The conduct of the parties and communications exchanged can imply an agreement for arbitration, making it enforceable even in the absence of a specific arbitration clause.

JUDGMENT :

Vineet Saran, J.

This is a petition filed under Section 11 of the Arbitration and Conciliation Act, 1996 (for short “Act, 1996”) for appointment of an arbitrator.

2. The brief facts of this case are that a distribution franchise agreement for "Talcher Electrical Division, Chainpal" was entered into between the licencee-opposite party-Central Electricity Supply Utility of Odisha (for short, ‘CESU’) and the franchise-petitioner-M/s. Enzen Global Solutions Pvt. Ltd. (for short ‘Enzen’). Such agreement was executed on 27.09.2012, which was for a period of five years. A dispute arose between the parties with regard to clause-18 of the agreement relating to “Force Majeure”.

3. The contention of the learned counsel for the petitioner is that since the distribution work could not be commenced by the petitioner between 01.11.2012 and 31.03.2013, which was on account of reasons beyond the control of the petitioner, the petitioner would not be liable to pay the requisite charges under the agreement for the said period. The first communication in this regard was sent by the petitioner to the opposite party on 29.11.2012, which was initially rejected by the opposite party on 13.12.2012. Thereafter, when finally the opposite party-CESU did not agree for waiving the charges for the aforesaid period, the petitioner invoked the dispute resolution clause-17 of the agreement relating to “Governing Law and Dispute Resolution”. When the dispute was not resolved, the parties approached the Odisha Electricity Regulatory Commission (for short, “OERC”). Such claim for resolution of dispute was filed by the petitioner before the OERC on 05.08.2013 under Clause-17.2.4 of the agreement, as well as Section 86(1)(f) and (k) of the Electricity Act, 2003.

4. By order dated 27.08.2013, the OERC refused to entertain the dispute between the petitioner and the opposite party, primarily on the ground that Section 86(1)(f) of the Electricity Act, 2003 relates to the dispute between the licencee and the generating company and not between the licencee and the franchise. Further, OERC opined that even though clause-17.2.4 of the agreement provides for resolution of dispute by the OERC, yet since OERC was not a party to the agreement, it refused to exercise such power of resolution of dispute between the parties, as it lacked such statutory jurisdiction.

5. After the OERC refused to decide the dispute between the parties, Enzen and CESU continued to communicate with each other with regard to amicable settlement of the dispute. Then on 29.12.2015, the opposite party-CESU rejected the claim of the petitioner for “Force Majeure” and demanded payment of the outstanding dues. It was thereafter on 04.01.2016 that the petitioner invoked the arbitration clause and sent notice under Section 21 of the Act, 1996 to the opposite party-CESU. The said notice was responded by the CESU on 22.01.2016, whereby they denied the existence of the arbitration clause and consequently the appointment of an arbitrator. This Arbitration petition has thus been filed under Section 11 of the Act.

6. Heard Shri D.P. Nanda, learned counsel for the petitioner, as well as Shri S.K. Padhi, Senior Counsel appearing along with Shri B.K. Nayak, learned counsel for the opposite party, and perused the record. Pleadings between the parties have been exchanged and by consent of learned counsel for the parties, the petition is taken up for final disposal at the admission stage.

7. The submission of Shri S.K. Padhi, learned Senior Counsel for the opposite party is that since the petitioner distributes electricity, it would be a licencee under the Electricity Act, 2003, and even though there may be no licence granted in favour of the petitioner, yet because it is carrying on the work of distribution of electricity under the agreement, it would automatically be a licencee; thus, the dispute between the petitioner and the opposite party ought to have been treated as a dispute between the two licencees, which th