An agreement to constitute an Arbitration Agreement must involve the Arbitral Tribunal determining the rights of the parties in an impartial and judicial manner, with an equal obligation of fairness towards both sides.

JUDGMENT

I.A. 12835/2022

1. This application has been filed by the defendant nos.1 and 2 under Section 8 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the `Act') praying that the parties be referred to arbitration in terms of Clause 14 of the Agreement dated 04.08.2017, on the basis whereof the plaintiff has filed the present suit.

2. The present suit has been filed by the plaintiff, inter alia, praying for a decree of recovery of a sum of Rs.6,89,57,768/- (Rupees Six Crores Eighty-Nine Lakhs Fifty-Seven Thousand Seven Hundred and Sixty-Eight only) alongwith interest thereon from the defendants.

3. It is the case of the plaintiff that the plaintiff had applied to the defendant no.1 for producing a Radio-Programme titled "Chaandi Ke Parde Se" to be broadcasted on the radio channels of the defendant no.1. The plaintiff entered into an Agreement dated 04.08.2017 with the defendant no.1 for broadcasting 260 episodes of approximately 30 minutes duration in two installments and for dividing the net revenue in two equal halves between the parties. The plaintiff claims that the payment on its invoices remained pending from the defendants and, therefore, has filed the present suit for recovery.

4. As noted hereinabove, the defendant nos.1 and 2 have now filed the present application under Section 8 of the Act contending therein that the parties had entered into an Arbitration Agreement, as contained in Clause 14 of the Agreement dated 04.08.2017, and, in view thereof, the present suit is not maintainable and the parties should be referred to arbitration.

5. Clause 14 of the Agreement dated 04.08.2017 is reproduced hereinunder:

"14. In the event of any dispute related to the interpretation or rights or liabilities arising out of this MOU, the decision of DG, AIR shall be final and binding on the parties."

6. The learned senior counsel for the defendant nos.1 and 2/applicants, placing reliance on the judgment of the Supreme Court in Smt. Rukmanibai Gupta v. Collector, Jabalpur and Others, (1980) 4 SCC 556, submits that Clause 14 of the Agreement is an Arbitration Agreement between the parties and, therefore, the present suit is not maintainable, and the parties should be referred to arbitration.

7. On the other hand, the learned counsel for the plaintiff, placing reliance on the judgments of the Supreme Court in K.K. Modi v. K.N. Modi & Ors., (1998) 3 SCC 573; State of Orissa & Anr. v. Damodar Das, (1996) 2 SCC 216; Bihar State Mineral Development Corporation & Anr. v. Encon Builders (I) (P) Ltd., (2003) 7 SCC 418; and International Amusement Limited v. India Trade Promotion Organisation & Anr., (2015) 12 SCC 677, submits that Clause 14 of the Agreement is not an Arbitration Agreement between the parties, but is only an internal mechanism of dispute resolution.

8. I have considered the submissions made by the learned counsels for the parties.

9. Section 8 of the Act is reproduced hereinbelow:

"8. Power to refer parties to arbitration where there is an arbitration agreement.-

(1) A judicial authority, before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party to the arbitration agreement or any person claiming through or under him, so applies not later than the date of submitting his first statement on the substance of the dispute, then, notwithstanding any judgment, decree or order of the Supreme Court or any Court, refer the parties to arbitration unless it finds that prima facie no valid arbitration agreement exists.

(2) The application referred to in sub-section (1) shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof:

Provided that where the original arbitration agreement or a certified copy thereof is not available with the party applying for reference to arbitration under sub-section (1), and the said agreement or certified copy is retained by the other party to that agreement, the