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2023 Supreme(Mad) 2727

IN THE HIGH COURT OF JUDICATURE AT MADRAS
ABDUL QUDDHOSE, J.
A. Ramesh – Appellant
Versus
M/s. Greenchoice Construction Company Private Ltd., Chennai – Respondent
Arb. O.P. (Com.Div.) No. 247 of 2021
Decided On : 30-08-2023

Advocates appeared:
For the Petitioner:M/s. R. Sahana, Advocates. For the Respondent:M/s. Umasudthan, Advocates.

The main legal point established is the court's authority to appoint a Sole Arbitrator to adjudicate disputes arising from a Joint Development Agreement, despite the respondent's challenge to the validity of the arbitration agreement.

Headnote:

Arbitration - Joint Development Agreement - The court appointed a Sole Arbitrator to adjudicate the dispute between the parties arising out of the Joint Development Agreement dated 07.03.2011.

Fact of the Case:

The petitioner filed a petition under Section 11 of the Arbitration and Conciliation Act, 1996, seeking the appointment of an Arbitrator to adjudicate the disputes arising from a Joint Development Agreement with the respondent. The respondent disputed the existence of a valid arbitration agreement due to the lack of consent from other flat owners involved in the agreement.

Finding of the Court:

The court appointed a Sole Arbitrator to adjudicate the dispute between the parties arising out of the Joint Development Agreement dated 07.03.2011, granting the respondent liberty to file an application under Section 16 of the Arbitration and Conciliation Act, 1996, questioning the jurisdiction of the Arbitrator and the existence of a valid arbitration agreement.

Issues: Dispute over the validity of the arbitration agreement due to lack of consent from other flat owners involved in the Joint Development Agreement.

Ratio Decidendi: The court found that there was a prima facie consideration of an arbitration clause and appointed a Sole Arbitrator to adjudicate the dispute, while granting the respondent liberty to challenge the jurisdiction of the Arbitrator and the existence of a valid arbitration agreement.

Final Decision: The court appointed Mr. Naveen Kumar Murthy, Advocate, as the Sole Arbitrator to adjudicate the dispute between the parties arising out of the Joint Development Agreement dated 07.03.2011, and provided directions for the conduct of the arbitration process.

JUDGMENT

(Prayer: Arbitration Original Petition (Commercial Division) filedunder Section 11 of the Arbitration and Conciliation Act, 1996, prayingto appoint a Sole Arbitrator in terms of the said Joint DevelopmentAgreement dated 07.03.2011 for adjudicating the disputes/claimsbetween the petitioner and the respondent that has arisen under the saidJoint Development Agreement dated 07.03.2011 that had been enteredinto by and between the parties herein and to direct the respondent topay the costs of this proceedings.)

1. This petition has been filed under Section 11 of the Arbitrationand Conciliation Act, 1996, for appointment of an Arbitrator by thisCourt.

2. The petitioner had entered into a Joint Development Agreementdated 07.03.2011 with the respondent. There seems to be a disputearising out of the same. The petitioner had agreed for demolition of hisflat and for construction of a new flat by the respondent under the saidJoint Development Agreement. In the very same building, there were 11other flat owners who had also separately entered into a JointDevelopment Agreement with the respondent. The petitioner hasinvoked the arbitration clause available in the Joint DevelopmentAgreement dated 07.03.2011 by issuing a notice to the respondent on26.08.2020. A reply was also sent by the respondent on 06.09.2020,disputing the existence of the valid arbitration agreement since the other11 flat owners have not agreed for arbitration in accordance with thearbitration clause. The respondent also stated that the other 11 flatowners have received the payments from the respondent and they do nothave any claim against the respondent. Since the respondent did notagree for arbitration, the petitioner has filed this petition under Section11 of the Arbitration and Conciliation Act.

3. The respondent has filed a counter-affidavit in this petitionreiterating the contents of the reply dated 06.09.2020 sent to thearbitration invocation notice dated 26.08.2020, which are as follows:-

a) There is no valid arbitration agreement between thepetitioner and the respondent. According to therespondent, since the other 11 flat owners have notjoined with the petitioner, the dispute cannot bereferred to arbitration as per Clause 24 of the JointDevelopment Agreement dated 07.03.2011.

b) Since the other flat owners have not given consentfor arbitration, the dispute raised by the petitionerarising out of the Joint Development Agreementdated 07.03.2011, is not an arbitrable dispute.

4. On a prima facie consideration, there is an arbitration clause.

5. Learned counsel for the respondent has now made anendorsement in the Court bundle stating that the respondent may bepermitted to raise all objections that have been raised in this petitionbefore the Arbitrator, once the Arbitrator is appointed by this Court, asand when an application is filed under Section 16 of the Arbitration andConciliation Act by the respondent, questioning the jurisdiction of theArbitrator to decide the dispute that has been raised by the petitionerarising out of the Joint Development Agreement dated 07.03.2011.Learned counsel for the respondent has also made an endorsementgiving the respondent''s consent for appointment of an Arbitrator by thisCourt.

6. No prejudice would be caused if such a liberty is granted bythis Court. Learned counsel for the petitioner is also agreeable for thesame.

7. After recording the endorsement made by the learned counselfor the respondent, this Arbitration Original Petition is disposed of, byappointing Mr.Naveen Kumar Murthy, Advocate, as a Sole Arbitrator,to adjudicate the dispute between the petitioner and the respondentarising out of the Joint Development Agreement dated 07.03.2011.

8. For the foregoing, this Court passes the following directions:-

(a) This Court appoints Mr.Naveen KumarMurthy, Advocate, having office at S2, 2nd Floor,Singapore Plaza, No.164, New No.337, Linghy ChettyStreet, Chennai – 600 001, Mobile No.:9884740424,as

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