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2018 Supreme(Gau) 1695
IN THE HIGH COURT OF GAUHATI
UJJAL BHUYAN, J.
Turbo Power and Another – Petitioners
Versus
Prag Electricals (P) Ltd. and Another – Respondents
Arb. Pet. No. 25 of 2017
Decided On : 28-09-2018
Advocate Appeared:
For the Petitioner: Mr. H. Buragohain.
For the Respondent: Ms. P. Sarmah.
Headnote:
Arbitration and Conciliation Act, 1996 – Sections 11, 12 – Code of Civil Procedure, 1908 – Section 89 – Tender – Process – It is stated that petitioner firm and respondent No. 1 had entered into a joint venture in the year 2005 to undertake electrical construction works with Assam State Electricity Board (ASEB). – Between 2005 and 2012, both petitioner firm and respondent No. 1 jointly participated in the tender processes floated by ASEB as a joint venture. – In this connection, agreement was entered into between the two parties – As per this agreement, bills would be raised in the name of respondent No. 1 who was treated as the lead partner of the joint venture. – This agreement contained a clause for settlement of dispute. It was provided that if any such dispute arose, an endeavour would be made firstly to resolve the same amicably but if amicable settlement was not possible, then through arbitration by appointment of arbitrator – Held, It is trite that in a proceeding under section 11(6) of the Arbitration and Conciliation Act, 1996, court is not required to go into the merits or de-merits of the rival claims. – Court is only required to see whether there is an arbitration clause in the agreement and whether the claim made is an arbitrable one. – In so far the present case is concerned, it is evident that clause 11 of the joint venture agreement provides for settlement of disputes through arbitration. – Secondly, the claim made by the petitioners prima facie appear to be arbitrable in nature. – It is the specific case of the petitioners that the claim relatable to the arbitration petition is separate and distinct from the claim made in Money Suit – Of course, this is a matter which the arbitrator would be competent to decide. – Otherwise also, even if the subject-matter is interlinked or there is overlapping, section 89 of the Code of Civil Procedure, 1908 provides for settlement of disputes outside the court. – It is the duty of the court trying a suit to strive for settlement of disputes through alternative dispute resolution mechanism as provided therein where arbitration is the main mode of dispute resolution – Court is of the considered opinion that the claim made by the petitioners is an arbitrable one, which may be referred to arbitration – Petition Disposed of.
ORDER :
1. Heard Mr. H. Buragohain, learned counsel for the petitioners and Mr. B. Chakraborty, learned counsel for the respondents.
2. This is an application under section 11 of the Arbitration and Conciliation Act, 1996 for appointment of Arbitrator.
3. Petitioner No. 1 is a proprietorship firm of which petitioner No. 2 is the proprietor (petitioner firm).
4. It is stated that petitioner firm and respondent No. 1 had entered into a joint venture in the year 2005 to undertake electrical construction works with Assam State Electricity Board (ASEB). Between 2005 and 2012, both petitioner firm and respondent No. 1 jointly participated in the tender processes floated by ASEB as a joint venture. In this connection, agreement was entered into between the two parties on 4.2.2006. As per this agreement, bills would be raised in the name of respondent No. 1 who was treated as the lead partner of the joint venture. This agreement contained a clause for settlement of dispute. It was provided that if any such dispute arose, an endeavour would be made firstly to resolve the same amicably but if amicable settlement was not possible, then through arbitration by appointment of arbitrator (clause 11).
5. Petitioners have stated that as a joint venture they were awarded several projects, details of which have been mentioned in paragraph 5.
6. Amongst other works, the joint venture was awarded the work of design, manufacture, testing at works, supply, transportation, delivery of equipment at site, storage at sight, testing and commissioning equipment and material for 220 KV Switch Yard and Power House of Karbi Langpi Hydro-Electric Project pursuant to Letter of Intent dated 8.2.2006, following NIT bearing No. ASEB/CE(G)/KLHEP/EM/3/2005. The Letter of Intent was accepted by the joint venture on 3.3.2006 whereafter, agreement was entered into between ASEB and respondent No. 1, being the lead partner of the joint venture, on 21.3.2006.
7. On 23.5.2014, petitioners wrote to respondents that though ad hoc payments were made, there was no final settlement of the earnings from out of the joint venture. As a matter of fact, petitioners wrote to the Chairman of Assam Power Distribution Company Ltd. (APDCL), a successor company of ASEB requesting stoppage of payment to respondents for failure to honour joint venture commitments.
8. Ultimately, Sri Rupam Kathkotia, advocate for the petitioners issued notice to the respondents on 28.12.2016 stating that the allotted work of Karbi Langpi Hydro Electric Project was completed in the year 2013 for which payments were made by ASEB to respondents on behalf of the joint venture. However, no final settlement was made and consequently, final share of profit was not paid to the petitioners. Invoking the Arbitration Clause, i.e. clause 11, it was mentioned that Shri Rohini Kumar Das, CA was appointed as sole arbitrator to arbitrate on the claim of the petitioners.
9. Respondents replied to the arbitration notice on 19.1.2017 disputing the claim and also contending that notice for appointment of arbitrator through counsel is not maintainable in law.
10. Hence, the arbitration petition.
11. By order dated 3.11.2017, this court had issued notice.
12. Upon notice, respondents have entered appearance and filed affidavit. Stand taken in the affidavit is that present petition is not maintainable as there is no subsisting claim capable of being arbitrated upon. On the same subject, petitioners have filed Money Suit No. 267/2016 before the Court of Civil Judge No. 1, Kamrup (Metro) at Guwahati. Petitioners cannot pursue two remedies simultaneously.
13. In their reply affidavit, petitioners have contended that subject-matter of Money Suit No. 267/2016 is not related to the claim covered by the present application. It pertains to some other contract. A perusal of the plaint in Money Suit No. 267/2016 will reveal that the subject-matter of the said suit is totally different from the subject-matter of the present petition.
14. An additional af
