Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2021 Supreme(Del) 36

IN THE HIGH COURT OF DELHI
VIBHU BAKHRU, J.
Jones Lang Lasalle Building Operations Private Limited - Appellant
Versus
Techpark Maintenance Services Private Limited - Respondent
ARB.P. No. 629 of 2020 & I.A. No. 10833 of 2020
Decided On : 14-01-2021

Advocate Appeared:
For the Appellant :Anupam Srivastava, Advocate.
For the Respondent:Lokesh Bhola, Aparna Gupta, Advocates.

The period of limitation for invoking arbitration runs from the date of the order referring the parties to arbitration, not from the date of the first notice invoking arbitration.

Headnote:
Arbitration - Property Management Agreement - Arbitration and Conciliation Act, 1996, Section 11(6) - 23. DISPUTE RESOLUTION - Summary: The court allowed the petition filed under Section 11(6) of the Arbitration and Conciliation Act, 1996, appointing a Sole Arbitrator through the Delhi International Arbitration Centre (DIAC) to adjudicate the disputes arising from a Property Management Agreement. The court held that the invocation of the arbitration agreement was not barred by limitation and that the period of limitation would run from the date of the order referring the parties to arbitration, not from the date of the first notice invoking arbitration. The court also directed the arbitration to be conducted under the aegis of DIAC in accordance with its rules.
Fact of the Case:

The petitioner filed a petition under Section 11(6) of the Arbitration and Conciliation Act, 1996, seeking the appointment of an Arbitrator to adjudicate disputes arising from a Property Management Agreement. The respondent had engaged the petitioner for maintenance services as per the Agreement, but disputes arose regarding unpaid invoices. The respondent filed an application under Section 8 of the Act, seeking arbitration, which was allowed by the court. The petitioner then issued a notice proposing the name of an Arbitrator, but the respondent claimed the invocation of arbitration was barred by limitation.
Finding of the Court:

The court found that the present application was not barred by limitation and allowed the petition, appointing a Sole Arbitrator through the Delhi International Arbitration Centre (DIAC) to conduct the arbitration in accordance with its rules.
Issues: The issues involved the invocation of the arbitration agreement, the applicability of limitation, and the appointment of an Arbitrator.
Ratio Decidendi: The period of limitation for invoking arbitration runs from the date of the order referring the parties to arbitration, not from the date of the first notice invoking arbitration. The court has the power to appoint an Arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996.
Final Decision: The court allowed the petition, appointed a Sole Arbitrator through DIAC, and directed the arbitration to be conducted under the aegis of DIAC in accordance with its rules.

JUDGMENT :

[Hearing held through video conferencing]

1. The petitioner has filed the present petition under Section 11(6) of the Arbitration and Conciliation Act, 1996 (hereafter ‘the Act’), inter alia, praying that an Arbitrator be appointed to adjudicate the disputes that have arisen between the parties in respect of a Property Management Agreement entered into between them.

2. The parties had entered into a Property Management Agreement (hereafter ‘Agreement’) on 01.12.2011, in terms of which, the respondent had engaged the petitioner for providing maintenance services as set out in the said Agreement.

3. On 01.01.2013, a Letter of Intent was executed by the respondent extending the time of the said Agreement for a further period of one year.

4. Admittedly, certain disputes have arisen in connection with the said Agreement. The petitioner claims that the invoices raised for the period 17.07.2013 to May, 2014 remain unpaid.

5. In view of the above, the petitioner sent a notice demanding a sum of Rs.68,92,134.70 (Rupees Sixty Eight Lakhs Ninety Two Thousand One Hundred Thirty Four and Seventy Paise) along with interest @ 18% p.a. The learned counsel appearing for the respondent states that the said notice dated 06.07.2015 also invoked the arbitration clause as set out in the Agreement.

6. Thereafter, on 31.05.2016, the petitioner instituted a suit (Civil Suit No.1190/2016) before the court of Civil Judge, Gurgaon for recovery of the amounts claimed by it. On 17.04.2018, the respondent filed an application under Section 8 of the Act praying that the parties be referred to arbitration in terms of their Agreement.

7. The said prayer was allowed by an order dated 17.04.2018. The operative part of the said order reads as under:-

“5. The present suit has been filed by the plaintiff/respondent seeking recovery of Rs. 88,73,622/- alongwith pendent-lite and future interests @ Rs. 15 % per annume on the ground that the defendant has availed its services under property management agreement dated 01.12.2011 but the defendant started evading the invoices raised by the plaintiff and failed to pay the outstanding amount. In reply to this application, it is admitted that plaintiff and defendant had entered into an agreement dated 01.12.2011 for providing property management services. In the application in hand, defendant has averred that the said agreement was executed between the plaintiff and defendant and it was duly executed between the parties to the suit. A perusal of the said agreement clearly reveals that there is signature of the authorised representative of the defendant company as well as of the plaintiff company at the botom of every page of agreement, and as per clause 23 of this agreement, it has been clearly mentioned that in the event of any dispute between the plaintiff and defendant, the matter shall be referred to a penal of three arbitrators, with the client and Property Manager appointing one arbitrators each and the arbitrators so appointed nominating a third and further that the place of arbitration shall be Delhi. Since there is no denial by the plaintiff that the Property Management Agreement dated 01.12.2011 is not signed by there authorise representative, therefore clause 23 of this agreement specifically goes in favour of applicant/defendant company. Moreover, placing reliance on case title as P. Anand Gajapathi Raju & ors. Vs. P.V.G. Raju & ors., Hindustan Petroleum Corporation Ltd. Vs. Pink City Midway Petroleums, AIR 2003(SC)2881, it is clear that the court has power to refer the parties to the Arbitration. Consequently, the present application is hereby allowed and the present suit is hereby dismissed by virtue of application in hand and parties to the suit are directed to proceed before the Arbitration as per terms of the Property management agreement dated 01.12.2011. File be consigned to record-room after due compliance.”

8. Thereafter, the petitioner once again issued a notice dated 28.04.2018 proposing the name of

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2021 Supreme(Del) 36

IN THE HIGH COURT OF DELHIVIBHU BAKHRU, J.Jones Lang Lasalle Building Operations Private Limited - AppellantVersusTechpark Maintenance Services Private Limited - RespondentARB.P. No. 629 of 2020 & I.A. No. 10833 of 2020Decided On : 14-01-2021

The period of limitation for invoking arbitration runs from the date of the order referring the parties to arbitration, not from the date of the first notice invoking arbitration.

Cases Referred (1)

IN THE HIGH COURT OF DELHI
VIBHU BAKHRU, J.
Jones Lang Lasalle Building Operations Private Limited - Appellant
Versus
Techpark Maintenance Services Private Limited - Respondent
ARB.P. No. 629 of 2020 & I.A. No. 10833 of 2020
Decided On : 14-01-2021