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2020 Supreme(Del) 649
IN THE HIGH COURT OF DELHI AT NEW DELHI
Siddharth Mridul, Talwant Singh, JJ.
Jindal Steel & Power Ltd - Appellant
Versus
State Trading Corporation Of India - Respondent
First Appeal From Order (O S) (Comm) No. 61 of 2020
Decided On : 04-06-2020
Gopal Jain, Advocate, Rajiv Nayar, Advocate, Saket Sikri, Advocate, Sumit Attri, Advocate, George Varghese, Advocate, Nikitha Shenoy, Advocate, Siddhant Sharma, Advocate, Kartik Nayyar, Advocate, Tarkeshwar Nath, Advocate
The central legal point established in the judgment is the court's authority to appoint an Arbitrator and ensure expeditious adjudication of disputes under the Arbitration and Conciliation Act, 1996.
Headnote:
Arbitration - Appointment of Arbitrator - Arbitration and Conciliation Act, 1996 - Section 9, Clause 19 of the Associateship Agreement
Fact of the Case:
The appeal was filed by M/s. Jindal Steel & Power Limited seeking to set aside the order declining the interim relief under Section 9 of the Arbitration and Conciliation Act, 1996. The dispute arose from the Associateship Agreement dated 24th September, 2014 between the parties.
Finding of the Court:
The court appointed a retired Judge, Justice Ms. Reva Khetrapal, as the Arbitrator to adjudicate the dispute between the parties. It directed the Appellant to approach the Indian Council of Arbitration (ICA) to file the petition/application raising the dispute and deposit the requisite fees and documents as per the rules of ICA.
Issues: The main issue was the appointment of an Arbitrator and the adjudication of the dispute regarding Bank Guarantees / Performance Bank Guarantees covered under clause 19 of the Associateship Agreement.
Ratio Decidendi: The court's decision was influenced by the urgency of the matter and the need for efficient and expeditious disposal of disputes. It aimed to prevent undue delay in appointing the arbitrator and to set the adjudication mechanism in motion without becoming redundant.
Final Decision: The appeal and the pending case before the Single Judge were disposed of, and the court appointed Justice Ms. Reva Khetrapal as the Arbitrator to adjudicate the dispute between the parties.
JUDGMENT
Talwant Singh, J. - The present appeal has been filed by M/s. Jindal Steel & Power Limited (hereinafter called Appellant) praying for setting aside the impugned order dated 29 of April 2020 passed by the Ld. Single Judge in OMP (I) COMM 89 / 2020 titled "Jindal Steel & Power Limited vs. STC & Others" by which the interim application under Section 9 of the Arbitration and Conciliation Act, 1996 was taken up for hearing and the prayer for ad-interim relief was declined in the following words:
"26. In view of the above submissions, I may say that a) the respondent No.1 had not exhibited any intention to invoke the PBGs; b) the parties were ad-idem on continuation of the PBGs till the contract was over i.e. till on expiry of the guarantee period; c) even the conduct of the petitioner in extending the PBGs at least seven times prior, would indicate such intention; and d) the CG or the PDCs as offered cannot be considered to be an alternative for the PBGs; and e) a bare perusal of the terms and conditions of the agreement dated 24.09.2014 as also of the PBGs would only show these PBGs need to be continued till the term of the agreement is over. Accordingly, no relief as sought for regarding release of PBGs can be granted. Thus, while directing the petitioner to extend the PBGs till the disposal of this petition and further directing respondent No.1 not to encash / invoke it till such time, this petition be listed before the Roster Bench for directions on 15.07.2020."
2. Notice of the appeal was issued to the respondents. Part arguments heard. At this stage both the contesting parties agree that as per the Associateship Agreement dated 24th September, 2014, vide clause number 19, the disputes between Appellant and Respondent No.1 (STC) are to be adjudicated by way of arbitration as per Rules of Indian Council of Arbitration (ICA). Clause 19 of the Associateship Agreement is reproduced hereunder:
"19. Settlement of Dispute-Arbitration and Governing Law
All and any dispute or difference whatsoever arising between the parties out of or relating to the construction, meaning, scope, operation or effect of this contract or the validity or the breach thereof shall be settled by arbitration in accordance with the Rules of Arbitration of the Indian Council of Arbitration and the award made in pursuance thereof shall be binding on the parties. Indian laws shall be applicable with venue being at New Delhi.
JSPL acknowledges and agrees that the Arbitration between STC and foreign buyer (as per terms of the Foreign Contract) will be referred to ICC, Singapore and shall be held under foreign laws. However, STC shall appoint an arbitrator under intimation to JSPL for foreign arbitration."
3. The present dispute has been raised under the Arbitration & Conciliation Act, 1996. The main objectives of the Arbitration and Conciliation Act, 1996 are to make provision for an arbitral procedure which is fair, efficient and capable of meeting the needs of the specific arbitration; to provide that the arbitral tribunal gives reasons for its arbitral award; to ensure that the arbitral tribunal remains within the limits of its jurisdiction; to minimise the supervisory role of courts in the arbitral process and to provide that every final arbitral award is enforced in the same manner as if it were a decree of the court.
4. Learned Senior Counsel appearing for the Appellant has requested that a retired Ld. Judge, who is on the panel of ICA, may be appointed as an Arbitrator so as to save time as the Appellant is likely to suffer irreparable loss due of delay in adjudication of the interim relief claimed by it as the ICA may take a long time in finalising the name of the Arbitrator. Ld. Counsel for Respondent No.1 submits that STC is ready to submit to the jurisdiction of the ICA but the appointment of Arbitrator should be left open at the discretion of ICA as per its Rules.
5. The underlining principle of the Arbitration & Conciliation Act, 1996 is to str
