The referral court under Section 11 of the Arbitration and Conciliation Act must determine the prima facie existence of an arbitration agreement and appoint an arbitrator if satisfied.

ORDER :

(ABDUL QUDDHOSE, J.)

This petition has been filed under Section 11 of the Arbitration and Conciliation Act, 1996 (in short “the Act”) seeking for appointment of an Arbitrator by this Court.

2. A dispute has been raised by the petitioner against the respondent, which arises out of the water supply agreement dated 25.07.2013 and another agreement dated 01.10.2014. At the outset, the learned counsel for the petitioner would submit on instructions that since a proper arbitration invocation notice was not sent as per the provisions of Section 21 of the Act for the agreement dated 01.10.2014, the petitioner will be satisfied if an Arbitrator is appointed by this Court for the dispute arising out of the water supply agreement dated 25.07.2013 alone. However, he seeks liberty for the petitioner to file a fresh petition seeking for appointment of an Arbitrator after issuing a proper invocation notice insofar as the second agreement dated 01.10.2014 is concerned. Therefore, this Court for the present will have to decide only whether the dispute raised by the petitioner arising out of the water supply agreement dated 25.07.2013 is arbitrable or not.

3. The petitioner, as per the agreement dated 25.07.2013, has to supply desalinized water to the respondent. According to the petitioner, the respondent has committed breach of the contract. According to the petitioner, certain sums of money are due and payable by the respondent arising out of the terms and conditions of the agreement dated 25.07.2013, which contains an arbitration clause, and the same is extracted hereunder:-

“20. DISPUTES AND ARBITRATION

20.1. Any differences or disputes arising from the contract or from Contracts regarding its performance shall be settled by an amicable effort on the part of both Parties to the contract. An attempt to arrive at a settlement shall be deemed to have failed as soon as one of the Parties to the contract so notifies the other Party in writing.

If an attempt at settlement has failed, the dispute, controversy or claim shall be finally settled by a Sole Arbitrator appointed by the Chief Executive Officer, Sterlite Copper, Tuticorin, in accordance with the Arbitration & Conciliation Act, 1996. The arbitration proceedings shall be conducted in accordance with the Arbitration & Conciliation Act, 1996. Arbitration shall be conducted in the English language the arbitration award shall be final and binding on both the Parties who shall abide the same. The place of arbitration shall be Tuticorin, Tamil Nadu, India.

Each Party will bear their own expenses with respect to arbitration except for common expenses which shall be shared equally. The Parties will have a right to claim the expenses which shall be decided by the Arbitral Tribunal.

20.2. Performance under the Contract shall be continued during the arbitration proceedings unless otherwise directed by Purchaser in writing or unless the matter is such that the performance cannot be possibly continued until the decision of arbitrators or the umpire, as the case may be, is obtained. No payment due or payable by Purchaser shall be withheld on arbitration proceedings unless it is the subject matter of arbitration.

4. The petitioner has invoked arbitration in accordance with the arbitration clause by issuing notice to the respondent on 10.09.2024, which, according to the petitioner, is as per the provisions of Section 21 of the Act. A reply dated 09.10.2024 has also been received to the said notice and in the said reply, the respondent has disputed the claim of the petitioner, but, at the same time, has chosen to nominate their Arbitrator, who is a former Judge of this Court. Since there was no consensus between the parties for arbitration, the petitioner has filed this petition under Section 11 of the Act seeking for appointment of an Arbitrator by this Court.

5. A counter affidavit has been filed by the respondent raising the following objections:-

a) The claim of the petitioner is hopelessly barred by law o