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IN THE HIGH COURT OF DELHI AT NEW DELHI
Chandra Dhari Singh, J.
Intech Brinechem Limited – Appellant
Versus
De Dietrich Process Systems India Pvt. Ltd. – Respondent
Arb.P. 1410 of 2022
Decided On : 23-03-2023
Arbitration Act - Appointment of Arbitrator - Section 11(6) - Clause 13 of the Agreement - Rules of Arbitration of the Indian Council of Arbitration
Fact of the Case:
The petitioner, M/s Intech Brinechem Limited, filed a petition seeking the appointment of an arbitrator to adjudicate disputes with the respondent, M/s DE Dietrich Process Systems India Pvt. Ltd., arising from an Agreement. The respondent objected to the petition, citing non-compliance with the arbitration clause and the Rules of Arbitration of the Indian Council of Arbitration.
Finding of the Court:
The court found that the disputes between the parties were arbitrable and inclined to refer the parties to arbitration, despite objections raised by the respondent regarding the procedure followed for invoking the arbitration proceedings.
Issues: The issues revolved around the compliance with the arbitration clause, specifically Clause 13 of the Agreement, and the Rules of Arbitration of the Indian Council of Arbitration, raised by the respondent as objections to the petition.
Ratio Decidendi: The court emphasized that resolution of a dispute by arbitration is a matter of agreement between the parties and should not be discouraged by formal and procedural technicalities. It also highlighted that observance of the Rules of Arbitration of the Indian Council of Arbitration is not mandatory unless both parties are in consensus.
Final Decision: The court appointed Dr. Justice B.S. Chauhan as a sole arbitrator to adjudicate the disputes between the parties, ensuring compliance with the Arbitration and Conciliation Act, and directed the parties to appear before the arbitrator within 10 days.
ORDER
Chandra Dhari Singh, J. (Oral)--The instant petition under Section 11(6) of the Arbitration and Conciliation Act, 1996 (hereinafter "Arbitration Act") has been filed on behalf of the petitioner seeking the following reliefs:
"a) Pass appropriate orders to appoint an Arbitrator to adjudicate the disputes between the petitioner and the Respondent.
b) pass any such order or orders as this Hon'ble Court may deem fit proper in the interest of justice, equity and fair play."
2. The petitioner, i.e., M/s Intech Brinechem Limited is a company incorporated under the provisions of the Companies Act, 1956 having its registered office at Plot No.27, Sector-34, Gurugram-122004 and the respondent, i.e., M/s DE Dietrich Process Systems India Pvt. Ltd. is a company duly incorporated under the provisions of the Companies Act, 1956 having its registered office at AWFIS, Inspire BKC, Unit No.4, 3rd Floor, Main Road, G Block, Bandra Kurla Complex, Bandra (East), Mumbai-400051. The respondent is engaged in the business of detailed engineering, manufacturing and supply of plants related equipment and the petitioner company is in the process of setting up a green field plant of Bromine Extraction at Kutch, Gujarat.
3. The parties came together when the respondent approached the petitioner for providing services of detailed engineering, along with the plant and machinery as required by the petitioner company and thus, the parties entered into an Agreement on 3rd May 2022 (hereinafter "the Agreement").
4. The petitioner, accordingly, paid a sum of Rs.5,30,00,000/- as advance to the respondent in three parts i.e. Rs.1,00,00,000/- paid on 26th February, 2022, Rs.2,00,00,000/- paid on 22th June, 2022 and Rs.2,30,00,000/- paid on 16th August, 2022 through Bank transfer against which the respondent, through its parent company and from M/s Societe Generale, provided a Bank Guarantee from Paris, France.
5. The learned counsel appearing on behalf of the petitioner submitted that after the receipt of the advance amount, the respondent absolutely failed to fulfil its obligations from the very beginning and to carry out the work as per the Agreement. It is further submitted that the officers of the petitioner made several communications to the respondent requesting it to fulfil its obligations as per the Agreement and carry out the work, however, no action was taken by the respondent.
6. It is submitted on behalf of the petitioner that due to the delay attributable to the respondent, in carrying out and completing the work, the petitioner suffered huge losses. The petitioner, therefore, served an undated Notice under Section 21 of the Arbitration Act upon the respondent invoking Clause 13 of the Agreement to settle the disputes arisen between the parties by the appointment of an Arbitrator, which was duly replied to by the respondent company vide letter dated 14th November, 2022 denying the entire dispute and contending that there were no disputes between the parties for the purpose of invoking Clause 13 of the Agreement. It was further requested by the respondent company vide the said letter that if there was any dispute between the parties, the same shall be settled amicably.
7. The learned counsel for the petitioner, therefore, prays that in accordance with Clause 13 of the Agreement dated 3rd May 2022, an arbitrator may be appointed in order to adjudicate the disputes between the parties.
8. The learned counsel appearing on behalf of the respondent submitted that he has filed the reply to the instant petition vide Diary No. 327863/2023, however, the same is lying under objections. During the arguments, learned counsel for the respondent handed over a copy of the reply to this Court, which is taken on record.
9. The learned counsel for the respondent raised objections to the contents of the petition on merits and also submitted that the petitioner has failed to invoke Clause 13 of the Agreement in accordance with the terms laid therein. It is submi
AI
The main legal point established in the judgment is that the resolution of disputes by arbitration is a matter of agreement between the parties and should not be hindered by formal and procedural tec....
The pre-arbitration procedures under the arbitration clause are not always mandatory, and the court may refer disputes to arbitration if the requisites of arbitrability and notice under the Arbitrati....
The main legal point established in the judgment is the importance of party autonomy in arbitration, the enforceability of the entire arbitration clause, and the conditional acceptance of arbitration....
A non-signatory to an arbitration agreement cannot invoke the arbitration clause of the agreement to which it is not a party.
A party must first invoke all prescribed pre-arbitration mechanisms defined in their contract, including consultations with an Architect, before seeking judicial appointment of an arbitrator under th....
The court must dismiss a petition for arbitration if the arbitration clause is not properly invoked as specified in the agreement.
The main legal point established in the judgment is that the appointment of an independent sole arbitrator is necessary, and the refusal of the petitioner to participate in conciliation proceedings d....
Only a party to the arbitration agreement can challenge the appointment of an arbitrator under Section 12 of the Arbitration and Conciliation Act, 1996.
An arbitration award cannot be invalidated for unilateral appointment of arbitrators if the parties had the opportunity to nominate their respective arbitrators through an independent institute, main....
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