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IN THE HIGH COURT OF DELHI
Sanjeev Narula, J.
ISGEC Heavy Engineering Ltd. - Appellant
Versus
Indian Oil Corporation Limited - Respondent
Arb.P. 164 of 2021
Decided On : 21-10-2021
| Table of Content |
|---|
| 1. intent and details of arbitration clause. (Para 1 , 2) |
| 2. disputes arising during the contract's execution. (Para 3 , 4) |
| 3. objections from iocl regarding jurisdiction. (Para 5) |
| 4. petitioner's arguments regarding jurisdiction. (Para 6) |
| 5. interpretation of 'venue' versus 'seat' in arbitration. (Para 7 , 8 , 12) |
| 6. supreme court rulings clarifying jurisdiction. (Para 9 , 10) |
| 7. parties' intention regarding arbitration venue. (Para 11 , 14) |
| 8. exclusive jurisdiction at guwahati. (Para 13) |
| 9. court's dismissal based on jurisdiction. (Para 15 , 16) |
JUDGMENT
[VIA VIDEO CONFERENCING]
Sanjeev Narula, J. The present petition under Section 11 (4) and (6) of the Arbitration and Conciliation Act, 1996 [hereinafter, `the Act'] seeks appointment of an Arbitrator in terms of Clause 9.0.0.0 of the General Conditions of Contract [hereinafter, `GCC'], incorporated by way of reference under a Letter of Award dated 22nd September, 2016 [hereinafter, `LoA'], whereunder, a Work Order1 was issued to the Petitioner for carrying out the works of "Residual Process Design, Engineering, Detailed Engineering (including HAZOP Study), Procurement, Supply, Fabrication, Inspection, Transportation, Storage, Construction, Installation, Testing, Pre-Commissioning, Commissioning, Performance Guarantee Test Run, Operation and Maintenance of 80 TPA (NET) Petcoke Fired CFBC Boiler at Guwahati Refinery" of the Respondent.
2. The arbitration clause contained in the GCC, reads as under:
"9.0.0.0 ARBITRATION
9.1.0.0 Subject to the provisions of Clauses 6.7.1.0, 6.7.2.0 and 9.1.1.0 hereof, any dispute arising out of a Notified Claim of the CONTRACTOR included in the Final Bill of the CONTRACTOR in accordance with the provisions of Clause 6.6.3.0 hereof, if the CONTRACTOR has not opted for the Alternative Dispute Resolution Machinery referred to in Clause 9.2.0.0 in respect thereof, and any dispute arising out of an amount claimed by the OWNER against the CONTRACTOR shall be referred to the arbitration by an Arbitral Tribunal comprised of 3 (three) arbitrators selected in accordance with the provisions of the Arbitration & Conciliation Act, 1996. It is specifically agreed that the OWNER may prefer its Claim(s) against the CONTRACTOR as counter claim(s). The CONTRACTOR shall not, however, be entitled to raise as a set-off defence or counter-claim any claim which is not a Notified Claim included In the CONTRACTOR's Final Bill in accordance with the provisions of Clause 6.6.3.0 hereof.
9.1.1.0 The provisions of the Indian Arbitration & Conciliation Act, 1996 and any re-enactment(s) and/or modification(s) thereof and of the Rules framed thereunder shall apply to arbitration proceedings pursuant hereto subject to the following conditions:
(a) The Arbitrator shall give his Award separately in respect of each Claim and Counter-Claim; and
(b) The Arbitrator shall take into account any decision, opinion or determination howsoever expressed which is stated to be final and binding to the CONTRACTOR in terms of the contract documents in Judging any issue or dispute.
9.1.2.0 The venue of the arbitration shall be New Delhi, provided that the Arbitrators may with the consent of the OWNER and the CONTRACTOR agree upon any other venue."
3. Pursuant to the LoA, a `Formal Agreement for Work' dated 26th September, 2016 was executed at Guwahati [hereinafter, `Contract'].
DISPUTES
4. During the pendency of the Contract, the Respondent - i.e., Indian Oil Corporation Ltd. [hereinafter, `IOCL'] issued a suspension order dated 06th August, 2018,2 which lead to Petitioner - i.e., ISGEC Heavy Electrical Ltd. [hereinafter, `ISGEC'] exercising its right to terminate the Contract vide letter dated 24th December, 2019. Later, ISGEC invoked arbitration on 23rd October 2020, and nominated its Arbitrator. IOCL replied vide letter dated 23rd November 2020, contending that the invocation was unsustainable and premature. In these circumstances, ISGEC has filed the present petition.
CONTEN
The designation of 'venue' in an arbitration clause does not imply the 'seat' of arbitration, which must be expressly specified; exclusive jurisdiction remains with civil courts at the location defin....
Point of law : Seat of Arbitration - What constitutes the ‘seat’ of arbitral proceedings - the intention of the parties is germane and that can be gathered from Contract.
Arbitration clause specifying venue at place or neutral country with exclusive jurisdiction elsewhere constitutes contrary indicia; not seat. Post-amendment, High Court jurisdiction for international....
Point of law: Where any disputes arise between parties in respect of or in connection with the agreement then parties shall first endeavour to conciliate the disputes failing which the same shall be ....
The main legal point established in the judgment is the significance of the seat of arbitration in conferring jurisdiction on Courts in arbitration proceedings.
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