IN THE HIGH COURT OF KERALA
K.T. SANKARAN, J.
Jolly Thomas - Appellant
Versus
Kottayam Cable Channel Distributor Pvt. Co. - Respondent
C.R.P. No. 876 of 2008 in I.A. No. 966 of 2008 in OS 169 of 2008
Decided On : 29-10-2014
Arbitration and Conciliation Act 1996 - Sections 7 (4) and (5) and 8 - Civil Procedure Code, 1908 - Section 89 - Arbitration agreement - Contract - Settlement of disputes outside the court - Whether it is necessary Arbitration agreement should be in a particular form - Whether there is a valid arbitration agreement between parties, court is expected to construe terms of agreement - Held, No particular form or wording is required to constitute valid arbitration agreement - There is mandatory requirement that arbitration agreement shall be in writing - Writing could be in any of documents mentioned in Section 7 (4 and (5) of Act, 1996 - When different clauses are irreconcilable with each other or where different clauses in agreement convey different meanings or where different clauses are mutually destructive - Duty of court to ascertain intention of parties by interpreting the various clauses in agreement in accordance with well settled principles of interpretation of contracts
K.T. Sankaran, J.
1. The question involved in this Revision is whether in view of Clauses 24 and 25 of the agreement entered into between the parties the disputes are to be settled by Arbitration under the Arbitration and Conciliation Act or whether the civil court will have jurisdiction to decide the disputes. The court below held that the civil court will have jurisdiction and the parties need not be referred to Arbitration invoking Section 8 of the Arbitration and Conciliation Act, 1996, rejecting the contentions put forward by the defendant. The defendant challenges in this Revision the order passed by the court below.
2. Kottayam Cable Distributor Pvt. Ltd. filed O.S. No.169 of 2008 on the file of the court of the Munsiff of Erattupetta against the revision petitioner (Jolly Thomas) for a permanent prohibitory injunction restraining the defendant from transferring the cable net work contrary to the terms of the agreement entered into between the parties and restraining the defendant from obstructing telecast of the signals of the plaintiff's company. Other ancillary reliefs for injunction were also claimed in the plaint.
3. The defendant entered appearance and filed an application under Section 8 of the Arbitration and Conciliation Act to refer the parties to arbitration. The defendant contended that as per Clause 24 of the agreement entered into between the parties, the disputes between them shall be referred to arbitration.
4. The plaintiff contended that there is no arbitration clause in the agreement and the parties are governed by Clause 25 of the agreement whereby the disputes are to be resolved through the civil court.
5. For the sake of convenience, it is apposite to extract paragraphs 24 and 25 in the agreement executed between the parties.
"24. The original of this agreement must keep in the custody of the First Part and the copy under the custody of Second Part. Any dispute between the First and Second must solve through the arbitrator.
25. If the dispute is not settled between the parties they must went into the court for the solution of the disputes. The jurisdiction of the every legal proceedings arising out of this agreement must be in the Judicial Munsiff Court, Pala which is the jurisdiction of the first part. It is not affected the 3rd conditions of this agreement, the right of the First Part or Distributor to disconnect the supply of the signals to the Second Part."
6. The court below held that there is no valid agreement for arbitration between the plaintiff and the defendant as per the agreement dated 01/08/2007. It was also held that the real intention of the parties was not to settle the disputes between them by referring to arbitration.
7. Sri. M. Narendra Kumar, learned counsel appearing for the petitioner submitted that on a plain reading of Clause 24 of the agreement, it is clear that the parties intended to resolve the dispute by appointing an arbitrator. Clause 25 of the agreement has no meaning at all. If Clause 24 is resorted to, Clause 25 should be ignored. He relied on the decisions of the Supreme Court in (2005) 8 SCC 618 M/s. S.B.P. and Co. v. M/s. Patel Engineering Ltd. and Anr., 1996 (2) SCC 216 State of Orissa and another v. Damodar Das, 2007 (5) SCC 719 Jagdish Chander v. Ramesh Chander and Others, 2000 (4) SCC 272 Wellington Associates Ltd. v. Kirit Mehta, AIR 2008 Karnataka 127 Y.L.e Services Pvt. Ltd. v. Silverline Business & Tech Park Pvt. Ltd. and others, 2009 (2) SCC 55 Visa International Ltd. v. Continental Resources (USA) Ltd., 2009(5) SCC 313 Bank of India and another v. K.Mohandas & others and also certain passages in Chitty on Contract and Russel on Arbitration.
8. Smt. Sheeja. P.A., the learned counsel for the respondent submitted that the different clauses in the agreement are to be read together and a harmonious construction is to be made. It is submitted that parties cannot be said to be unaware that when a matter is referred to arbitration, it should reach the finality a
Bank of India and another v. K. Mohandas and others
Jagdish Chander v. Ramesh Chander and Others
M/s. S.B.P. and Co. v. M/s. Patel Engineering Ltd. and Anr.
SBP and Company v. Patel Engineering Ltd. and another
State of Orissa and another v. Damodar Das
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