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2022 Supreme(Mad) 3044

IN THE HIGH COURT OF JUDICATURE AT MADRAS
M. SUNDAR, J.
Mohana Rao Dandamudi, Chennai - Appellant
Versus
The Government of Tamil Nadu, Represented by the Secretary to the Government, Chennai - Respondent
Arb.O.P (Com.Div) No. 119 of 2022
Decided On : 21-07-2022

Advocates appeared:
For the Petitioner:Preeti Mohan, Advocate. For the Respondent:R. Neelakandan, Additional Advocate General assisted by P. Harish, Government Advocate.

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.

Headnote:

Arbitration - Appointment of Sole Arbitrator - Arbitration and Conciliation Act, 1996 (Act No.26 of 1996) - Section 11(5) - Clauses 39 and 40 of primary contract

Fact of the Case:

The petitioner filed a petition under Section 11(5) of the Arbitration and Conciliation Act, 1996, seeking the appointment of a sole arbitrator to resolve disputes arising from clauses 39 and 40 of the primary contract dated 24.06.1985. The disputes had previously led to writ petitions and an arbitration award, which was later set aside.

Finding of the Court:

The court found that the limitation plea raised by the State was conclusively decided in a previous order and that the existence of the arbitration agreement was not disputed. The court also highlighted the importance of expeditious disposal of the matter and appointed a sole arbitrator to adjudicate the disputes.

Issues: The issues included the applicability of Section 14 of the Limitation Act, 1963, and the interpretation of the arbitration agreement in light of previous court orders and legal principles.

Ratio Decidendi: The court held that the limitation plea had been conclusively decided in a previous order and that the existence of the arbitration agreement was not disputed. The court also emphasized the need for expeditious disposal of arbitration matters.

Final Decision: The court appointed Hon'ble Mrs. Justice R.Banumathi (Retd.) as the sole arbitrator to adjudicate the disputes and render an award in accordance with the Madras High Court Arbitration Proceedings Rules 2017.

JUDGMENT

(Prayer: Petition filed under Section 11(5) of the Arbitration and Conciliation Act, 1996 to appoint a sole Arbitrator to constitute the arbitral tribunal to resolve the disputes that have arisen between the petitioner and the respondent.)

1. This order will now dispose of captioned 'Arbitration Original Petition' ['Arb.OP' for the sake of brevity].

2. This order has to be read in conjunction with and in continuation of proceedings made in the first listing (on 21.03.2022) of captioned Arb.OP before this Court. This 21.03.2022 proceedings reads as follows:

'Captioned 'Arbitration Original Petition' [hereinafter 'Arb OP' for the sake of convenience and clarity] has been presented in this Court on 21.12.2021 inter alia under Section 11(5) of 'The Arbitration and Conciliation Act, 1996 (Act No.26 of 1996)' [hereinafter 'A and C Act' for the sake of convenience and clarity] with a prayer for appointment of a sole arbitrator.

2. Ms.Preeti Mohan, learned counsel on record for petitioner who is before this Court submits that the captioned Arb OP is predicated on clauses 39 and 40 (under covenant No.VIII captioned 'Arbitration') in 'an agreement dated 24.06.1985' [hereinafter 'primary contract' for the sake of convenience and clarity]. Aforementioned clauses 39 and 40 (under main clause No.VIII) of primary contract read as follows:

'VIII. Arbitration:

39. If any dispute and/or difference shall at any time arise between the parties to this agreement or any clause or their respective rights, claims or liabilities hereunder or otherwise however, in relation to or arising out of or concerning this agreement, such dispute and/or differences shall be referred to arbitration by two arbitrators, one to be appointed by each party and in the event of the arbitrators differing, to an umpire to be appointed by the said two arbitrators before entering upon the reference. The Arbitration Act 1940 as amended from time to time shall apply.

40. The venue of arbitration shall be at Madras only unless otherwise agreed to between the parties.'

3. It is submitted that the aforementioned clauses serve as arbitration agreement between the petitioner and respondents i.e., arbitration agreement within the meaning of Section 2(1)(b) read with Section 7 of A and C Act.

4 It is submitted that primary contract is essentially one for investments in what is known as 'INTEGRATED TOURISM PROJECTS' and primary contract was preceded by two other agreements but it may not be necessary to dilate on those aspects of the matter owing to the narrow and limited scope of the captioned Arb OP which is under Section 11 of A and C Act. Suffice to say that primary contract ran into rough weather resulting in writ petitions in this Court which were disposed of by orders dated 20.07.2009 (W.P.Nos.7162 of 1999 and 5212 of 2000) inter alia relegating the parties to arbitration, pursuant to which an arbitration award dated 15.06.2016 came to be made by a sole arbitrator. This arbitral award dated 15.06.2016 was assailed under Section 34 of A and C Act vide O.P.No.549 of 2016 and after full contest, this Section 34 petition was allowed (setting aside the arbitral award) by a Hon'ble single Judge of this Court in and by an order dated 22.04.2021 inter alia preserving the rights of parties under Section 43(4) of A and C Act qua re-arbitration.

5. After the aforementioned trajectory, the petitioner issued a trigger notice dated 10.06.2021 and this was duly received by respondents 1 and 2 on 11.06.2021 and 12.06.2021 respectively is learned counsel's say. It is further submitted that both respondents have neither responded nor replied to the trigger notice necessitating the presentation of captioned Arb OP in this Court.

6. Prima facie case for issue of notice made out.

7. Issue notice.

8. Ms.P.Vijaya Devi, learned Government Advocate who is present in this Court on behalf of Mr.Edwin Prabhakar, learned Special Government Pleader submits that State co

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