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IN THE HIGH COURT OF JAMMU AND KASHMIR AND LADAKH AT JAMMU
ALI MOHAMMAD MAGREY, J.
R.S. Construction - Petitioner
Versus
State Bank of India & Anr. - Respondents
AA No. 19 of 2009
Decided On : 11-11-2022
ARBITRATION - DISPUTE RESOLUTION - Jammu and Kashmir Arbitration and Conciliation Act, 1997; Arbitration and Conciliation Act, 1996 - The court discussed the jurisdictional issues surrounding the appointment of an arbitrator under the Jammu and Kashmir Arbitration and Conciliation Act, 1997, and the implications of the repealed Arbitration and Conciliation Act, 1996. It highlighted that the parties had agreed to the jurisdiction and applicable law in their contract, which limited the court's authority to appoint an arbitrator. The court emphasized the importance of adhering to the agreed terms in the contract regarding arbitration, ultimately concluding that it lacked jurisdiction to entertain the petition.
Fact of the Case:
The petitioner filed a petition under section 11(6) of the Jammu and Kashmir Arbitration and Conciliation Act, 1997, seeking the appointment of an arbitrator as per Clause 45 of their agreement. The respondents contended that the court lacked jurisdiction to appoint an arbitrator since the agreement specified Chandigarh as the venue for arbitration and referred to the provisions of the repealed Arbitration and Conciliation Act, 1996.
Finding of the Court:
The court found that it did not have jurisdiction to entertain the petition for the appointment of an arbitrator, as the parties had explicitly agreed to the application of the Arbitration and Conciliation Act, 1996, and designated Chandigarh as the venue for arbitration. The court reiterated previous rulings that supported this interpretation.
Issues: The primary issue was whether the court had jurisdiction to appoint an arbitrator under the provisions of the Jammu and Kashmir Arbitration and Conciliation Act, 1997, given the agreement's stipulations regarding the applicable law and venue.
Ratio Decidendi: The court held that the jurisdiction to appoint an arbitrator is determined by the terms of the contract between the parties. Since the contract specified the Arbitration and Conciliation Act, 1996, and the venue as Chandigarh, the court concluded it could not entertain the petition under the Act of 1997, which had been repealed.
Final Decision: The court dismissed the petition, stating that the petitioner could approach the appropriate forum in accordance with the law.
JUDGMENT :
Ali Mohammad Magrey, J.
1. The instant petition has been filed under section 11(6) of the Jammu and Kashmir Arbitration and conciliation Act, 1997, for appointment an Arbitrator in terms of Clause 45 of the Agreement. Clause 45 of the agreement being relevant is extracted as under:-
(A) All disputes or differences of any kind whatsoever which shall be at any time arise between the parties have to be touching or concerning the work or the execution or maintenance thereof of this contract or the rights touching or concerning the work or the execution or maintenance thereof of this contract or the construction remaining operation or effect thereof or to the right or liabilities of the parties or arising out of the relation thereto whether during or after determination, fore closure or breach of the contract (other than those in respect of which the decision of any person is by the contract expressed to be final and binding) shall after written notice by either party to the contract to the other of them and to the Appointing Authority who shall be appointed for this purpose by the Employer (SBI) be referred for adjudication to a sole Arbitrator to be appointed as hereinafter provided.
(B) It is also a term of the contract that if Contractor do/does not make any demand for arbitration in respect of any claim(s) within 90 days of receiving intimation from SBI/Architect that the bill after due verification is passed for payment of a lesser amount, or he has accepted the payment as per clause 34(b) whichever is earlier or otherwise, the Contractor's right under this agreement to refer to arbitration shall be deemed to have been forfeited and SBI/Architect shall be relieved and discharged of their liability under this agreement in respect of such claim. Further, it is agreed that for the purpose of the Claim such notice is deemed to have been received by the Contractor(s) within 2 days of posing of the letter by SBI/Architect or when delivered by hand immediately after receipt thereof by the Contractor(s), whichever is earlier. Further, a letter signed by the officials of SBI/Architect that the letter so posted to the Contractor(s) shall be conclusive for the purpose of appointing the sole Arbitrator referred to 3 AA No. 19/2009 above, the Appointing Authority will send within thirty days of receipt by him of the written notice, aforesaid to the Contractor, a panel of three names of persons who shall be presently unconnected with the Organization for which the work is executed from the following categories of Arbitrators.
i. Retired High Court/Supreme Court Judges, who have experience in handling Arbitration cases.
ii. Members of Council of Arbitration.
iii. Fellow of the Institution of Engineers, or Indian Institute of Architects.
iv. Eminent Retired Chief Engineers from State/Central P.W.D/ Public Sector Undertakings, of good reputation and integrity.
(C) The Contractor shall on receipt of the names as aforesaid select any one of the persons named to be appointed as a sole Arbitrator and communicate his name to the Appointing Authority within thirty days of receipt by him of the names. The Appointing Authority shall thereupon without any delay appoint the said person as the sole Arbitrator. If the Contractor fails to communicate such selection as provided above within the specified, the Appointing Authority shall make the selection and appoint the selected person as the Sole Arbitrator.
(D) If the Appointing Authority fails to send the Contractor, the panel of three names as aforesaid within the period specified, the Contractor shall send to the Appointing Authority a Panel of three names of persons out of the above mentioned four categories of Arbitrators who shall all be unconnected with either party. The appointing Authority shall on receipt by him of the names as aforesaid select any one of the people named and appoint him as the sole Arbitrator. If the Appointing Authority fails to select 4 AA No. 19/2009 the pe
AI
The court established that the jurisdiction for appointing an arbitrator is governed by the terms of the contract between the parties, and any deviation from those terms, including the applicable law....
The court ruled it lacked jurisdiction to entertain a petition challenging an arbitration award as the arbitration was conducted in New Delhi, not in the court's jurisdiction.
The court upheld party autonomy, determining that the High Court has jurisdiction to appoint a Sole Arbitrator even with an exclusive jurisdiction clause designating Gurugram as the venue.
The designated seat of arbitration is akin to an exclusive jurisdiction clause, and the court's jurisdiction is determined based on the arbitration clause and legal precedents.
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