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2018 Supreme(Del) 359
IN THE HIGH COURT OF DELHI AT NEW DELHI
NAVIN CHAWLA, J.
IMV INDIA PVT LTD - Petitioner
Versus
STRIDEWEL INTERNATIONALTHROUGH ITS SOLE PROPRIETOR MR.MAHESH CHAUDHRI & ANR - Respondents
ARB.P. 192 of 2018 to 209 of 2018 & ARB.P.211 of 2018
Decided on : 18-04-2018
Advocate Appeared:
For the Appellant : Mr.Kishan Rawat, Ms.Jayati Parasher and Mr.Rjan Narain, Advs.
For the Respondent: Mr.Deepak Khadaria, Adv.
The presence of an Arbitration Agreement requires consensus ad idem between the parties, and the jurisdiction of arbitrators is derived from the consent of the parties.
Headnote:
Arbitration Agreement - Appointment of Sole Arbitrator - Arbitration and Conciliation Act, 1996, Section 11 - Clause 5 of Invoice(s)
Fact of the Case:
The petitioner filed petitions seeking appointment of a Sole Arbitrator for disputes arising from Invoices. The respondents denied the existence of an Arbitration Agreement and the validity of the appointment of a sole arbitrator.
Finding of the Court:
The court found that the alleged Arbitration Agreement on the reverse side of the Invoice(s) did not establish ad idem between the parties. The court dismissed the petitions, stating that no Arbitration Agreement could be said to have come into existence between the parties.
Issues: Existence of Arbitration Agreement, Validity of Sole Arbitrator Appointment
Ratio Decidendi: An Arbitration Agreement requires consensus ad idem between the parties. The mere presence of a clause on the reverse side of an invoice does not establish an Arbitration Agreement. The jurisdiction of arbitrators is derived from the consent of the parties.
Final Decision: The petitions were dismissed, leaving it open to the parties to initiate other appropriate proceedings for dispute resolution. No order as to cost was issued.
NAVIN CHAWLA, J.
1. These petitions under Section 11 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the ‘Act’) have been filed by the petitioner seeking appointment of a Sole Arbitrator for adjudicating the disputes that have arisen between the parties in relation to the Invoice(s) issued by the petitioner for supply of veterinary application material and equipment made by it to the respondents. The Arbitration Agreement relied upon by the petitioner is contained on the back of the Invoice(s) in the form of Clause 5 thereof, which is reproduced herein below:
“5. Any disputes or claims arising on or out of or in connection with quotations, orders or contracts for the supply or materials by the company shall be referred to arbitration of The New Delhi Chamber of Commerce and in accordance with the rules of the Chamber's Tribunal or Arbitration. Any award made by such Tribunal shall be final and binding on both parties. No claim will be considered unless reported to the company within 4 days from receipt of material and the company is given an opportunity to make an investigation.”
2. The petitioner invoked the alleged Arbitration Agreement by way of its notice dated 11.07.2017. The respondents by their letter dated 08.08.2017 stated as under:
“Further, in your letter you have referred to clause 5 of the invoice raised by you on us, to initiate the arbitration proceedings to resolve the so called disputes which according to us have no relevance or meaning. First and foremost, there is no dispute as you are avoiding to reconcile your accounts with our accounts and secondly, assuming without admitting the existence of a dispute, the necessary remedial course is mentioned in Clause 5 of the invoice which reads as under:
“5. Any disputes or claims arising on or out of or in connection with quotations, orders or contracts for the supply or materials by the company shall be referred to arbitration of the The New Delhi Chamber of Commerce and in accordance with the rules of the Chamber's Tribunal or Arbitration. Any award made by such Tribunal shall be final and binding on both parties. No claim will be considered unless reported to the company within 4 days from receipt of material and the company is given an opportunity to make an investigation.”
Therefore, the only recourse available to your company (only in case of existence of a dispute) is to refer to arbitration of The New Delhi Chamber of Commerce, a forum, which has been specially mentioned by your company. It is shocking to learn that no such Chamber of Commerce exist, it appears it is also a ploy instituted by your company to dupe people who have claims/disputes against the company. In absence of any such chamber of Commerce, the dispute could never get settled and as a result, your company would have been withholding substantial sums due to people unless people opted to avail other remedies in law. Also, in absence of such a chamber of arbitrator, it is not at whims and fancies of your company to appoint a sole arbitrator based or your choice. Therefore, such a unilateral appointment is completely illegal and void.”
3. The petitioner thereafter filed a petition under Section 11 of the Act before this court being Arbitration Petition No.625/2017. The same was however dismissed as withdrawn on a plea taken by the respondents that a single petition with respect to 19 distinct Arbitration Agreements is not maintainable.
4. The present set of petitions was thereafter filed by the petitioner.
5. The learned counsel for the respondents submits that the relationship between the parties is governed by the letter(s) of appointment of the respondents as an agent of the petitioner. He submits that such letter(s) were issued from time to time, the last being on 02.04.2012. In none of these letter(s) there is an Arbitration Agreement between the parties. He further submits that on the other hand, these letter(s) expressly state that any disputes arising from th
