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2023 Supreme(Online)(KER) 7002
HIGH COURT OF KERALA
Devan Ramachandran, J
NINO BROTHERS ENGINEERING
– Appellant
Versus
SHIJI C.C – Respondent
AR 222 2022
PRAVEEN K. JOY, E.S.SANEEJ, T.A.JOY, M.P.UNNIKRISHNAN, M.K.SAMYUKTHA, N.ABHILASH, DEEPU RAJAGOPAL, SANDRA S.KUMAR, RANIYAL NIYADA P.
The court affirmed that the arbitrability of disputes is governed by the Kompetenz-Kompetenz principle and cannot be pre-judged by the court.
Headnote:
Arbitration - Sole Arbitrator Appointment - Arbitration and Conciliation Act Section List - The court addressed the arbitrability of the dispute and confirmed that the appointment of a sole arbitrator was in accordance with the provisions under the Arbitration and Conciliation Act, 1996, establishing the framework for resolving disputes through arbitration.
Fact of the Case:
The petitioners sought the appointment of a sole arbitrator due to disputes arising from an agreement. The respondent opposed the request, claiming that the agreement was never acted upon and that the disputes were criminal rather than contractual.
Finding of the Court:
The court observed that the determination of whether the disputes were arbitrable falls under the Kompetenz-Kompetenz principle, which is recognized in Section 16 of the Arbitration and Conciliation Act. The court could not adjudicate on the merits and decided to appoint an arbitrator.
Issues: Whether the disputes between the parties were arbitrable and the validity of the arbitration agreement.
Ratio Decidendi: The court upheld that it cannot decide on the merits but can appoint an arbitrator to resolve such disputes under the provisions of the Arbitration and Conciliation Act.
Final Decision: The court appointed a sole arbitrator to adjudicate the disputes between the parties.
ORDER
Interestingly, the only ground impelled by the respondent in opposition to the request of the petitioners for appointment of a sole Arbitrator is that Annexure 1 Agreement was never acted upon between the parties. He has a further case that the disputes projected by the petitioners are not arbitrable and that they are more in the realm of criminal jurisprudence, than civil or contractual.
2. It is now well settled, without requirement for reinstatement, that the question whether a dispute is arbitrable or otherwise is one to be left to the Arbitrator under the Kompetenz- Kompetenz principle, which is statutorily entrenched under Section 16 of the Arbitration and Conciliation Act, 1996 (‘Act’ for short). The factual disputations between the parties, as to whether Annexure 1 was acted upon or otherwise, are also matters that will have to engage the attention of the Arbitrator and cannot be decided by this Court, while considering an Arbitration Request.
3. Presumably, being aware of the mind of this Court as afore, the learned counsel for the respondent submitted that if this Court is inclined to allow this Arbitration Request, then all the afore contentions be left open, so that it can be impelled before the learned Arbitrator. He, however, added that, even going by the pleadings on record, it is clear that the Arbitration Agreement was never acted upon and therefore, that this may be allowed to be urged by his client as a preliminary issue before the learned Arbitrator.
4. I have examined Annexure 1, which is the admitted agreement between the parties and Clause 21 thereof enjoins them to subject the disputes or differences to one or more Arbitrators, to be appointed by the disputing party. It is conceded before me that the disputes between the parties arise from the terms of Annexure 1 – albeit with the respondent maintaining that the said agreement was never been acted upon; and it is also expressly admitted and prayed by both sides that only one Arbitrator be appointed. The parties are also ad idem that since Section 12 (5) of the Act proscribes either of the parties from appointing any Arbitrator on their own, they leave it to this Court to make a suitable nomination in terms of law.
In the afore circumstances, this Arbitration Request is allowed in the following manner:
(a) I nominate Adv. Sri.M.K.S. Menon, Menon & Associates, Dd tex World, 3rd Floor, Market Road, Kochi, Ernakulam, Ph:9810240999, as the sole Arbitrator, to adjudicate and resolve the disputes and differences between the parties to this case arising from Annexure 1 agreement.
(b) The Registry is directed to communicate a copy of this order to the learned Arbitrator within a period of two weeks from today and to obtain a Statement of Disclosure from him under Section 11 (8) read with Section 12 (1) of the Arbitration and Conciliation Act, 1996 .
(c) Once the Disclosure Statement is obtained from the learned Arbitrator, the Registry shall release the certified copy of this order, with a copy of the said statement appended to it, retaining the original of the same on the files of this case.
(d) The fees of the Arbitrator shall be governed by the Fourth Schedule of the Arbitration and Conciliation Act, 1996 .
(e) In order to enable the Arbitrator to commence the proceedings without delay, I direct the parties to mark appearance before him at 11 a.m. on 16.09.2023.
I make it reiteratingly clear that this Court has not entered into any of the disputes between the parties on its merits and that all of them are left open to be impelled by them before the learned Arbitrator when the exercise is completed.
Sd/-
DEVAN RAMACHANDRAN JUDGE MC/1.8 APPENDIX OF AR 222/2022 PETITIONER ANNEXURES Annexure 1 TRUE COPY OF THE PARTNERSHIP DEED DATED
23.03.2010 Annexure 2 TRUE COPY OF THE NOTICE ISSUED BY THE PETITIONER TO THE RESPONDENT Annexure 3 TRUE COPY OF THE CMA (ARBITRATION)
NO.354/2022 BEFORE THE COMMERCIAL COURT, ERNAKULAM Annexure 4 TRUE COPY OF THE E-COURT PROCEEDINGS OF
