IN THE HIGH COURT OF JUDICATURE AT MADRAS
INDIRA BANERJEE, ABDUL QUDDHOSE, JJ.
M/s. Karan Ores & Specials - Appellant
Vs.
M/s. Endeka Ceramic India Pvt. Ltd. & Anr. - Respondents
O.S.A. No. 155 of 2014 & M.P. No. 1 of 2014
Decided On : 06-08-2018
Arbitration and Conciliation Act, 1996 - Section 37 - Section 34 - Section 11(6) - Section 11 - Section 34 - Section 42 - Section 7 - Section 7(4)(b) or 7(4)(c) - Section 7(5) - Section 16 - Arbitrator - Arbitration Award - Instant Appeal has been filed by Appellant under Clause 15 of the Letters Patent against order of the learned Single Judge dismissing Application filed by Appellant seeking to set aside Arbitration Award, passed by second respondent against Appellant, for a sum of Rs.1,33,92,891.69 together with interest at 10% per annum till date of award and 12% per annum from date of award till payment – Held, Appellant also entered appearance in Application filed by first respondent under Section 11(6) of the Arbitration and Conciliation Act 1996, for appointment of Arbitrator and did not raise any objection for appointing second respondent, former Judge of this Court as Arbitrator - Honble Chief Justice by order in O.P. appointed second respondent as Arbitrator and objections earlier raised by Appellant were not raised by Appellant in O.P. - Order passed in O.P. under Section 11(6) of Act has become final, since Appellant has not challenged same - As held by Honble Supreme Court in SPB & Co. Vs. Patel Engineering Ltd., and another reported in (2015) 8 SCC 618 cited supra order passed under Section 11(6) of the Act is a judicial order. Hence, if the Appellant was aggrieved by the appointment of the Arbitrator, they should have challenged the said order, which they have not done so in instant case - Appellant has also filed Application under Section 34 of the Arbitration and Conciliation Act 1996, to set aside Award, passed by second respondent only before Madras High Court - Appellant has approbated and reprobated its stand by challenging Award on ground that Madras High Court does not have jurisdiction and only Bangalore Court has jurisdiction to entertain an Application under Section 34 before Madras High Court - Arbitrator has passed a reasoned and detailed Award - As seen from award, no serious dispute has been raised by Appellant on merits of claim - Arbitrator has considered each and every objection raised by Appellant to statement of claim in accordance with law - Therefore, decisions relied upon by learned Senior Counsel for the Appellant are not applicable to facts of instant case – Appeal Dismissed.
Abdul Quddhose, J.
The instant Appeal has been filed by the Appellant under Clause 15 of the Letters Patent read with Section 37 of the Arbitration and Conciliation Act, 1996 against the order of the learned Single Judge dated 10.09.2013 passed in O.P.No.26 of 2012, dismissing the Application filed by the Appellant under Section 34 of the Arbitration and Conciliation Act, 1996 seeking to set aside the Arbitration Award dated 11.10.2011, passed by the second respondent against the Appellant, for a sum of Rs.1,33,92,891.69 together with interest at 10% per annum from 18.04.2009 till the date of the award and 12% per annum from the date of award till payment.
I. Points for consideration:
The points for consideration in the instant Appeal filed under Section 37 of the Arbitration and Conciliation Act, 1996 is ;-
(a) Whether the Arbitrator had jurisdiction to entertain the claim of the first respondent at Chennai, since the suits of the arbitration was fixed under the Distributor Agreement at Bangalore.
(b) Whether any Arbitration dispute can be raised in respect of transactions after 31.03.2008 being the date of expiry of the Distributor Agreement.
(c) Whether the claim is admissible when the claim statement, before the Arbitrator was not signed and verified by a person duly authorised by the company.
(d) Whether the grounds for challenge to the Arbitration Award come within the scope of Section 34 of the Arbitration and Conciliation Act, 1996.
(e) Whether the learned Single Judge erred in dismissing the application under Section 34 of the Arbitration and Conciliation Act, 1996.
II. Findings of the learned Single Judge:
The Learned Single Judge while considering the application under Section 34 of the Arbitration and Conciliation Act, 1996 has rejected the objections raised by the Appellant by giving the following reasons:-
(i) Insofar as the question of jurisdiction is concerned, even though under clause 10.3 of the Distributor Agreement, the suits of Arbitration proceedings was stipulated as Bangalore, the Appellant having suffered an order from this Court under Section 11(6) of the Arbitration and Conciliation Act, 1996 in O.P.No.574 of 2009 for appointment of an Arbitrator and the same having been allowed by an order dated 19.03.2010 passed by the learned Chief Justice of this Court appointing the second respondent as the Arbitrator, only this Court will have the jurisdiction. The order under Section 11(6) of the Act, appointing the second respondent as Arbitrator was passed, after due service of notice on the Appellant and the Appellant having entered appearance in O.P.No.574 of 2009, did not file any counter affidavit raising any question of jurisdiction. The learned Single Judge, rejected the contention that Chennai cannot be a suits of the Arbitration irrespective of the stipulation contained in the distribution agreement, since the Appellant has not challenged the appointment of Arbitrator by this Court and has also not challenged the maintainability of the Application under Section 11 of the Arbitration and Conciliation Act, 1996 filed by the first respondent which order has become final.
(ii) Insofar as the second ground of challenge, that the Distributor Agreement period expired on 31.03.2008 and therefore, no dispute arising out of subsequent transactions can be adjudicated by the Arbitrator, the learned Single Judge rejected the said contention by observing that, even though it is true the Distributor Agreement was to be in force only upto 31.03.2008, the fact that there were supplies made even thereafter and that, there were also payments made thereafter are borne out by records. In other words, the Distributor Agreement was reduced into writing on 16.04.2007 and continued to be operating between the parties without a formal renewal for a subsequent period. In such circumstances, the disputes that the parties had, could be traceable and referable only to the first Agreement dated 16.04.2007. The learned Single Judge,
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