2000 Supreme(Ori) 258
High Court Of Orissa
P. K. Misra
BINAYAK SAMAL - Appellant
Versus
ORISSA INDUSTRIAL INFRASTRUCTURE DEVELOPMENT CORPORATION - Respondent
M. J. C. 437 Of 1998
Decided On : 08/14/2000
A.TRIPATHY, C.A.RAO, JATINDRA KUMAR MOHAPATRA, S.K.BEHERA
The specific provision in a formal contract barring arbitration may override an arbitration clause in another agreement, leading to the conclusion that the parties did not contemplate any arbitration.
Headnote:
Arbitration - Existence of Arbitration Clause - The court held that the arbitration clause in the Item Rate Agreement was overridden by a provision in the formal contract specifically barring arbitration, thus concluding that the parties did not contemplate any arbitration.
Fact of the Case:
The petitioner filed applications seeking appointment of an arbitrator for disputes arising from three different agreements with the opposite parties, all involving the existence of an arbitration clause.
Finding of the Court:
The court found that the provision in the formal contract specifically barring arbitration overrode the arbitration clause in the Item Rate Agreement, concluding that the parties did not contemplate any arbitration. The applications were dismissed with no orders as to costs.
Issues: Existence of arbitration clause, interpretation of contractual provisions, and whether the parties contemplated arbitration.
Ratio Decidendi: The court held that the provision in the formal contract specifically barring arbitration prevailed over the arbitration clause in the Item Rate Agreement, leading to the conclusion that the parties did not contemplate any arbitration.
Final Decision: The applications seeking appointment of an arbitrator were dismissed with no orders as to costs.
P. K. MISRA, J.
( 1 ) THESE three applications under Section 11 of the Arbitration and Conciliation act, 1996, have been filed by the same petitioner against the very same opposite parties seeking for appointment of Arbitrator for deciding the disputes arising between the very same parties relating to three different agreements. Since common question relating to existence of arbitration clause is involved, all the applications are disposed of by this common order.
( 2 ) THE petitioner states that Clause-23 of the Item Rate Agreement, which is a part of the Contract, contains the arbitration clause, whereas according to the opposite parties, the contract does not contain any arbitration clause and as such, no arbitrator should be appointed. Copy of the Agreement dated 6. 4. 1991 between the opposite parties and the petitioner has been filed. Learned counsel for the opposite parties relies upon Article 5 of such Agreement, which is extracted hereunder:-"5. Both the parties agree by mutual consent that any dispute relating to this agreement is barred from arbitration. All problems shall be mutually settled and the decision of the Managing Director, idco shall be final and binding on the contractor. "the learned counsel appearing for the petitioner, however, submits that Article 2 of the aforesaid Agreement refers to "schedule of quantities and rates" as a part of the contract, which contains an arbitration clause. Article 2 is quoted hereunder :"2 The following documents shall be deemed to form and to be read and construed as part of this agreement, viz. : (a) Schedule of quantities and rates -annexure-A; (b) Condition of contract-Annexure-B. "clause 23 of the Item Rate Agreement is extracted hereunder :-"clause 23. Except where otherwise provided in the contract all questions and disputes relating to the meaning of the specifications, designs, drawings, and instructions herein before mentioned and as to the quality of workmanship, or materials used on the work, or as to any other question, claim, right matter, or thing whatsoever, in any way arising out of, or relating to the contract, designs, drawings, specifications, estimates instructions, orders, or these conditions, or otherwise concerning the work or the execution, or failure to execute the same, whether arising during the progress of the work, or after the completion or abandonment thereof shall be referred to the sole arbitration of a Chief general Manager of the Corportion unconnected with the work at any stage nominated by the MANAGING DIRECTOR. If there be no such Chief General manager, it should be referred to the sole arbitration of the MANAGING director. It will be no objection to any such appointment that the arbitrator so appointed is a Corporation Officer. The award of the arbitrator so appointed shall be final, conclusive and binding on all parties to these contract. "
( 3 ) IT is thus clear that Clause-23 of the item Rate Agreement forms a part of the contract between the parties in view of Article-2 of the Agreement dated 6. 4. 1991. However, even then the submission of the learned counsel for the opposite parties to the effect that no arbitration is contemplated is to be accepted. Clause 23 starts with a restrictive clause: "except where otherwise provided in the contract all questions and disputes relating to. . . . " are to be referred to the Arbitrator. Article-5 of the formal contract categorically provides that any dispute relating to this agreement is barred from arbitration. Since Article-5 of the Agreement dated 6. 4. 1991 specifically bars any arbitration. Clause 23 of the Item rate Agreement is to give way to the provision contained in Article-5. Thus, it must be held that the parties did not contemplate any arbitration. In the above view of the matter, it is unnecessary to consider other questions raised by the opposite parties to the effect that there is no dispute and further that the claim is barred by limitation. Since it is held that there