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2018 Supreme(Raj) 596
IN THE HIGH COURT OF RAJASTHAN, JAIPUR BENCH
MOHAMMAD RAFIQ, J.
V. Krishnamurthy - Appellant
Vs.
Airport Director Jaipur Airport - Respondent
Civil Miscellaneous Application No. 409 of 2017 and Civil Arbitration Application No. 56 of 2016
Decided On : 08-03-2018
Ravi Bhojak, Sudhanshu Kasliwal, Sukriti Kasliwal
A party cannot be permitted to approbate or reprobate. Once an award is passed by an arbitrator and attains finality, the same issue cannot be permitted to be adjudicated by any party by way of any second round of arbitration proceedings, the arbitration agreement having seized to exist.
Headnote:
ARBITRATION - APPOINTMENT OF SOLE ARBITRATOR - REVIEW OF ORDER - JURISDICTION OF ARBITRATOR - APPLICABILITY OF ESCALATION CLAUSE - EXTENSION OF CONTRACT - UNILATERAL INCREASE IN LICENSE FEE - DISPUTE ALREADY SETTLED BY ARBITRATOR - AWARD ATTAINING FINALITY - ESTOPPEL - SECTION 11 OF THE ARBITRATION AND CONCILIATION ACT, 1996.
Fact of the Case:
The original applicant, Mr. V. Krishnamurthy, filed an application under Section 11 of the Arbitration and Conciliation Act, 1996, seeking the appointment of a sole arbitrator to adjudicate disputes with the Airport Authority of India (AAI). The disputes related to the unilateral increase in license fee by AAI upon extension of the contract and the applicability of the escalation clause after the expiry of the original contract period.
Finding of the Court:
The court found that the dispute raised by the original applicant had already been settled by the sole arbitrator in two earlier awards dated 04.07.2014 and 13.08.2015. The court held that the original applicant was estopped from questioning the correctness of the findings recorded in the awards as he had not filed any objection under Section 34 of the Act.
Issues: 1. Whether the dispute raised by the original applicant was a "Live Dispute" or not. 2. Whether the sole arbitrator had the jurisdiction to decide the dispute related to the unilateral increase in license fee and the applicability of the escalation clause after the expiry of the original contract period. 3. Whether the original applicant was estopped from questioning the correctness of the findings recorded in the earlier awards.
Ratio Decidendi: 1. The court held that the dispute raised by the original applicant was not a "Live Dispute" as it had already been settled by the sole arbitrator in two earlier awards. 2. The court held that the sole arbitrator did not have the jurisdiction to decide the dispute related to the unilateral increase in license fee and the applicability of the escalation clause after the expiry of the original contract period, as the dispute had already been settled by the earlier awards. 3. The court held that the original applicant was estopped from questioning the correctness of the findings recorded in the earlier awards as he had not filed any objection under Section 34 of the Act.
Final Decision: The court allowed the application filed by the AAI for review and recall of the order dated 8.9.2017, which had appointed a sole arbitrator to adjudicate the dispute. The court held that the dispute had already been settled by the earlier awards and that the original applicant was estopped from questioning the correctness of the findings recorded in those awards.
Mohammad Rafiq, J.
This misc. application has been filed by Director, Jaipur Airport, Airport Authority of India, Jaipur (for short-'AAI') inter alia with the prayer for recall/review of the order of this Court dated 8.9.2017.
2. This Court by the aforesaid order allowed the application filed by the original applicant-Mr. V. Krishnamurthy under Section 11 of the Arbitration and Conciliation Act, 1996 praying for appointment of a sole arbitrator for adjudication of his disputes with the AAI. The Court while allowing the application came to the conclusion that the disputed involved in the said application was "whether the respondents could have, having extended the license period in favour of the petitioner from time to time in different phases up to 03.06.2014, unilaterally increased the license fee and if so, at what rates." and whether the original applicant has paid excess amount of Rs. 19, 59, 377 upto February and March, 2016. The argument on behalf of AAI resisting the application was that the outstanding amount demanded in terms of the modified award dated 04.07.2014 as well as dated 13.08.2015 was Rs.3,97,89,439/-. It was denied that any excess payment was made by the original applicant to the AAI and that the AAI vide letter dated 12.10.2015 called upon the original applicant to deposit the outstanding dues amounting to Rs.1, 44, 00, 608/-, which was calculated in terms of the modified award dated 04.07.2014 as well as the award dated 13.08.2015. The total amount computed on that basis was Rs.3, 97, 89, 439/-. This Court has held that so far as earlier disputes between the parties are concerned, they have already been crystallized in the award passed earlier on 17.11.2011 and the present dispute falls outside their scope.
3. Shri Sudhanshu Kasliwal, learned senior counsel appearing for the AAI submits that this Court has failed to appreciate that by appointing a sole arbitrator to adjudicate the dispute related to license fee payable, this court has in effect appointed sole arbitrator to adjudicate a dispute which has already been settled by a sole arbitrator vide his awards dated 04.07.2014 and 13.08.2015. Once the award earlier passed attained finality, the same issue cannot be permitted to be adjudicated by any party by way of any second round of arbitration proceedings, the arbitration agreement having seized to exist. It is argued that the appointment made ignoring objection raised that there was no dispute to be referred to arbitrator in view of full and final settlement between the parties is unsustainable. The original application had raised the second dispute related to applicability of Escalation Clause of 10% every year stipulated in the license agreement, which issue has already been decided by the sole arbitrator vide its order dated 13.08.2015.
4. Learned senior counsel referred to para 21 (ii) of the said award dated 13.08.2015 to argue that therein it is stipulated that AAI may levy 10% escalation in license fee from 01.05.2010 i.e., from 1st May 2010, the license fee to be charged from the Contractor, which would be Rs. 28,31,400/- per month. The date for the next 10% increase (escalation) in the license fee would be 1st May 2011. The license Fee for the subsequent year would be increased by 10% effective from 1st May of that year till the duration of the agreement between the parties. It is argued that the original applicant disputed the very applicability of the terms and conditions of the original contract to the period of license agreement dated 25.10.2007 extended from time to time by the respondent authority, also disputed the applicability of the escalation clause after December 2012, therefore he cannot by relying on the arbitration clause contained in the same agreement seek reference to the Arbitrator afresh. A party cannot be permitted to approbate or reprobate.
5. Shri Sudhanshu Kasliwal, learned senior counsel has submitted that the original applicant has tried to mislead th
