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IN THE HIGH COURT OF DELHI
Sanjeev Narula, J.
Saksham Impex Pvt. Ltd. - Appellant
Versus
Nagesh BC - Respondent
Arb. P. 432 of 2021 & I.As. 9484 of 2021, 9485 of 2021, 9498 of 2021, 9499 of 2021 and 9500 of 2021
Decided On : 04-08-2021
The Court emphasized that disputes concerning the coercive signing of an arbitration agreement should be resolved by the Arbitral Tribunal, affirming limited judicial intervention under Section 11(6A) of the Arbitration Act.
Headnote:(A) Arbitration and Conciliation Act, 1956 - Section 11(6A) - Arbitration agreement - Dispute arose between employer and employee regarding coercion in signing Appraisal Letter containing arbitration clause - Court emphasized limited jurisdiction under Section 11(6A) to determine existence of arbitration agreement only. - Employer sought appointment of Sole Arbitrator. (Paras 2, 6, 9, 12)
(B) Jurisdictional objections - The Respondent's claims regarding coercion and non-arbitrability due to the nature of employment categorized as non-workman require adjudication by the Arbitral Tribunal and not the Court. - The court shall not decide merits of the individual claims at this stage. (Paras 7, 10, 12)
Facts of the case:
Petitioner contended that disputes arose with a former employee regarding the interpretation of an Appraisal Letter containing an arbitration clause. The Respondent resisted the arbitration, alleging coercion in signing the agreement and raised an industrial dispute.
Findings of Court:
The Court found the prima facie existence of an arbitration agreement and determined that all objections regarding the validity and arbitrability would be adjudicated by the Arbitral Tribunal.
Issues: The key issues involved the validity of the arbitration clause, the coercion of the agreement, and the employment status of the Respondent in determining arbitrability.
Ratio Decidendi: The Court held that the agreement was valid for arbitration based on Section 11(6A) and that disputes regarding coercion must be settled by the Arbitral Tribunal, reaffirming minimal judicial interference as mandated by the kompetenz-kompetenz principle.
Result: Petition allowed; Sole Arbitrator appointed.
JUDGMENT
[VIA VIDEO CONFERENCING]
Sanjeev Narula, J. (Oral):--M/s Saksham Impex Pvt. Ltd. - the employer, contends that disputes have arisen with its erstwhile employee Mr. Nagesh BC, and the court should appoint a Sole Arbitrator.
2. The Arbitration Agreement is contained in an Appraisal Letter dated 11th July, 2018, signed on 23rd July, 2018. The said document is accompanied with annexures, which contain an arbitration agreement at clause No. 2, that reads as under:
"27. General
A. Arbitration Clause
In case of any dispute or difference arising between the parties hereto as regards interpretation or implementation of any the terms and conditions, the same shall be resolved through arbitration and such arbitration shall be governed by the Arbitration and Conciliation Act, 1956 and rules there under. The venue of the arbitration shall be only at Delhi and procedure of the Arbitration shall be as may be decided by the Arbitrators.
B. Governing Law; Consent to Personal Jurisdiction:
The laws of the State of Delhi will govern the Terms and Conditions of employment, and you hereby expressly consent to the personal jurisdiction of the High Court located therein for any lawsuit filed there by the Company arising from or relating to my assignment."
3. The existence of and the signatures on the afore-said document, are not in dispute.
4. However, Mr. Sanjoy Ghosh, learned Senior Counsel for the Respondent, strongly opposes the petition for appointment on several grounds which are urged as follows:
4.1. Respondent was appointed to his job position in the Company vide an Appointment Letter dated 30th January, 2012. The said document would govern the terms of appointment. It however does not contain an arbitration clause.
4.2. Respondent has raised an industrial dispute before the Conciliation Officer at Pushpa Bhavan, Labour Office, Government of NCT of Delhi, New Delhi against the Petitioner and its management for unfair labour practices against the Respondent. The Conciliation Officer has fixed the matter for 20th September, 2021.
4.3. In June, 2018, Ms. Akansha Shah and Mr. Rahul Sachdev, part of management of the Petitioner company, on instructions from Managing Director, called the Respondent for a meeting. During this meeting, the management asked the Respondent to sign voluminous documents and papers, which were blank. When Respondent refused to oblige, the Petitioner was told that the documents were for the purpose of providing salary increment and disbursing bonus to the Respondent. In these circumstances, he was intimidated to sign the documents by threatening false prosecution. The Appraisal Letter dated 11th July, 2018, signed relied upon by the Petitioner for seeking appointment of the Arbitrator, was thus signed under coercion and by force.
4.4. In March 2019, Respondent resigned from Petitioner's employment as Area Sales Manager. Thereafter the Respondent joined services of another organization as a Regional Sales Manager. Later, in December, 2020 he further switched and joined another organization. There is no competition between the Petitioner and the present Employer of the Respondent i.e., Monin India Private Limited which is the subsidiary of the Georges Monin SAS.
4.5. The Petitioner has deliberately and willfully concealed this fact, and for this reason, an application under Section 340 of the Code of Criminal Procedure, 1973, has been filed for the offence of perjury.
4.6. The Petitioner seeks to enforce negative covenant in the Appraisal Letter, which is not permissible. The Non-Compete Clause in the alleged Appraisal Letter dated 11th July, 2018, is in conflict with Section 27 of the Indian CONTRACT ACT , 1872 and was absent in the original Appointment Letter. This submission is supported by placing reliance upon Premier Automobiles Ltd. Vs. Kamlekar Shantaram Wadke of Bombay and Ors, AIR 1975 SC 2238, Vimal Kishor Shah Vs. Jayesh Dinesh Shah, (2016) 4 SCC OnLine SC 825 and Tarlok Chand and Ors. Vs
