2017 Supreme(SC) 1008

SUPREME COURT OF INDIA
R. Banumathi, Kurian Joseph, JJ.
M/s. Duro Felguera, S.A. – Appellant
Versus
M/s. Gangavaram Port Limited – Respondents
Arbitration Petition No.30 of 2016 With Arbitration Petition No.31 of 2016 T.C.(C) Nos.25 of 2017, 26 of 2017, 27 of 2017 and 28 of 2017.
Decided On : 10-10-2017

IMPORTANT POINTS
2015 Amendment Act inserting section 11(6A) minimizes Court’s intervention in the matter of appointment of arbitration tribunals.
Now the court has only to see whether there is an existing arbitration clause/agreement.

Headnote:Per R. Bhanumathi, J.

       (a) Arbitration and Conciliation Act, 1996 – Section 11(6A) (as amended in 2015), and 11(7) – Supreme Court or the High Court or any person or institution designated by such Court to appoint arbitrator after seeing that an arbitration agreement exists – Such appointment is not appealable – All preliminary issues left for the arbitral tribunal to decide – Instantly, disputes arising in 2016 – Governed by amended section 11(6A). (Para 17, 18, 19)

       (2000) 7 SCC 201; (2002) 2 SCC 388; (2005) 8 SCC 618; (2009) 1 SCC 267; (2007) 4 SCC 599; (2013) 15 SCC 414 – Referred

       (b) Arbitration and Conciliation Act, 1996 – Section 11(6A) – Original Package No.4 TD split into five different Packages-New Package No. 4 and Packages No. 6, 7, 8 and 9 – All these containing different works and conditions and arbitration clauses – Cannot be said to be covered collectively nu original package no. 4. (Para 21, 24)

       (c) Arbitration and Conciliation Act, 1996 – Section 11(6A) – Corporate guarantee – Guaranteeing due performance of all the works in all the five packages – Having its own separate and distinct arbitration clause – Can be invoked on breach of any of the packages – Composite reference of International Commercial Arbitration cannot be contended by virtue of the \corporate Guarantee – Corporate Guarantee cannot supersede the five split-up contracts and the special conditions of contract thereon. (Para 25, 28,

       (d) Arbitration and Conciliation Act, 1996 – Section 7(5) – Arbitration clause contained in another document whether part of contract – May have to be ascertained by reference to more than one document – Original Package No.4 Tender Document referred in the MoU only to have more clarity on technical and execution related matters – Not intended to be incorporated in it, more so when MoU does not contain any arbitration agreement of its own. (Para 33, 35)

       (2009) 7 SCC 696 – Relied upon

       (e) Arbitration and Conciliation Act, 1996 – Section 11(6A) – Five separate contracts each having independent existence with separate arbitration clauses – There cannot be a single arbitral tribunal for "International Commercial Arbitration". (Para 36)

       Interpretation of statute – A concession by a party going against specific provisions and specific mandate of legislature – Cannot be accepted. (Para 37)

       Per Kurian, J. (Concurring)

       (f) Arbitration and Conciliation Act, 1996 – Section 11(6A) and section 7(5) – Six different contracts – Five for works and one for Corporate Guarantee – Each containing its own arbitration clause – MoU referring to the five agreements in order only to have more clarity on technical and execution related matters – No novation by substitution or merger of the five agreements (Para 46, 47, 48)

       (2009) 7 SCC 696 – Relied upon

       (g) Administration of justice – Agreement – Parties can agree as per their convenience – But once the agreement is in writing, it can be resiled form only in accordance with law. (Para 51)

       (h) Arbitration and Conciliation act, 1996 – Section 11(6A) – Wide powers of the Court u/s 11(6) restricted by 2015 amendment inserting section 11(6A) minimizing Court’s intervention – Now all that the Courts need to see is whether an arbitration agreement exists - nothing more, nothing less – Instantly, as there are six agreements, there have to be six arbitration tribunals: two for international commercial arbitration and four for the domestic arbitration. (Para 55, 56)

       (2005) 8 SCC 618; (2000) 7 SCC 201; (2002) 2 SCC 388; (2009) 1 SCC 267 – Referred

       Facts of the case:

       Arbitration Petition No.30 of 2016 has been filed by M/s Duro Felguera, S.A. under Section 11(6)(a) read with Sectiion 11(12)(a) of the Arbitration and Conciliation Act, 1996 to appoint the nominee arbitrator on behalf of the respondent (second arbitrator) in terms of sub-clause 20.6 of the Special Conditions of the Contract with respect to the arbitration arising under the Contract dated 10.05.2012.

       T.C. No.25 of 2017, T.C. No.26 of 2017, T.C. No.27 of 2017 and T.C. No.28 of 2017 have been filed by M/s. Felguera Gruas India Private Limited for appointment of Domestic Arbitral Tribunal for resolving the dispute pertaining to the contract awarded to FGI.

       Arbitration Petition No.31 of 2016 has been filed by M/s. Gangavaram Port Limited to appoint an arbitrator under the Memorandum of Understanding (MoU) dated 11.08.2012 and to constitute a single Arbitral Tribunal by a composite reference for adjudication of all the disputes between the parties in connection with the "Works" covered under all the five Package Contracts and the Corporate Guarantee dated 17.03.2012 executed by Duro Felguera.

       Finding of the Court:

       There have to be six arbitration tribunals.

       Result: Arbitration Petition No. 30 of 2016 allowed; Arbitration Petition No.31 of 2016 disposed of. Transfer Case No. 25/2017, Transfer Case No. 26/2017, Transfer Case No. 27/2017 and Transfer Case No. 28/2017 disposed of.

       Arbitration tribunals appointed.