IN THE HIGH COURT OF RAJASTHAN
PUSHPENDRA SINGH BHATI, J.
N.S. BABU - Appellant
Vs.
M/S. WOLKEM INDIA LTD. - Respondent
Arbitration Application No. 14 of 2017
Decided On : 16-05-2018
Conciliation Act, 1996 - section 11(6) – Appointment – Contract – Agreement - Applicant and India Limited entered into for acquisition of equity stake in Company owned by applicant in phased manner and also purchase of shares held by promoter applicant and members of his family - Aforesaid also contained purchase of hectares of applicant –Held, Thus keeping in view authoritative pronouncement of Hobble Supreme Court in Wexford Financial - Panamas case supra on facts and in circumstances of case noticed above question with regard to claim of petitioner being barred by limitation is not required to be gone into in present proceeding In view of above present arbitration application is allowed and Former Judge Rajasthan High Delhi Public School Pal Bypass Road Jodhpur is appointed as Sole Arbitrator for adjudication of dispute alleged to have arisen between parties in relation to contract in question - It will be open for parties to raise all contentions on facts and law including question with regard to claim being barred by law before Sole Arbitrator – Appeal allowed
Pushpendra Singh Bhati, J.
This arbitration application has been filed by the applicant under section 11(6) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act') for appointment of the Sole Arbitrator on account of the respondents failing to appoint the Arbitrator in terms of the arbitration clause in the contract.
2. Brief facts of this case, as noticed by this Court, are that the applicant was the promoter of a Company known as 'Kerala Kaolin Private Limited (Now, M/s. Wolkem Clay Private Limited)'. The petitioner and members of his family were holding 100% share capital of the Company. It was involved in mining and manufacturing of China Clay. The Company was not able to achieve the target and the Wolkem Group headed by M/s. Wolkem India Limited and its subsidiaries came forward as Business Partners. Initially, a Memorandum of Understanding (MOU) dated 19.05.2004 was entered between the applicant and M/s. Wolkem Industries Limited for the purchase of land.
3. The applicant and M/s. Wolkem India Limited entered into the MOU for acquisition of 92.5% of equity stake in the Company owned by the applicant in a phased manner and also purchase of shares held by the promoter (applicant) and members of his family. The aforesaid MOU also contained the purchase of land 0.975 hectares of the applicant.
4. The applicant filed an application for appointment of Arbitrator bearing S.B. Misc. Application No.74/2011 (N.S. Babu v. M/s. Wolkem Industries Limited & Ors.), which was withdrawn vide order dated 01.03.2017, which is Annexure-4 of the present application, on the ground to send appropriate notice to the concerned Company, Wolkem India Limited for reference of dispute to the arbitration, and thereafter, to take appropriate proceeding, if occasion arises.
5. Thereafter, the applicant through its counsel gave a notice dated 20.03.2017 (Annexure-5 of the present application) invoking Article 14 of the agreement dated 14.07.2004 for appointment of the Arbitrator to settle the dispute.
6. The arbitration clause (Article 14) contained in the agreement dated 14.07.2004, which was executed between the applicant and the respondents, reads as under :-
"Article 14 : Arbitration
In the event a dispute arises in connection with the validity, interpretation, implementation or alleged breach of this Agreement, the parties shall attempt in the first instance to resolve such dispute through negotiation. If the dispute is not resolved through negotiation within forty five days after commencement of discussions or such longer period as the parties agree to in writing, then either party may refer the dispute for resolution to a sole arbitrator jointly appointed by the Purchaser and the Company. All proceedings in any such Arbitration shall be conducted in English. The Arbitration shall take place in Udaipur, Rajasthan and shall be governed by the Laws of India."
7. The respondents responded the notice (Annexure-5) and rejected the request for appointment of the Arbitrator vide letter dated 20.04.2017, which is Annexure-6 of the present application.
8. Mr. K.K. Shah, learned counsel for the applicant has relied upon the order passed by this Hon'ble Court in The Aluminum Industries Ltd. (ALIND) v. Rajasthan State Mines & Minerals Ltd.(RSMML) & Anr. (S.B. Arbitration Application No. 11/2016 decided on 08.09.2017), which reads as under :-
"1. This arbitration application has been filed by the applicant under section 11 (6) of the Arbitration and Conciliation Act, 1996 ("the Act") for appointment of Sole Arbitrator on account of the respondents failing in appointing the Arbitrator in terms of the arbitration clause in the contract.
2. The applicant company, a sick industrial unit, was awarded contract by the respondent Rajasthan State Mines & Minerals Limited (RSMML) of the work of 'Design, Engineering, Supply, Fabrication, Erection, Testing and Commissioning of Crushing & Screening Plant' at Sanu Lime Stone Project of RSMML. The con
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