Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2021 Supreme(Guj) 267

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
Bela M. Trivedi, J.
RSPL Limited Through Shri Harish Ramchandani Assistant IVE President – Petitioner
Versus
Simplex Infrastructure Ltd – Respondent
R/Petn. Under Arbitration Act No. 51 of 2020
Decided On : 07-05-2021

Advocates:
Advocate Appeared:
For the Petitioner:Mr Kamal Trivedi, Senior Advocate For Mr Abhishek M Mehta
For the Respondent:Mr Ritin Rai, Senior Advocate With Mr Samrat Sengupta For P M Buch

Point of Law: Where an Arbitrator had already been appointed and intimation thereof had been conveyed to the other party, a separate application for appointment of an Arbitrator is not maintainable. Once the power has been exercised under the Arbitration Agreement, there is no power left to, once again, refer the same disputes to arbitration under Section 11 of the 1996 Act, unless the order closing the proceedings is subsequently set aside.

Headnote:
GCC - Articles 20, 9 and 1.2(iv) - Arbitration and Conciliation Act - Sections 11(6), 7(4) , 21 , 7(3) and 12(1)(b) - Consent for mediation - Contractual agreement - Contract - Notice - Whether the appointment of the Sole Arbitrator made by the PHD Chamber of Commerce and Industry - Whether the Clause-9 of the Form of Agreement had stood amended by virtue of the letters - Whether the power can be exercised by this Court under Section 11 of the Act when the appointment of an arbitrator has already been made by the respondent - Whether the appellant should be left to raise challenge at an appropriate stage in terms of remedies available in law - Your Lordships may be pleased to appoint Arbitrator on behalf of the respondent an petitioner to resolve the dispute between the parties arising out of the contractual agreement including work order read with other connected documents including Form of Agreement - General Conditions of Contract (GCC) and to the Special Conditions of the Contract (SCC) and also to the letters addressed by the respondent to the petitioner, it has been submitted that the respondent wanted to have the arbitration clause contained in Article 20 of GCC to prevail and hold the field for conducting the arbitration in case any disputes between the parties arose, in accordance with the provisions of the Act.
Finding of the Court : Court has no hesitation in exercising the powers conferred under Section 11(6) of the said Act for appointment of an Arbitrator to resolve the disputes between the parties. The Court therefore in exercise of the powers conferred under Sub-Section (6) of Section 11, appoints Mr. Justice Kalpesh Jhaveri, Former Judge of High Court of Gujarat and Former Chief Justice of the Orissa High Court, to act as an Arbitrator to resolve the disputes between the parties. The learned Advocate Mr. Abhishekh Mehta for the petitioner is directed to obtain the requisite consent and declaration of Mr. Justice Jhaveri as required in terms of Sixth Schedule, under Section 11(8) read with Section 12(1)(b) of the Arbitration and Conciliation Act, 1996 as amended by the Arbitration and Conciliation.
Result : Petition stands allowed

JUDGMENT :

1. The moot question that falls for consideration before this Court is :

Whether the appointment of the Sole Arbitrator made by the PHD Chamber of Commerce and Industry, (PHDCCI) in the unilateral proceedings initiated by the respondent is exfacie invalid and nonest so as to warrant interference by this Court, requiring an appointment of a Sole Arbitrator under the provisions contained in Section 11(6) of the Arbitration and Conciliation Act?

2. The factual conspectus as emerging from the pleadings of the parties is as under:

Serial No.	Date	Event
1.	02.02.2016	A letter of intent was issued by the petitioner to the respondent. The LoI specified that it would be followed by a Contract Agreement specifying the detailed terms and conditions of the contract.
2.	25.04.2016	A work order was issued by the petitioner to the respondent. The work order specified that it was accompanied by a service agreement dated 25.04.2016. It contained terms and conditions as to payment, delivery, initial security deposit, retention money deposit, and liquidated damages. It further provided that all other conditions shall be as per the Service Agreement.
3.	25.04.2016	A Form of Agreement was entered into between the Petitioner and the Respondent. The relevant clauses thereof are as under:
		a. Clause 1.1 of the From of Agreement listed the Contract Documents. These included the Form of Agreement, the General Condition of Contract (“GCC”), bulletins issued prior to the execution of the Form of Agreement, other documents listed in the Form of Agreement and modifications issued after the execution of the Form of Agreement.
		b. Clause 1.3 provided that in case of conflict between the Contract Documents, the Form of Agreement shall have priority.
		c. Clause 9 provided that any disputes shall be referred to arbitration by a sole Arbitrator appointed by PHDCCI and that the place of arbitration shall be Ahmedabad.
4.	25.04.2016	The GCC between the petitioner and the respondent were entered into. The following terms are noteworthy:
		a. Cl. 1.2(iv)The terms of the Contract can only be varied in writing by the authorized representatives of the parties.
		b. Cl. 2.4(iv)The Contract consists of the Form of Agreement
		c. Clause 20Any disputes between the parties are to first be resolved through friendly consultations. If the disputes are not resolved within 90 days of commencement of discussions by notice from one party to other
5.	25.04.2016	The SCC between the petitioner and the respondent were entered into. The following terms are noteworthy:
		a. Cl. 1.3.7 in case of irreconcilable conflict in non-technical matters between provisions in separate contract documents on the same aspect, precedence to be given to the documents in the following order:
		i. Formal contract
		ii. Prebid meeting confirmations
		iii. Price Schedule
		iv. Agreed variations
		v. SCC
		vi. GCC Clause 1.3.7 further provided that any variation or amendment issued after the execution of the formal contract shall take precedence over the formal contract and all other Contract Documents.
6.	24.05.2016	The respondent proposed an amendment to Clause 9 of the Form of Agreement to bring it in line with Clause 20 of the GCC. It stated that “Article09 may be modified accordingly for our acceptance”.
7.	26.05.2016	The respondent issued a letter to the petitioner stating, “As conveyed by you over telephone that the Arbitration Clause (Indian, Arbitration and Conciliation Act, 1996) will be followed as per the GCC and in anticipation that the same will be incorporated suitably from your end, we are forwarding all the documents duly signed for your record”.
8.	31.

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2021 Supreme(Guj) 267

IN THE HIGH COURT OF GUJARAT AT AHMEDABADBela M. Trivedi, J.RSPL Limited Through Shri Harish Ramchandani Assistant IVE President – PetitionerVersusSimplex Infrastructure Ltd – RespondentR/Petn. Under Arbitration Act No. 51 of 2020Decided On : 07-05-2021

Cases Referred (7)

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
Bela M. Trivedi, J.
RSPL Limited Through Shri Harish Ramchandani Assistant IVE President – Petitioner
Versus
Simplex Infrastructure Ltd – Respondent
R/Petn. Under Arbitration Act No. 51 of 2020
Decided On : 07-05-2021