Back
2017 Supreme(Del) 3439
IN THE HIGH COURT OF DELHI AT NEW DELHI
SANJEEV SACHDEVA, J.
Masyc Projects Private Limited – Petitioner
Versus
Jaiprakash Associates Limited – Respondent
ARB. A. (COMM.) Nos. 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, 40 of 2017
Decided On : 16-10-2017
For the Petitioners: Mr. Tarun Sharma, Ms. Akanksha Kapoor and Mr. Rahul Gupta.
For the Respondents: Mr. K. Datta, Mr. Manish Srivastava and Mr. Shagun Trisala.
The main legal point established is that a full and final settlement, including the actual payment in terms of the settlement, is necessary to extinguish arbitrable disputes.
Headnote:
Arbitration & Conciliation Act - Settlement Agreement - 30.03.2015 - [Section 37 of the Arbitration & Conciliation Act, 1996] - The court discussed the settlement agreement reached on 30.03.2015 and its implications under the Arbitration & Conciliation Act. The court highlighted the importance of a full and final settlement in extinguishing arbitrable disputes and emphasized the need for the actual payment in terms of the settlement to put an end to the arbitrability of disputes.
Fact of the Case:
The appellant invoked arbitration due to disputes over payments for purchase orders. A meeting on 30.03.2015 led to a settlement agreement, but the appellant claimed the settlement was not final as the full payment was not made.
Finding of the Court:
The court found that the settlement agreement was not final as the full payment was not made, and therefore, the disputes were still arbitrable.
Issues: The main issue was whether the settlement agreement reached on 30.03.2015 constituted a full and final settlement of the disputes, thereby extinguishing the arbitrability of the disputes.
Ratio Decidendi: The court held that for a dispute to be no longer arbitrable, there should be a full and final settlement, and the dispute should have been finally settled. Mere agreement on settlement terms does not extinguish arbitrable disputes; actual payment in terms of the settlement is necessary.
Final Decision: The court allowed certain arbitration appeals and dismissed others, remitting the proceedings to the Arbitrator for further directions.
SANJEEV SACHDEVA, J.
1. By these appeals under Section 37 of the Arbitration & Conciliation Act, 1996 (hereinafter referred to as the Act), the appellants impugns order dated 18.08.2017 passed by the Arbitrator thereby holding that there is no arbitral dispute which could be adjudicated upon by the tribunal.
2. The respondents had placed 12 separate purchase orders on the appellant for the Design, Engineering, Manufacture, Supply and Supervision of the Erection & Commissioning pertaining to the Material Handling Belt Conveyors for different projects.
3. As per the appellant, the disputes arose with regard to the payments to be made towards the said purchase orders. Appellant invoked arbitration and Arbitrator was appointed to adjudicate the claims of the appellant with regard to the said purchase orders.
4. Pending the arbitral proceedings, the parties attempted to resolve their disputes and accordingly a meeting took place on 30.03.2015 and a settlement agreement was executed.
5. Pursuant to the said settlement agreement, respondents issued a cheque on 31.03.2015 for Rs. 58,53,356/-. The said cheque was accepted and encashed by the petitioner.
6. As per the respondents in terms of the settlement agreement, the appellant was to withdraw all proceedings pending before the Arbitrator.
7. The respondents took an objection before the Arbitrator that the disputes between the parties had been settled by virtue of the settlement agreement dated 30.03.2015 and there was no dispute left to be arbitrated upon by the Arbitrator.
8. The Arbitrator accepted the contention of the respondent and has held that the terms recorded in the minutes of meeting dated 30.03.2015 amounted to a settlement agreement between the parties and accordingly there was no arbitral disputes, which could be adjudicated upon by the Arbitrator.
9. Learned counsel for appellant contends that the claim of the appellant was much more than what was recorded in the settlement meeting dated 30.03.2015.
10. It is contended that the said terms were agreed to solely on the ground that the entire payment would be made in terms of the settlement agreement.
11. It is further contended that the minutes of meeting dated 30.03.2015 specifically provided that all the cheques were to be issued by the respondents in the sum of Rs. 203.77 by 31.03.2017 though payable till 20.04.2015.
12. It is contended that the settlement terms dated 30.03.2015 recorded that a draft letter would be issued by the appellant, which would be vetted by the respondent, and thereafter parties were to execute a settlement agreement and submit to the Sole Arbitrator.
13. Learned counsel further submits that since the respondents failed to issue the post dated cheques in terms of the settlement agreement and also failed to settle the terms of the settlement and no settlement agreement was entered into between the parties, the same did not constitute a full and final settlement of all the claims of the petitioner.
14. Learned counsel for the respondent contends that the minutes of the meeting dated 30.03.2015 was full and final settlement of all claims of the appellant and since the appellant has accepted the minutes of meeting and also accepted part payment under the same and the appellant can now be permitted to resile from the same and pursue the arbitration proceedings.
15. Learned counsel further submits that the cheques in terms of the settlement agreement were ready to be handed over but were not handed over because the appellant sought an amendment in the settlement agreement.
16. It is conceded that no settlement agreement was drawn up or signed by the parties.
17. It is contended that no settlement agreement was necessary as the minutes of meeting dated 30.03.2015 constituted a complete settlement and recorded that all the terms and conditions agreed between the parties.
18. By the impugned order dated
