2006 Supreme(Mad) 369
Madras High Court
S.RAJESWARAN
Reena Silicate Industries - Appellant
Versus
GAIL (India) - Respondent
Decided On : 02/14/2006
Application for appointment of Arbitrator dismissed.
Headnote:Arbitration and Conciliation Act (26 of 1996), Section 9 - Appointment of Arbitrator - Application for - Letter written by applicant to respondent requesting reference of arbitration - No steps taken in further arbitration proceedings without any explanation for inaction --Application dismissed.
2. The Applicant firm is a manufacturer of Sodium Silicate having its manufacturing unit at Uthamacholapuram, Narimanan P.O. Nagapattinam District. For the above manufacturing activity, they require natural gas. For the supply of natural gas they entered into a contract with the respondent on 27-12-1997 with a duration of five years. It is his case that all of a sudden the respondents in the course of extending the first five years' contract unilaterally suggested certain conditions and accordingly they amended the contract dated 16-12-2002. It is his case that he was forced to sign the said contract under protest. The applicant made representation to alter certain amendments to be carried out in the respondents' draft of the proposed 'amended contract' dated 16-12-2002. But there was no response from the respondents. Later, the respondents promised to revert back on the issue. It is the case of the applicant that the respondents have not done anything in this regard. It is also stated by the applicant that there has always been a threat to disconnect the gas supply. Therefore, apprehending disconnection of gas supply, the applicant has filed this O.A. pending arbitration proceedings. This Court granted an order of interim injunction on 8-4-2005.
3. Learned counsel for the Applicant submitted that the five year contract dated 16-12-2002 was amended unilaterally by the respondent without having any discussion with the Applicant and the Applicant was forced to sign under duress and protest. He also submitted that the Applicant had made request for carrying out certain amendments in the respondents' proposed 'amended contract' dated 16-12-2002 and the same is pending. Regarding intimation of arbitration, the respondents in their reply dated 2-8-2003 promised to revert back on the issue of referring the dispute to Arbitration after consultations with its head office. But it is his case that till date the respondents have not responded positively and that they are avoiding the constitution of the Arbitration Tribunal leave alone commencing the adjudication proceedings. Hence he submitted that the interim injunction granted on 8-4-2005 has to be continued.
4. Common counter-affidavit has been filed by the respondents. Learned Senior counsel Mr. R. Muthukumaraswamy while reiterating the averments made in the counter affidavit, submits that the contract was signed on 27-12-1997. As per the contract, the natural gas is to be supplied to the applicant for a period of 5 years up to 31-12-2002, in the case of the applicants it was for about three years, i.e. from 27-2-1999 to 31-12-2002. When the applicant sought for extension of supply of gas, certain amendments were incorporated and a new contract was signed on 16-12-2002. It is specifically urged by the learned Senior Counsel that the applicant signed the contract without any protest. It is also submitted by him that the gas supply was continued beyond 16-12-2002 initially for a period of one year and subsequently extended from time to time and the last of such extension was valid up to 30-9-2005. Thus the applicant has entered into an agreement with the respondent department and the respondents are supplying gas as per terms of the contract only. Though the period was over on 30-9-2005, the supply is being continued as per the orders of this Court. It is his case that only to prolong the issue and without adhering to the revised terms, the petitioner has filed this application under Sec. 9 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act'). The interim injunction is still