Act is not ousted.

Arbitration and Conciliation Act, 1996 - Section 14 - Telecom Regulatory Authority of India Act, 1997 - Section 15 - Appointment of Arbitrator - Arbitral tribunal - TDSAT - Jurisdiction - Arbitration Petitions have been filed upon the failure of the respondent S Tel Pvt. Ltd. to appoint its arbitrator - Respondent S Tel Pvt. Ltd. did not appoint the arbitrator contending the jurisdiction to be of TDSAT - Even after the arbitration clause, the resolution of disputes between infrastructure provider and a telecom licensee is to be before TDSAT and not by the agreed arbitral tribunal - Conduct of the respondent S Tel Pvt. Ltd. in not appointing its arbitrator cannot be found fault with - It is not deemed appropriate to thrust an arbitrator on S Tel Pvt. Ltd. without giving them an opportunity to nominate an arbitrator - Arbitration Petitions are disposed of by granting an opportunity to S Tel Pvt. Ltd. to appoint its arbitrator.

Judgment :

Rajiv Sahai Endlaw, J.

1. The common objection of the respondent S Tel Pvt. Ltd. to all these petitions is that, notwithstanding the existence of the arbitration clause in the agreement, subject matter of each of these petitions, between the petitioner/its predecessor and the respondent, the remedy of arbitration under the Arbitration and Conciliation Act, 1996 (Arbitration Act) is not available for the reason of the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) having the exclusive jurisdiction over the disputes raised, under Section 14 read with Section 15 of the Telecom Regulatory Authority of India Act, 1997 (TRAI Act).

2. Both the petitioners i.e. Viom Network Ltd. and Bharti Infratel Ltd. are a Telecom Infrastructure Service Provider registered as Infrastructure Provider Category-I (IP-I) with the Department of Telecommunications (DoT) and are engaged in the business of building, owning or validly possessing and operating passive infrastructure sites and providing passive telecom infrastructure service to various telecom operators. The respondent S Tel Pvt. Ltd. was on the contrary, a telecom operator, having acquired Unified Access Service Licences to establish, install, operate and maintain Unified Access Service in the areas/circles of Jammu & Kashmir, Himachal Pradesh, Bihar, Orissa, Northeast and Assam. The licences of the respondent S Tel Pvt. Ltd. were however cancelled following the orders of the Supreme Court.

3. Under each agreement, titled ‘Master Services Agreement’, containing the arbitration clause, the petitioners Viom Network Ltd. and Bharti Infratel Ltd. had agreed to, i) make available and provide to the respondent S Tel Pvt. Ltd. access to their passive infrastructure sites to install S Tel’s equipment and to operate and maintain the same; and ii) provide specified operation and maintenance services at each of the said sites.

4. Disputes and differences have arisen between the petitioners and the respondent under the said Agreements, which contained a clause for lock in period, with the petitioners claiming monies from the respondent under the Agreements. The petitioners have accordingly invoked the arbitration clause in the agreement subject matter of each petition and have sought interim relief with respect to the active infrastructure equipment of the respondent installed at the sites of the petitioners and upon the failure of the respondent to appoint Arbitrator/join in appointment of Arbitrator, also sought appointment of Arbitrator. The petitioners, in the OMPs under Section 9 of the Arbitration Act, seek to restrain the respondent from removing, selling, encumbering the said equipment and also receivership of the said equipment to settle their dues for which award is sought in the arbitration proceedings.

5. M/s IDBI Trusteeship Ltd. applied for intervention in the OMPs preferred by M/s Viom Pvt. Ltd., claiming first charge over the said equipment.

6. Finding, that owing to the telecom licences of the respondent having been cancelled and the respondent being now no longer in need of the said active infrastructure equipment and further that the said equipment may with the passage of time deteriorate and become obsolete, vide order dated 18.04.2013, without prejudice to the respective contentions, provision was made for auction thereof and deposit of the sale proceeds with the Registrar General of this Court. Subsequent orders dated 6th August, 2013 and 24th September, 2013 were also made in this regard.

7. The counsel for the respondent has contended that the petitioners as well as the respondent are ‘service providers’ within the meaning thereof in the TRAI Act and therefore it is the TDSAT which has exclusive jurisdiction to entertain and adjudicate the disputes between the two service providers. Reliance is placed on judgment of the TDSAT in Reliance Infratel Ltd. Vs. Etsalat DB Telecom P. Ltd. holding that entities registered with DoT as Infrastructure Provider Ca




















































































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