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2019 Supreme(Guj) 595
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
J.B. PARDIWALA, V.B. MAYANI, JJ.
Inox Renewables Limited - Appellant
Versus
Jayesh Electricals Ltd. - Respondent
R/Special Civil Application No. 9536 of 2019
Decided On : 09-10-2019
Subject
JURISDICTION - TERRITORIAL JURISDICTION
Act Referred
ARBITRATION AND CONCILIATION ACT : S.34, S.11, S.20(3), S.20
CIVIL PROCEDURE CODE : S.16, S.17, S.18, S.19, S.20, S.21, S.15
COMMERCIAL COURTS, COMMERCIAL DIVISION AND COMMERCIAL APPELLATE DIVISION OF HIGH COURTS ACT : S.10(3)
CONSTITUTION OF INDIA : Art.227, Art.136
CONTRACT ACT : S.28, S.23
Headnote
Companies Act, 1956 - Arbitration and Conciliation Act, 1996 - Section 34 - Constitution of India,1950 -Article 227 - Petitioner calls in question legality and validity of order passed by Commercial Court - Petitioner is a company registered provisions of the Companies Act - Company is engaged in business of manufacturing and marketing of transformers and allied products. M/s. Gujarat Fluor chemicals Limited placed a purchase order - Petitioner company for manufacturing, assembling, stage/final testing, inspection and supply of Power Transformers and Type Transformers for its proposed wind farm - Arbitration shall be conducted by three arbitrators one each to be nominated by you and owner second-third to be appointed as an umpire by both arbitrators in accordance to Arbitration and Conciliation Act of India - In case either party fails to appoint its arbitrator within sixty days after receipt of notice from other party invoking arbitration clause arbitrator appointed by party invoking arbitration clause shall become sole arbitrator to conduct arbitration – Held, Court would have jurisdiction in matter contract was performed at Patna - On other hand neither parties nor Arbitral Tribunal took upon itself burden of fixing seat of arbitration and attribute in terms of judgment in Indus Mobile Distribution Private Limited could not be used to suggest that this Court had jurisdiction to entertain captioned petition - Judgment of Supreme Court in Limited which was considered in Hardy Exploration and Productions case also establishes this principle clause in issue referred to London as venue - Supreme Court was thus called upon to determine as to whether venue in that case could be equated with seat of arbitration - Court after having regard to indicators embedded in contract including parties had agreed that applicability of provisions of Act to the arbitration proceedings, came to conclusion that seat of arbitration would be in India and not where the venue was London - In particular in context of instant case observations made in being apposite are extracted – Petition rejected (Paras 13 and 20)
For the Appellant : Kamlesh P. Vaidankar and Nilopher K. Vaidankar
For the Respondent: Tushar N. Vyas and Nidhi T. Vyas
JUDGMENT :
J.B. Pardiwala, J.
1. By this application under Article 227 of the Constitution of India, the petitioner calls in question the legality and validity of the order passed by the Commercial Court, Ahmedabad, dated 25th April 2019 in the Commercial Civil Misc. Application No. 83 of 2018 instituted by the petitioner herein under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as, 'the Act, 1996').
2. The facts giving rise to this petition may be summarised as under:
3. The petitioner is a company registered under the provisions of the Companies Act, 1956. The company is engaged in the business of manufacturing and marketing of transformers and allied products. M/s. Gujarat Fluorochemicals Limited placed a purchase order dated 28th January 2012 with the petitioner company for manufacturing, assembling, stage/final testing, inspection and supply of 2300 KVA Power Transformers and 60 KVA Dry Type Transformers for its proposed 200 MV wind farm at Dangri, Pokhran, District Jaisalmer, Rajasthan.
4. The purchase order document is at page-29 of the paper-book annexed as Annexure-C to this petition. Clause 8.5 of the purchase order is with regard to arbitration. It reads thus:
"All the disputes and differences if any shall be settled by arbitration in the manner herein after provided.
Arbitration shall be conducted by three arbitrators; one each to be nominated by you and the owner; second-third to be appointed as an umpire by both the arbitrators in accordance to the Arbitration and Conciliation Act of India, 1996. In case either party fails to appoint its arbitrator within sixty days after receipt of notice from the other party invoking the arbitration clause, the arbitrator appointed by the party invoking the arbitration clause shall become the sole arbitrator to conduct the arbitration.
Arbitrator appointed by the party invoking the arbitration clause shall become the sole arbitrator to conduct the arbitration.
The arbitration shall be conducted in accordance with the provisions of Indian Arbitration and Conciliation Act, 1996 or any statutory modifications thereof.
The venue of the arbitration shall be Jaipur.
The decisions of the majority of the arbitrators shall be final and binding on both the parties. The arbitrators may from time to time with the consent of all the parties extend the time for making the award. In the event of any of the arbitrators dying, neglecting, resigning or being unable to act for any reasons; it shall be lawfully binding for the party concerned to nominate another arbitrator in place of the outgoing arbitrator.
The arbitrator shall have full powers to review and/or revise any decision, opinion, direction, certification or valuation in accordance with the agreement and neither party shall be limited in proceedings before such arbitrators to the evidence for arguments for the purpose of obtaining the said decisions.
During settlement of disputes and arbitration proceedings, both parties shall be obliged to carry out their respective obligations under the agreement.
In the event of arbitrators, award being not acceptable to either party, the party shall be free to seek lawful remedies under the laws of India, and the jurisdiction for the same shall be courts in the state of Rajasthan."
5. It appears that disputes arose between the parties. In such circumstances, the respondent herein preferred an application under Section 11 of the Act, 1996, being Arbitration Petition No. 3 of 2014 before this Court for appointment of the arbitrator. A learned Single Judge of this Court, vide order dated 5th September 2014, appointed Hon'ble Mr. Justice C.K. Buch (retired Judge of this Court) to act as the sole arbitrator to resolve the disputes between the parties arising out of the contract dated 28th January 2012. The order dated 5th September 2014 reads thus:
"Learned advocate for the parties jointly submitted that matter be referred for arbitration of sole arbitrator. I request Shri C.K. B
