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IN THE HIGH COURT OF DELHI
Vibhu Bakhru, J.
Foodworld - Appellant
Versus
Indian Railway Catering and Tourism Corporation Ltd. - Respondent
Arb.P. 658 of 2021
Decided On : 01-09-2021




The court's jurisdiction under Section 11(6) of the A&C Act is limited to determining the existence of an arbitration agreement, while issues of limitation and other contentious disputes are to be decided by the arbitrator.

Headnote:(A) Arbitration and Conciliation Act, 1996 - Section 11(6) - Petition for appointment of Sole Arbitrator - Dispute relates to reimbursement of meal tariff differences between regular and combo meals - Master License Agreement includes an arbitration clause - Court’s examination limited to the existence of the arbitration agreement - Claims argued to be barred by limitation - Court decides to appoint a Sole Arbitrator due to inability of parties to concur on the appointment. (Paras 18, 24, 28)

(B) Existing Dispute - Court confirms there is no disagreement on the existence of an arbitration agreement and the necessity for arbitration. (Paras 16, 28)

Facts of the case:
The appellant filed a petition under the A&C Act seeking appointment of an arbitrator after disagreements over meal service reimbursement claims. The parties’ contractual history dates back to a Master License Agreement executed in 2014 and subsequent licensing actions leading to disputes over the tariff rates.

Findings of Court:
The court ruled on the need for arbitration as the existence of the arbitration agreement was unchallenged, and the dispute on limitation was contentious, thus outside its jurisdiction at this stage.

Issues: Main issues pertained to whether the claims were barred by limitation and the validity of the arbitration agreement.

Ratio Decidendi: The court emphasized that under Section 11(6-A) of the A&C Act, its scope is limited to the existence of an arbitration agreement, reserving other matters, such as limitation, for the arbitrator.

Result: Petition allowed; Sole Arbitrator appointed.

Table of Content
1. background on catering service contract (Para 1 , 2 , 3 , 4 , 5 , 6)
2. disputes regarding meal tariff reimbursement (Para 7 , 8 , 10 , 11)
3. claims and limitations in arbitration context (Para 12 , 13 , 16 , 17)
4. court's limited examination of arbitration agreements (Para 18 , 19 , 21 , 22 , 23)
5. examination of disputes for arbitration (Para 24 , 25 , 26 , 27)
6. appointment of sole arbitrator (Para 28 , 29 , 30)

JUDGMENT

Vibhu Bakhru, J. (ORAL)--The petitioner has filed the present petition under Section 11 (6) of the Arbitration and Conciliation Act, 1996 (hereinafter the `A&C Act'), inter alia, praying that a Sole Arbitrator be appointed to adjudicate the disputes between the parties.

2. On 27.05.2013, Northern Railways had issued a Notice Inviting Tender (NIT) for Onboard Catering Services in Train no. 12263-64 (Hazarat Nizamuddin - Pune: Duronto Express). Subsequently, on 09.10.2013 and 23.10.2013, the Railway Board issued two circulars - CC no. 63/2013 and CC no. 67/2013. In terms of Circular no. 63/2013, the Railway Board revised the menu and catering service. In terms of Circular no. 67/2013, the Railway Board directed provision of Regular Meals in place of Combo Meals.

3. The petitioner submitted its bid and, on 13.12.2013, it was awarded the license to provide Onboard Catering Services for the train in question (Train no. 12263-64, Hazarat Nizamuddin - Pune: Duronto Express).

4. Thereafter, on 27.03.2014, a Master License Agreement was executed between the petitioner and Northern Railways. It is averred in the petition that the same contained a Menu, as introduced by Circular no. 63 of 2013 and as partially modified by Circular No. 67 of 2013.

5. The petitioner states that on 06.08.2014, the Railway Board issued another circular (Circular no. 32/2014) in terms of which the petitioner was required to serve a Welcome Drink without reimbursement of any costs. This is the subject matter of some controversy and the petitioner claims that it approached the Indian Railway Mobile Caterers Association for making a representation to the concerned authority. It claims that such a representation was made in the month of June 2015.

6. In terms of the Catering Policy 2017, the respondent took over the services in respect of the train in question from Northern Railways, with effect from 1st May, 2017. To implement the same, a tripartite agreement dated 01.05.2017 was entered into between the petitioner, the Northern Railways and the respondent.

7. The petitioner claims that its grievances regarding the said charges persisted and, on 07.06.2019, a meeting was convened between the various licensees and the concerned authorities of the respondent.

8. It is averred that by a letter dated 23.09.2019, the respondent informed the petitioner that it was eligible for renewal of license but the same was subject to it accepting the unbundling of services.

9. On 03.10.2019, the Railway Board took a decision that the licensees shall be reimbursed at the rate of regular meal tariff instead of at the tariff of a combo meal. According to the petitioner, this was pursuant to the representations made by the Licensees, including the petitioner, for resolution of the pending issues.

10. The dispute, essentially, relates to the petitioner's claim for reimbursement of the difference in tariff of a `regular meal' and a `combo meal' in terms of the said decision. According to the respondent, the said decision is applicable prospectively and therefore, the petitioner's claim for a difference in the tariff for a regular meal and a combo meal for a period prior to 03.10.2019, is unsustainable.

11. The petitioner disputes the same and contends that the said decision settled a long standing dispute and therefore, it is entitled to differences in tariffs even in respect of services rendered prior to 03.10.2019. In addition, the petitioner claims that there are other disputes between the parties as well, including in respe

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