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2025 Supreme(Mad) 3523
IN THE HIGH COURT OF JUDICATURE AT MADRAS
P.B.Balaji, J.
Dr. Viswanthan Viswabaskaran - Petitioner
Versus
Resurgen Innovations Private Limited - Respondent
Arb.O.P.(Comm.Div.) No.383 of 2024
Decided On : 17-02-2025
Advocate Appeared:
For the Petitioner: Mr.V.Ramamurthy, for Mr.M.Anbalagan
For the Respondent: Mr.R.Pushkar
The court ruled that a petition for appointing an arbitrator must be filed under Section 11(5) when no procedure is agreed upon, and jurisdiction lies where the cause of action arose.
Headnote:(A) Arbitration and Conciliation Act, 1996 - Section 11(6) - Appointment of Arbitrator - Petition filed seeking appointment of a sole Arbitrator under Section 11(6) was dismissed as the proper provision was Section 11(5) due to lack of agreement on appointment procedure - Jurisdiction of the court was also questioned as the entire cause of action arose in Gujarat, not Tamil Nadu. (Paras 1, 6, 18, 21)
(B) Jurisdiction - The court held that it lacked jurisdiction to entertain the petition as the seat of arbitration was determined to be Ahmedabad, where the agreements were executed and the business was located. (Paras 18, 21)
Facts of the case:
The petitioner sought the appointment of an Arbitrator under Section 11(6) of the Act regarding disputes arising from a Memorandum of Understanding and a Deed of Partnership, both executed in Gujarat. The respondent contested the jurisdiction and the applicability of Section 11(6).
Findings of Court:
The court found that the petition was not maintainable under Section 11(6) and that the jurisdiction lay in Gujarat, not Chennai.
Issues: The main issues were whether the petition was maintainable under Section 11(6) and the jurisdiction of the court to entertain the petition.
Ratio Decidendi: The court ruled that the petition should have been filed under Section 11(5) due to the absence of an agreed procedure for appointing an Arbitrator, and that jurisdiction was properly located in Gujarat.
Result: Petition dismissed.
| Table of Content |
|---|
| 1. counsel for the petitioner (Para 3 , 4 , 5) |
| 2. counsel for the respondent (Para 6) |
| 3. entire cause of action arose (Para 7 , 8 , 9 , 10) |
| 4. arbitration agreement between parties (Para 11 , 12 , 13 , 14) |
| 5. difference between section 11(5) and 11(6) (Para 15 , 16 , 17 , 18 , 19 , 20) |
| 6. court lacks jurisdiction (Para 21 , 22) |
ORDER :
P.B.Balaji, J.
This original petition has been filed under section 11(6) of the Arbitration and Conciliation Act, 1996 seeking appointment of a sole Arbitrator to resolve the disputes between the petitioner and respondent in respect of a Memorandum of Understanding (MOU) dated 19.04.2022 and deed of partition dated 19.04.2022.
2. I have heard Mr.V.Ramamurthy for Mr.M.Anbazhagan, learned counsel for the petitioner and Mr.R.Pushkar, learned counsel for the respondent.
3. The learned counsel for the petitioner would submit that the parties entered into a Memorandum of Understanding and also a Deed of partnership on the same day viz.,19.04.2022. Both the MOU as well as the Deed of partnership contained separate and valid arbitration clauses and the petitioner has invoked the said Arbitration clauses and suggested names of nominees to be appointed as sole Arbitrator, in and by a notice dated 05.08.2024 under Section 21 of the Arbitration and Conciliation Act, 1996 .. However, the respondent by notice dated 07.08.2024 invoking the arbitration clause in the MoU and the Partnership deed both dated 19.04.2022 nominated three names, giving an option to the respondent to choose from amongst the three names.
4. On receipt of the notice issued by the petitioner dated 07.08.2024, the respondent has also sent a reply notice dated 13.08.2024 refusing to accept the names proposed by the petitioner and stating that it is only the Courts in Ahmedabad, State of Gujarat that have jurisdiction and not the Courts in Chennai. It was also pointed out by the respondent in the said reply notice that the invocation of Section 11(6) of the Act was improper. Thereafter the petitioner has still chosen to prefer the above Arbitration Original Petition invoking section 11(6) of the Act.
5. The learned counsel for the petitioner would submit that though the MoU and the partnership deed was entered into only in Gujarat and the respondent also carries on business in Gujarat, part cause of action arose in Chennai, where according to the petitioner the production unit of the petitioner is situated and therefore, the learned counsel for the petitioner would submit that the petition is maintainable before this Court. Insofar as invocation of Section 11(6) of the Act, the learned counsel for the petitioner would submit that it is only a technical objection and since anyway the parties will have to go for Arbitration to resolve their disputes, invocation of a wrong provision of law should not be put against the petitioner. He would therefore pray for the petition being allowed.
6. Per contra, the learned counsel for the respondent would submit that, the entire cause of action arose only in the State of Gujarat and no part of cause of action has arisen within the state of Tamil Nadu, more specifically the city of Chennai as claimed by the petitioner. The learned counsel for the respondent would also submit that there is a huge difference between invocation of Section 11(5) and 11(6) of the Act, and on the preliminary objection regarding maintainability of the Original Petition under section 11(6) of the Act, the learned counsel for the respondent seeks for dismissal of the original petition itself.
7. In this regard he would place reliance of the Hon'ble Supreme Court in Swadesh Kumar Agarwal vs Dinesh Kumar Agarwal and ors, reported in (2022) 10 SCC 235 . He would also rely on the decision of the Kerala High Court in Tulsi Developers India Private Limited vs Doctor Appu Benny Thomas , reported in 2021:KER:24896 .
8. For bringing out the difference between Section 11(5) and 11(6) of the Act, he would next rely on the decision of the Hon
