Gujarat High Court
Judgename :D.N.Patel
VAN OORD ACZ INDIA PVT.LTD. - Appellant
Versus
GUAJRAT ADANI PORT PVT.LTD. - Respondent
SPECIAL CIVIL APPLICATION9657 of 2004
Decided On : 09/13/2004
Arbitration and Conciliation act, 1996 - Section 11 (6) - Writ petition has been preferred by petitioner against order passed by designate of Honble Chief Justice - An interesting question of law has been raised in present petition to effect that whether High court Article of Constitution of India can go into details of an agreement between parties and should decide existence or otherwise of a clause international commercial arbitration in agreement especially when existence of clause in agreement is disputed by respondent arbitrator has already been appointed by this Court - Petitioner is challenging an administrative order passed by Nominee of Honble chief Justice of this Court appointing third arbitrator of Arbitration and Conciliation act respondent moved petition for appointment of third Arbitrator - Designate of Honble Chief Justice of this Court - Upon hearing both parties an administrative order – Held, Judicial interpretation of Act a dispute as to existence of international Commercial arbitration can be raised before Arbitrator - As per said Act this Court extra ordinary jurisdiction conferred Article of Constitution of India should not decide as to whether petitioner Company Central Management and Control is exercised in any country other India or not - Holding shares payment of salary by persons who are residing out of country is not a sole criteria for deciding Central Management and Control of petitioner – Company - Neither there is any mathematical test in an existence any law that when most of directors if are residing out of India always Central Management and control can be said to have been exercised in country other India – In opinion to arrive at a decision as to Central management and Control of petitioner - Company whether is exercised in any country other India is disputed question of which requires evidence to be led and certain are required to be proved an exercise must be undertaken by Arbitrator - High Court in this case seems to have proceeded to adopt an adjudicatory role and returned a verdict recording reasons as to very existence or otherwise of agreement as tenability and legality or otherwise of making a reference to an Arbitrator - It was further observed in aforesaid judgment that it is not for ICA or Judge in high Court to undertake this impermissible adjudicatory task or adjudging highly contentious issues between parties – Petition dismissed (Para 15)
( 1 ) THE present writ petition has been preferred by the petitioner against the order passed by the Learned designate of the Honble Chief Justice of this High Court under Section 11 (6) of the Arbitration and Conciliation act, 1996 dated 6th July, 2004 in petition under arbitration Act No. 30 of 2003.
( 2 ) AN interesting question of law has been raised in the present petition to the effect that whether the High court under Article 226 of the Constitution of India can go into the details of an agreement between the parties and should decide the existence or otherwise of a clause "international commercial arbitration" in the agreement especially when [i] the existence of such clause in the agreement is disputed by the respondent; and [ii] an arbitrator has already been appointed, by this Court under Section 11 (6) of the Arbitration and Conciliation act, 1996 or instead of concluding by the High Court as to the existence or otherwise of a clause "international commercial arbitration" in the agreement, should it be left open, for the parties, to raise the said contention before the Arbitrators on the basis of facts, ( which may be settled upon the evidence to be taken before them ).
( 3 ) THE facts leading to the present case are as under :- the petitioner is challenging, an administrative order passed by the learned Nominee of the Honble the chief Justice of this Court appointing third arbitrator, under Section 11 (6) of the Arbitration and Conciliation act, 1996 (hereinafter be referred to as the "act, 1996" for the sake of bravity) The respondent moved the petition for the appointment of third Arbitrator under section 11 of the Act, 1996 before the Learned Designate of the Honble Chief Justice of this Court. Upon hearing both the parties, an administrative order has been passed dated 6th July, 2004 under Section 11 (6) of the said Act, 1996, whereby the Honble Mr. Justice G. T. Nanavati (retired Judge of the Honble Supreme Court of India) has been appointed as third Arbitrator. The agreement between the parties is having an Arbitration Clause, which reads as under :-"clause 20. 6 Arbitration : Unless settled amicably, any dispute in respect of which the DABs decision (if any) has not become final and binding shall be finally settled by international arbitration. Unless otherwise agreed by both the parties: (a) there shall be three arbitrators; (b) The language to be used in the arbitration shall be English; (c) The place of arbitration shall be Ahmedabad with jurisdiction restricted to the Gujarat High Court; (d) The arbitration shall be carried out in accordance with the laws of India. The arbitrator (s) shall have full power to open up, review and revise any certificate, determination, instruction, opinion or valuation of (or on behalf of) the Employer, and any decision of the DAB, relevant to the dispute. Neither Party shall be limited in the proceedings before the arbitrator (s) to the evidence or arguments previously put before the DAB to obtain its decision, or to the reasons for dissatisfaction given in its notice of dissatisfaction. Any decision of the DAB shall be admissible in evidence in the arbitration. Arbitration may be commenced prior to or after completion of the Works. The obligations of the parties and the DAB shall not be altered by reason of any arbitration being conducted during the progress of the Works. Any dispute in respect of which amicable settlement has not been reached within the period stated in sub-clause 20. 5 shall finally and conclusively be settled by arbitration in accordance with the Arbitration and Conciliation Act, 1996 and by other enactments or modification thereto which shall be deemed to be incorporated herein by reference to this sub clause. "
( 4 ) IT is contended by the learned advocate appearing for the petitioner that the petition preferred by the respondent under Section 11 (6) of the said Act, 1996, is not tenable at law and, therefore, the order passed by the L
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