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2018 Supreme(P&H) 164
IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
S.J. VAZIFDAR, J.
M/s Shalimar Estates Pvt. Ltd. - Petitioner
Versus
Inox Leisure Ltd. - Respondent
Arbitration Case No. 161 of 2016 (O&M)
Decided On : 29-01-2018
For the Petitioner:Mr. Prateek Gupta, Advocate
For the Respondent:Mr. Rohit Khanna, Advocate, for the respondent.
Non-registration of a document is not fatal to an application under section 11 of the Arbitration and Conciliation Act, 1996 for the appointment of an arbitrator.
Headnote:
Arbitration - Appointment of Sole Arbitrator - Arbitration and Conciliation Act, 1996 - Section 11(6) - Lease Deed, EME Usage Agreement - Clause 14.2.1, Clause 12 - Summary of Acts and Sections: The court discussed the arbitration clauses in the lease deed and EME usage agreement, and referred to the Supreme Court judgment in SMS Tea Estates Private Ltd. v. Chandmari Tea Company Private Ltd. to establish that non-registration of a document is not fatal to an application under section 11 of the Act for the appointment of an arbitrator.
Fact of the Case:
The petitioner applied for the appointment of a sole arbitrator under section 11(6) of the Arbitration and Conciliation Act, 1996 for two contracts containing arbitration clauses. Disputes arose between the parties, and the petitioner invoked the arbitration agreements in both contracts.
Finding of the Court:
The court found that the arbitration clause in the lease deed could be relied upon despite non-registration, as established by the Supreme Court judgment in SMS Tea Estates Private Ltd. v. Chandmari Tea Company Private Ltd. The court also dismissed the respondent's reliance on a previous judgment, and appointed a former Judge of the Court as the sole arbitrator.
Issues: The issues included the invocation of arbitration agreements in two contracts, the effect of non-registration of the lease deed, and the appointment of a sole arbitrator.
Ratio Decidendi: The court relied on the principle that non-registration of a document is not fatal to an application under section 11 of the Act for the appointment of an arbitrator, as established by the Supreme Court judgment in SMS Tea Estates Private Ltd. v. Chandmari Tea Company Private Ltd.
Final Decision: The petition was disposed of by appointing a former Judge of the Court as the sole arbitrator to adjudicate upon the disputes and differences between the parties.
S.J. VAZIFDAR, J.
1. This is an application under section 11(6) of the Arbitration and Conciliation Act, 1996 for the appointment of sole arbitrators in respect of two contracts each of which contains an arbitration clause.
2. The parties entered into a lease deed dated 12.02.2009 under which the petitioner leased the premises in favour of the respondent on the terms and conditions contained therein. Clause 14 thereof reads as under:-
“14. GOVERNING LAW & ARBITRATION
14.1. This Deed shall be governed by and construed in accordance with the laws of India.
14.2.1 Any claim, controversy or dispute arising out of or in connection with this Deed, not settled by mutual agreement of the Parties involved within 30 days after a Party is provided written notice for settlement thereof, shall be referred to arbitration to a sole arbitrator jointly appointed by the Parties under the Indian Arbitration and Conciliation Act of 1996. In Arbitration Case No. 161 of 2016 (O&M) the event the Parties are unable to agree upon a sole arbitrator, the claim, controversy or dispute shall be referred to a panel of three arbitrators, one of whom shall be appointed by the Lessee and the other by the Lessor and a third by the aforesaid two arbitrators. Pending the arbitration proceedings, all disputed amount/payments shall be deposited in the custody of the arbitrators, appointed under this clause until the completion of the arbitration proceedings. These disputed amounts/payments held by the arbitrators shall be paid to the Parties as per the provisions of the arbitration award after successful completion of the proceedings.
The arbitration proceedings shall be conducted in Chandigarh, India and shall be governed by and construed in accordance with the laws of India. The language of the arbitration shall be English. The costs and expenses of the arbitrators and holding the arbitration shall initially be borne in equal shares by Lessee and Lessor. Initially, each Party will bear its own legal, traveling and other similar costs. However, the arbitrators may in his/their award, require any Party to pay such costs as the arbitrators think fit, including the costs and expenses of the arbitration, travel, costs and advocates fees.
14.3. During the pendency of the arbitration, the Parties shall continue to discharge their respective obligations under this Deed.”
3. The parties entered into an EME Usage agreement also dated 12.02.2009 under which the petitioner granted the respondent various electro mechanical and other equipment facilities which it intended installing and operating for the benefit of the respondent. Clause 12 thereof reads as under:-
“ARTICLE12-ARBITRATION
12.1. The parties hereto have agreed to amicably settle and/or resolve all disputes and differences arising out of these presents amongst themselves but in the event any dispute of whatsoever nature is incapable of being resolved amongst the parties hereto amicably within 30 days after receipt of notice in such regard from either of the Parties, then in that event the parties have agreed to refer all disputes and differences including effect of any of the terms and conditions herein contained and/or the determination of any right and/or liability and/or in any way touching or concerning these presents to the sole arbitration of an arbitrator to be nominated by the parties hereto and the same would be deemed to be a reference within the meaning of the Arbitration and Conciliation Act 1996 or any statutory modification or enactment thereto for the time being in force. The arbitration proceeding shall be conducted at Chandigarh and the language shall be English only. This Agreement is subject to the jurisdiction at Panchkula.”
4. Disputes and differences having arisen between the parties, the petitioner by a letter dated 14.06.2016 invoked the arbitration agreements in respect of both the contracts.
5. The respondents firstly submit that the petitioner invoked the arbitration clause only in respec
