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2018 Supreme(Del) 1781
IN THE HIGH COURT OF DELHI AT NEW DELHI
JAYANT NATH, J.
M/s. Cable Corporation of India Limited - Petitioner
Versus
M/s. Jay Pee Sports International Ltd. & Anr. - Respondents
ARB.P. 789 of 2016
Decided On : 31-07-2018
Important Points
Subject
Arbitration Law - Venue and Seat of Arbitration
Act Referred
ARBITRATION AND CONCILIATION ACT : S.11(6)
CIVIL PROCEDURE CODE : S.16, S.17, S.18, S.19, S.20, S.21
Headnote
Arbitration Act - Appointment of Sole Arbitrator - Section 11(6) - Clause 31 of the General Conditions of the Contract Agreement - Indian Arbitration and Conciliation Act, 1996 - [31. DISPUTE RESOLUTION & ARBITRATION] - [Summary of the acts and sections referenced and discussed by the court: The court discussed Clause 31 and Clause 38 of the Agreement, and referred to the Indian Arbitration and Conciliation Act, 1996. The key legal provisions interpreted were related to the venue and seat of arbitration, and the exclusive jurisdiction of courts in Delhi and Gautam Budh Nagar, U.P. The court's decision was influenced by the interpretation of these provisions and their application to the dispute resolution process.]
Fact of the Case:
The petitioner sought the appointment of a sole arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996, due to disputes arising from a contract for supply and laying of power cables. The respondent failed to pay the sum due, leading to the arbitration request.
Finding of the Court:
The court found that the arbitration proceedings were to be held in Delhi as per Clause 31 of the Agreement, conferring exclusive jurisdiction on all courts in Delhi for arbitration issues. For matters other than arbitration, the courts in Gautam Budh Nagar, U.P. would have exclusive jurisdiction in terms of Clause 38 of the Agreement.
Issues: The main issue was the determination of the venue and seat of arbitration, and the exclusive jurisdiction of courts in Delhi and Gautam Budh Nagar, U.P.
Ratio Decidendi: The court's decision was based on the interpretation of the arbitration clauses in the Agreement, specifically Clause 31 and Clause 38, and their implications on the venue and seat of arbitration, as well as the exclusive jurisdiction of courts in Delhi and Gautam Budh Nagar, U.P.
Final Decision: The petition was allowed, and the parties were referred to the Delhi International Arbitration Centre for the arbitration proceedings, with Delhi being the seat of arbitration.
For the Petitioner: Mr. S. Goel and Mr. Shivam Goel, Advs.
For the Respondent: Mr. Lovkesh Sawhney, Advs.
JAYANT NATH, J.
1. This petition is filed under Section 11(6) of the Arbitration and Conciliation Act, 1996(hereinafter referred to as the Arbitration Act) seeking appointment of a sole arbitrator in terms of the arbitration clause being Clause 31 of the General Conditions of the Contract Agreement dated 09.04.2011.
2. The case of the petitioner is that the petitioner is engaged in the manufacturing and sale of power cables. The petitioner also undertakes the work of manufacture, supply, laying of cables, erection, installation and testing and commissioning of cable work/system. It is pleaded that the respondent No.1-Jaypee Sports International Ltd. stands amalgamated/merged with respondent No.2 in terms of Order dated 14.09.2015 of the Allahabad High Court.
3. Respondent No. 1 asked the petitioner for an offer for the work of supply and laying of 1.5 Kms 220 KV underground cable for their 220 KV sub-station in core area of SDZ at Greater Noida i.e. laying Aluminum, XLPE, 800 sq. mtrs., 220 KV Cables, 7 Nos. Single Core in the root. Pursuant to the offer of the petitioner and negotiations between the parties, the parties entered into a formal agreement dated 09.04.2011 for supply, erection, testing and commissioning of 220 KV Cables-GIS Station for Motor Racing Track within SDZ, Sector 25, Yamuna Expressway, District Gautam Budh Nagar, Uttar Pradesh, India.
4. Disputes arose between the parties. It is the case of the petitioner that the respondent failed to pay a sum of Rs. 1,21,77,147/- towards unpaid invoices for supplies, services and the retention money deducted from the invoices. It has been pleaded that after completion of the assigned work by the petitioner, the Motor Racing Track became operational and the first International Event of Motor Race Formula-1 was held on 30.10.2011. This was followed by another event in October, 2012 and a third event in October 2013. It is pleaded that it is a clear indication that the work of the petitioner was in order.
5. The petitioner also issued a legal notice on 28.06.2014 demanding the said sum of Rs. 1,21,77,147/- along with interest. It is pleaded that for the first time, respondent No. 1 sent an e-mail dated 11.07.2014 stating the amount due has been put on hold on account of the alleged remaining unfinished work. The petitioner thereafter vide notice dated 05.08.2016 approached the respondent for appointment of an arbitrator under Clause 31 of the Agreement invoking the arbitration clause. In terms of the arbitration clause, the petitioner also nominated its arbitrator Ms. Justice Rekha Sharma (Retd.) and called upon the respondent to also nominate their arbitrator in terms of the arbitration agreement. As the respondent failed to take steps, the present petition has been filed. Two opportunities were granted to the respondent to file their reply, namely, on 14.02.2017 and 18.04.2017. However, reply has not been filed.
6. I have heard learned counsel for the parties.
7. Learned counsel for the respondent has not disputed the arbitration clause. He has however pleaded that under Clause 38.1 of the Agreement between the parties, the courts in Gautam Budh Nagar and the High Court of Allahabad shall have exclusive jurisdiction over all matters arising out of the contract. He pleads that in view of this clause, the seat of arbitration would be Gautam Budh Nagar and this court would not have the territorial jurisdiction to adjudicate the present petition. He has relied upon the judgment of the Supreme Court in the case of Indus Mobile Distribution Pvt. Ltd. vs. Datawind Innovations Pvt. Ltd. & Ors., (2017) 7 SCC 678 to support his contention. He also relies upon judgments of the Supreme Court in the case of Rajasthan State Electricity Board vs. Universal Petrol Chemicals Ltd., (2009) 3 SCC 107 and Balaji Coke Industry (P) Ltd. vs. Maa Bhagwati Coke Gujarat Pvt. Ltd., (2009) 9 SCC 403 to support his contentions.
8. I may look at the terms of the agreement dated 09.04.2011 executed
