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High Court of Judicature at Madras
THE HONOURABLE CHIEF JUSTICE MR. A.K. GANGULY
M/s. Kone Elevator India Pvt. Ltd.
Versus
M/s. Indo Pacific Software & Entertainment Ltd.
O.P.Nos.704 and 711 of 2007
Decided on : 19-09-2008
Arbitration - Appointment of Arbitrator - Arbitration and Conciliation Act, 1996 - Section 11 - A-5) Arbitration - Clause-1 of Supplementary Agreements - Section 2(1)(e), Section 11(12)(b) - Chennai, Nagpur - Jurisdiction - Appointment of Arbitrator
Fact of the Case:
The petitioner filed two original petitions under Section 11 of the Arbitration and Conciliation Act, 1996, seeking the appointment of an arbitrator to resolve disputes arising from two contracts. The respondent refused to consent to arbitration and raised issues regarding jurisdiction and modification of the arbitration clause.
Finding of the Court:
The court found that the respondent's refusal to consent to arbitration did not render the petition incompetent. It held that the arbitration clause in the original agreement must prevail over the subsequent agreements. The court also determined that it had jurisdiction to appoint an arbitrator based on the principle of part of the cause of action.
Issues: The issues before the court were whether the petition was competent, whether the arbitration clause had been modified, and whether the court had jurisdiction to appoint an arbitrator.
Ratio Decidendi: The court held that the refusal to consent to arbitration did not render the petition incompetent. It also determined that the arbitration clause in the original agreement prevailed over subsequent agreements. Additionally, the court found that it had jurisdiction to appoint an arbitrator based on the principle of part of the cause of action.
Final Decision: The court appointed an arbitrator and directed the parties to adjudicate the dispute through arbitration, preferably within six months.
The Honourable Chief Justice:
These two original petitions under Section 11 of the Arbitration and Conciliation Act, 1996 were filed by the petitioner in O.P.Nos.704 and 711 of 2007 praying for the appointment of an arbitrator for resolving the disputes and differences between the petitioner and the respondent in respect of the two contacts entered into between them.
2. O.P.No.704 of 2007 was presented on 18.08.2007 and O.P.No.711 of 2007 on 27.08.2007, and were heard together, as common issues of facts and law are involved.
3. The above two original petitions arose out of two contracts entered into between the petitioner and the respondent. The first contract is dated 112. 2005 and it is in respect of supply, erection and installation of escalators. The arbitration clause in the said contract is as follows:-
“A-5) Arbitration:
In the event of difference or dispute arising out of, under or in connection with this agreement, over the rights of obligation of parties hereto, the dispute or difference shall be referred to the Arbitration of a Sole Arbitrator to be appointed by KONE Elevator India Private Limited. The Venue of the Arbitrator shall be at Chennai and the Courts in the City of Chennai alone shall have the jurisdiction in relation to the Arbitration and the provisions of the Arbitration and Conciliation Act, 1996 shall be applicable to such arbitration.”
4. The other contract is for supply, erection and installation of elevators for goods-cum-passengers, and the arbitration clause therein, which is at page 17 of the typed set, is set out below:-
“A-5) Arbitration:
In the event of difference or dispute arising out of, under or in connection with this agreement, over the rights of obligation of parties hereto, the dispute or difference shall be referred to the Arbitration of a Sole Arbitrator to be appointed by KONE Elevator India Private Limited. The Venue of the Arbitrator shall be at Chennai and the Courts in the City of Chennai alone shall have the jurisdiction in relation to the Arbitration and the provisions of the Arbitration and Conciliation Act, 1996 shall be applicable to such arbitration.”
.5. Thereafter, two supplementary agreements were entered into in relation to the escalators, viz., first contract. But, there is no such agreement in respect of elevators, viz., second contract. The first supplementary agreement is dated 16.02.2006 and was made at Nagpur between the parties, and Clause - 1 of the said supplementary agreement states that the said agreement will be read and constitute a part of the original agreement dated 112. 2005. In the said supplementary agreement Clause - 14 contains the provision relating to arbitration and the said provision is as follows:-
.“14. All disputes and differences of any kind whatever arising out of or in connection with this agreement shall be amicably settled at the first instance mutually by Indo Pacific Software & Entertainment Ltd. and Kone. If no such amicable solution at the first instance, then the dispute or differences shall be referred to the arbitration and will be dealt according to the provisions of Arbitration and Conciliation Act, 1996.”
.6. The second supplementary agreement was made at New Delhi on 16.02.2006, and in the said agreement also it was made clear that the same will be read and constitute a part of the agreement vide their offer letter KEI/0035/200512/20 which is mentioned in the first agreement dated 112. 2005. In this agreement also there is an arbitration clause at Clause - 12 of the agreement, which runs as follows:-
.“12. All disputes and differences of any kind whatever arising out of or in connection with this agreement shall be amicably settled at the first instance mutually by Indo Pacific Software and Entertainment Ltd. and Kone. If no such amicable solution at the first instance, then the dispute or differences shall be referred to the arbitration and will be dealt according to the provisions of Arbitration and Concil
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