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IN THE HIGH COURT OF JUDICATURE AT MADRAS
V. PARTHIBAN, J.
India Pistons Limited, Chennai - Appellant
Versus
Ganapathi Chandrasekar - Respondent
Arb.O.P. No. 10 of 2021
Decided on : 10-11-2021
Arbitration and Conciliation Act, 1996 - Section 11, (6), (6-A), 1, 4, 9, 11, 13, 15, 8, 34(2)(a) and (b) - Companies, Act, 1956 - Tamil Nadu Shops and Establishments Act, 1947 - Arbitration and Conciliation (Amendment) Act, 2019 - Company - Appointment of a Arbitrator - Resolve Dispute - Whether an arbitration agreement is in existence - Whether there is any arbitration agreement between parties or not – Held, It is not in dispute that there is an arbitration clause between parties in agreement - But only point of opposition against invocation of arbitration clause is pendency of appeal before Special Joint Commissioner of Labour under provisions of Act, 1947 - Correspondingly, it is always within right of respondent herein to go before Arbitral Tribunal and raise whatever objections he may think valid and proper, as to the maintainability of proceedings, particularly, with reference to pending Shop Act Appeal before Labour Authority - In terms of legal position as prevailing today, this Court cannot conduct a detailed adjudication and pronounce as to validity of invocation of arbitration clause by parties - At this, learned counsel for respondent requested this Court to observe that reference to Arbitration under Section 11 of Act, 1996, shall not be treated any way prejudicial to right or claim of respondent in proceedings pending before Special Joint Commissioner of Labour - This Court makes it clear that reference to Arbitrator should not be construed to be affecting statutory right of respondent herein to avail any legal remedy open to him - It is always open to Arbitral Tribunal (i.e. sole Arbitrator) to take into consideration pendency of said Appeal filed under Act, 1947, while ruling on his jurisdiction in respect of dispute - It is made clear that parties are at liberty to raise preliminary objection as to maintainability of arbitration before learned Arbitrator, who shall decide issue on its validity before proceeding further with arbitration on merits - Arbitrator shall be required to rule on his own jurisdiction in terms of Section 16 of Arbitration and Conciliation Act, 1996 and in case Arbitrator takes a decision to reject plea, he shall continue with arbitral proceedings and make an Arbitral Award - Petition allowed.
JUDGMENT :
(Prayer: Arbitration Original Petition filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 praying to appoint a Sole Arbitrator to resolve the dispute between the petitioner and the respondent under Clause 17 of the Agreement, dated August 28, 2014.)
1. This Original Petition has been filed under Section 11(6) of the Arbitration and Conciliation Act, 1996, for appointment of a Sole Arbitrator to resolve the dispute between the petitioner and the respondent under Clause 17 of the Agreement, dated August 28, 2014.
2. Brief facts which gave rise to the filing of the above Original Petition are stated hereunder:
(b) The respondent is a professional cricket player.
(c) The petitioner-Company offered employment to the respondent in the rank of Senior Executive-Finance and the offer letter was issued by the petitioner-Company to the respondent on 01.06.2006. The respondent accepted the offer letter and thereafter, he was appointed to the position of Senior Executive--Finance in the Company’s Market Sales Division at their Sembiam Plant. The terms and conditions governing the employment of the respondent, were stipulated in that offer letter. Apart from the terms and conditions referred to in the offer letter, the respondent’s employment was also governed by the other Rules and Regulations of the Company.
(d) While being employed in the rank of an Executive, the respondent was permitted to play for the IPCC in the First Division Matches under the aegis of the Tamil Nadu Cricket Association.
(e) The respondent has also executed an agreement with the petitioner-Company on 28.08.2014, accepting certain conditions imposed by the Company during the subsistence of the respondent’s employment with the Company. In terms of Clause 17 of the said agreement, it was also stipulated that in the event of any dispute or differences arising out of the agreement or in connection with the interpretation of the agreement, the same shall be referred for ‘Arbitration” to be conducted by a sole Arbitrator, appointed by the Managing Director of the employer under the provisions of the Arbitration and Conciliation Act, 1996.
(f) According to the petitioner-Company, the respondent had violated the terms and conditions of the agreement, dated 28.08.2014, particularly, Clause 7 of the agreement. The petitioner-Company was therefore constrained to terminate the employment of the respondent, vide letter dated 23.3.2020, with effect from 01.04.2020. The respondent thereafter approached the Special Joint Commissioner of Labour by filing an appeal in T.S.E.Appeal No.1 of 2021, under the provisions of the Tamil Nadu Shops and Establishments Act, 1947 (for short, ‘Act, 1947’), assailing the order of termination.
(g) However, according to the petitioner, in the face of the arbitration agreement between the parties, the dispute not only is in relation to the termination of the employment, but it transcends beyond that, as between the parties, which could be settled only before the Arbitral Tribunal duly appointed by this Court. According to the petitioner-Company, a notice was issued to the respondent under Section 21 of the Act, 1996, on 03.03.2021.
(h) Although the respondent has not denied the existence of a valid arbitration agreement, however, did not choose to respond positively to the notice, but called upon the petitioner-Company to withdraw the legal notice issued under the provisions of the Act, 1996. Therefore, the petitioner-Company is constrained to file the present Original Petition (for short, ‘O.P’) for appointment of a sole Arbitrator to resol
The main legal point established in the judgment is the conclusive decision on the limitation plea and the importance of expeditious disposal of arbitration matters.
The existence of an arbitrable dispute, the validity of the arbitration agreement, and the existence of an arbitrable dispute are to be determined by the arbitral tribunal.
The court held that its review under Section 11(6) is limited to confirming the existence of an arbitration agreement, without delving into substantive disputes, which is for the Arbitrator to decide....
The existence of an arbitration agreement under Section 11(6) allows for disputes related to a memorandum of family settlement to be arbitrable, reinforcing the principle of kompetenz-kompetenz.
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