Withdrawal of a civil suit does not constitute waiver of rights to invoke arbitration; an arbitration agreement remains valid.

ORAL JUDGEMENT

1. This is a petition filed under Section 11 of the Arbitration and Conciliation Act,1996 (for short 'the Act') whereby the petitioner has prayed for appointment of an arbitral tribunal to adjudicate the disputes and differences between the parties under the Agreement dated 13 March 2015. The arbitration agreement is contained in Clause No.13.1 of the said agreement which reads thus:-

“13. Dispute Resolution

13.1 If any dispute or difference of any kind whatsoever (“Dispute”) shall arise between the parties in connection with or arising out of this Agreement or out of the breach, termination or invalidity of the Agreement hereof, the Parties shall resolve them by resort to the following in the order so mentioned:

(a) Parties shall attempt for a period of 30 days after receipt of notice by the other Party of the existence of a Dispute to settle such Dispute in the first instance by mutual discussions between the parties.

(b) In the event of such differences between the parties failing settlement through mutual discussions amongst Parties concerned within one month, any Party may by a written notice of 30 days to the other Party or Parties refer the dispute for arbitration. The party having a grievance shall appoint an arbitrator of his own choice and serve a notice on the other party asking them to appoint an arbitrator of their choice within 30 days. The appointed arbitrators shall then appoint a Presiding Arbitrator.

(c) The arbitration proceedings shall be held in accordance with the provisions of the Arbitration and Conciliation Act,1996 or any statutory modification or re-enactment thereof. The arbitration proceedings shall be conducted in the English Language and the venue of the arbitration shall be Pune and the cost of arbitration proceeding would equally be shared by both the parties unless decided otherwise by the arbitration pursuant to award of Arbitration.

(d) Courts in Pune shall have exclusive jurisdiction in respect of any dispute arising under this Agreement.”

2. There is no dispute on the existence of the arbitration agreement. Respondents have appeared and have also filed a reply affidavit. The principal objection as urged on behalf of the respondents is that the petitioner had earlier approached the Court of Civil Judge, Jr. Division at Pune, by filing Special Civil Suit No.760 of 2018 interalia against the respondent and the Janata Sahakari Bank, Pune. The contention is that once a suit has been filed for the reliefs against the respondent and a third party namely 'Janata Sahakari Bank', who had furnished a bank guarantee on behalf of the petitioner, and as a prayer is made against the respondent in regard to a bill dated 16 February 2018, the present petition filed under Section 11 of the Act would not be maintainable. The petitioner has waived its rights for an arbitration and/or to invoke the arbitration agreement.

3. The second objection although vaguely raised in paragraph 7 of the reply affidavit is on the agreement in question being not adequately stamped. In paragraph 7 of the reply, following averments are made in this regard:-

“7. Without prejudice to the above, the Respondent submits that the Power Supply Facilitation Agreement dated 13th March,2015 under which appointment of an arbitrator is sought is insufficiently stamped in view of which the reliefs as sought by the Petitioner ought not to be granted.”

4. Learned Counsel for the respondent has however not disputed that the respondent is yet to appear in the suit, although summons has been issued. Learned Counsel for the petitioner would submit that the summons was dispatched but was returned 'unclaimed'.

5. Learned Counsel for the petitioner referring to the provisions