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2022 Supreme(Mad) 1181

IN THE HIGH COURT OF JUDICATURE AT MADRAS
M. SUNDAR, J.
M/s. Chitale & Son, Represented by Kapil S. Chitale - Appellant
Versus
M/s. Arshakerala Ayurveda Medical Innovations Private Limited, Kerala - Respondent
Arb O.P.(Com. Div.) No. 27 of 2022
Decided On : 02-03-2022

Advocates appeared:
For the Petitioner:K. Sarveshwar, Advocate. For the Respondent:H. Siddharth, Advocate.

The Court has the authority to downsize the number of members of an Arbitral Tribunal in a Section 11 legal drill based on the nature of arbitrable disputes and other determinants.

Headnote:

Arbitration - Appointment of Sole Arbitrator - Arbitration and Conciliation Act, 1996 - Section 11(6) - Clause 10 of the Agreement dated 28.10.2016 - A and C Act

Fact of the Case:

The petitioner filed an Arbitration Original Petition under Section 11(6) of the Arbitration and Conciliation Act, 1996, seeking the appointment of the respondent's nominee Arbitrator in accordance with the agreement dated 28.10.2016 to resolve disputes.

Finding of the Court:

The Court appointed a sole Arbitrator, emphasizing the well-settled principle that a Court in a Section 11 legal drill can downsize the number of members of an Arbitral Tribunal based on the nature of arbitrable disputes and other determinants.

Issues: Appointment of a sole Arbitrator, downsizing the proposed arbitral tribunal, and adjudication of disputes arising from the primary agreement.

Ratio Decidendi: The Court's decision was influenced by the well-settled principle that a Court in a Section 11 legal drill can downsize the number of members of an Arbitral Tribunal based on the nature of arbitrable disputes and other determinants.

Final Decision: The Court appointed Hon'ble Mr. Justice G. Rajasuria as the Sole Arbitrator to adjudicate the disputes arising from the primary agreement in accordance with the Madras High Court Arbitration Proceedings Rules, 2017.

JUDGMENT

(Prayer: Arbitration Original Petition filed under Section 11(6) of the Arbitration and Conciliation Act, 1996, to appoint the respondent’s nominee Arbitrator in terms of the Agreement dated 28.10.2016 to adjudicate the disputes that have arisen between the Petitioner and the Respondent.)

1. This order will dispose of the captioned Arb OP. This order has to be read in conjunction with and in continuation of earlier proceedings made by this Court in the previous two listings on 31.01.2022 and 22.02.2022, which read as follows:

‘Proceedings dated 31.01.2022

Issue notice to the respondent, returnable on 22.02.2022. Private note is also permitted.

Proceedings dated 22.02.2022

Mr.K.Sarveshwar, learned counsel of M/s.Giridhar and Sai (Law Firm) on behalf of the petitioner is before this virtual Court.

2. Captioned Arb OP has been presented in this Court on 26.11.2021 under Section 11(6) of ‘The Arbitration and Conciliation Act, 1996 (Act No.26 of 1996)’ [hereinafter ‘A and C Act’ for the sake of brevity].

3. Hon’ble Predecessor Judge in and by proceedings made in the listing on 31.01.2022 has ordered notice and permitted private notice also. Respondent has been duly served. Mr.H.Siddarth, learned counsel with address for service at No.48, Second Line Beach Road, Parrys, Chennai-600 001 (Mobile: 98846 72733), who is before this Court submits that he has instructions to file vakalatnama on behalf of the lone respondent along with his co-counsel. Learned counsel submits that vakalatnama will be filed within a week i.e., on or before 01.03.2022.

List on 02.03.2022.’

2. Pursuant to the aforementioned earlier proceedings made in the previous listing on 22.02.2022, learned counsel has entered appearance on behalf of the lone respondent and Mr.H.Siddarth, learned counsel is before this Court on behalf of the lone respondent.

3. Mr.K.Sarveshwar, learned counsel of M/s.Giridhar and Sai (Law Firm) on behalf of the sole petitioner is before this Court.

4. Captioned Arb OP is predicated on Clause 10 of an agreement dated 28.10.2016 between the petitioner and respondent. This agreement is captioned ‘CONTRACT OF AGREEMENT-ARCHITECTURAL, INTERIOR DESIGN AND LANDSCAPE SERVICES’. This 28.10.2016 agreement shall be referred to as ‘said primary agreement’. Clause 10 of said primary agreement reads as follows:

‘10. DISPUTE RESOLUTION THROUGH ARBITRATION

In the event of any dispute between the PARTIES, such dispute shall be resolved through arbitration by a Sole Arbitrator agreed upon by the PARTIES. Any such arbitration shall be held and conducted as per the provisions of the Arbitration and Conciliation Act, 1996. In case the parties are not able to reach a consensus to decide a person as a Sole Arbitrator, each Party shall appoint one Arbitrator each, and these two (2) chosen Arbitration shall jointly select an Arbitrator who shall be the Umpire to the proceeding. The decision of the Umpire Arbitrator shall be final and binding on the Parties. The term “Court“ occurring in the relevant clause of the Indian Arbitration and Conciliation Act shall, in respect of the Arbitration proceedings be in reference to the Civil/Courts in Chennai City.’

5. Aforementioned Clause 10 of said primary agreement serves as an arbitration agreement between the petitioner and the respondent. In other words aforementioned Clause 10 is the arbitration agreement between the petitioner and respondent being arbitration agreement within the meaning of Section 2(1)(b) read with Section 7 of A and C Act.

6. Before proceeding further, it is made clear that short forms and short references used in the proceedings made in the previous listings shall continue to be used in the instant proceedings also. The proceedings made in the earlier listings [extracted and reproduced supra] shall be read as an integral part and parcel of this order.

7. There is no disputation or disagreement about the existence of the aforementioned arbitration agreement between the par

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