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2018 Supreme(Del) 558

IN THE HIGH COURT OF DELHI AT NEW DELHI
SANJEEV SACHDEVA, J.
Indeen Bio Power Limited – Petitioner
Versus
M/S. Efs Facilities Service (India) Pvt. Ltd. – Respondent
Arb. A. (Comm.) 39 of 2016
Decided On : 26-04-2018

Advocates Appeared:
For the Petitioner:Mr. Hiroo Advani, Advocate with Mr. Tariq Khan, Ms. Nikta Chitale and Ms. Ranu Purohit, Advs.
For the Respondents: Mr. Dharmendra Rautray, Mr. Vasanth Raja, Ms. Tara Shahani and Mr. S. Babulkar, Advs.

Headnote:

Arbitration & Conciliation Act, 1996 - Section 16, 37 - Arbitration action - Objection - Jurisdiction - Maintainability of - Agreement of the parties - Issue with regard to jurisdiction - Lack jurisdiction of the Tribunal - Remedy of the opposite party in a case where such an objection is sustained - Objection raised by the Respondent is rejected - It is held that the Arbitral Tribunal having ruled that it has no jurisdiction - An appeal would lie under Section 37 of the Act, against the order - Appeal under section 37 of the Act, is maintainable.

JUDGMENT :

SANJEEV SACHDEVA, J.

1. This appeal under Section 37 of the Arbitration & Conciliation Act, 1996 (hereinafter referred to as ‘the Act’), impugns order/award dated 15.09.2016 of the Sole Arbitrator passed under Section 16 of the Act.

2. The appellant had filed the claim before the Arbitral Tribunal raising several claims. By the impugned order/award dated 15.09.2016, the Arbitral Tribunal has held that the agreements under which the proceedings had been initiated did not come into existence and, as such, the Tribunal did not have any jurisdiction to adjudicate the disputes between the parties.

3. A preliminary objection was raised by the respondent, whereby, it was contended that order dated 15.09.2016 was an arbitral award and could be challenged only by way of a petition under Section 34 of the Act and not by way of an appeal under Section 37 of the Act.

4. By order dated 17.08.2017, limited arguments were heard on the preliminary objections raised by the respondent. Accordingly, in this order, I propose to deal only with the preliminary objection raised.

5. For the purpose of deciding the preliminary objection, it would be necessary to refer to some brief facts leading to the filing of the claims before the Arbitral Tribunal.

6. On 02.05.2010, the claimant/appellant Indeen Bio Power Limited (hereinafter referred to as ‘the claimant’) and Dalkia India Pvt. Ltd. entered into a project development agreement which provided for exploring feasibility of the project. As per the Appellant/claimant, the parties agreed upon and settled the terms and conditions of the Engineering Procurement Construction (EPC) contract on 18.01.2011.

7. Though, it is the case of the appellant that since the terms and conditions of the EPC were finalised, no formal execution of the contract was required. However, the stand of the respondent is that there is no effective contract between the parties and though the terms had been agreed upon there were still some formalities required to be carried out and the contracts yet to be executed. As per the claimant, the EPC agreement was split into three agreements, i.e., Service Contract Agreement, Supply Contract Agreement and Works Contract Agreement and they were duly initialled by the parties on 16.03.2012.

8. On 28.03.2012, the appellant invoked arbitration under Article 13.2 of the Service Contract Agreement alleging breaches.

9. The respondent, in reply, contended that the Project Development Agreement expired on 02.08.2010 and the Synchronisation and Co-ordination Agreement (SCA) did not become effective as under its terms the claimant was required to issue ‘notice to proceed’ under the contract agreement, i.e., the Works Contract Agreement, Service Contract Agreement and Supply Contract Agreement, which had not been executed between the parties. It was contended that there could be no invocation of the arbitration clause as there was no effective agreement between the parties.

10. On a notice being given under Section 11 of the Arbitration & Conciliation Act, 1996, this Court referred the disputes to arbitration by order dated 21.01.2013, however, left the issue of determining the existence or non-existence of the arbitration agreement under Section 16 of the Act.

11. The Arbitral Tribunal noted the agreement of the parties that the issue with regard to jurisdiction, raised in the application be decided as the first issue along with the final award. Consequent thereto, the Arbitral Tribunal, based on the material placed before it and after hearing submissions of the parties, came to a conclusion that the three contracts did not commence and the terms of the agreement did not come into existence and since they did not come into existence, the SCA including clause 19.3 could not operate for want of compliance with the stipulation to issue Notice to Proceed and, accordingly, concluded that the Tribunal had no jurisdiction to adjudicate the disputes between the parties. Even if the arbitration clause was co






























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