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2012 Supreme(SC) 2532

SUPREME COURT OF INDIA
Surinder Singh Nijjar, J.
Lufthansa German Airlines - Applicant
Versus
Airport Auth, of India - Non-applicant
Arbitration Petn. No. 15 of 2011.
Decided On : 15-2-2012

Advocates Appeared:
For Petitioner (s):- H.L. Tikku, Sr.Adv., Ashwani Kumar, Yeshmeet Kaur, Advocates.
For Respondent (s):- Atul Nanda, Sr.Adv., Rameeza Hakeem, Rajat Brar, Law Associates and Co.

Headnote:

Arbitration and Conciliation Act, 1996 - Section 11(6) - Chief Justice of India Scheme, 1996 – Constitution of India - Article 8(1), 9. 10 - Appointment of a sole Arbitrator - learned senior counsel points out that under Article 8(1) proviso of the Agreement, the respondent - Authority was to assume liability for damages/losses which are proved to have occurred while the Cargo was in the Authoritys custody and care and while discharging the functions for and on behalf of the Cargo Handling Company under Agreement - Authoritys liability in such cases is restricted to the terms of the Airways Bill and under no circumstances shall exceed the liability of Cargo as enshrined in the Airway Bill. According to the applicant, 15 packages of Cargo were booked with the Authority for delivery - It is claimed that one of the packages was damaged and was not shipped for delivery to Frankfurt till later. In these proceedings, it is not necessary for me to opine as to which party is responsible for the damage – Held, Respondent has admittedly failed to appoint an Arbitrator within the stipulated period. The claim made by the applicant and the grounds taken by the respondents clearly give rise to disputes that are prima facie arbitrable - Disputes raised by the petitioner are therefore required to be referred to arbitration. Consequently, in terms of the Arbitration Clause, this Court is required to make the appointment of the sole arbitrator - It is made clear that all issues raised by the petitioners and the respondents in their respective pleadings are specifically kept open - Parties shall also be at liberty to raise any further/additional issues before the Sole Arbitrator. Undoubtedly, the learned Sole Arbitrator shall decide all the disputes arising between the parties without being influenced by any prima facie opinion expressed in this order, with respect to the respective claim of the parties. The Sole Arbitrator is also at liberty to fix the venue of the Arbitration at his sole discretion - Registry is directed to communicate this order to Justice so sole Arbitrator can expeditiously enter upon the arbitration - Parties are directed to appear before Justice learned Arbitrator - Arbitration Petition is disposed of accordingly

ORDER :

Surinder Singh Nijjar, J. - I have heard learned senior counsel for the parties.

2. This is a petition under Section 11(6) of the Arbitration and Conciliation Act, 1996 read with paragraph 2 of the Appointment of the Arbitrators by the Chief Justice of India Scheme, 1996 for appointment of a sole Arbitrator for deciding the dispute which has arisen between the parties.

3. The applicant Company, originally incorporated in Germany with its head office at Von Gablenz Street 2-6, 50679, Cologne, Germany, and having its place of business in India at 12th Floor, DLF Building No. 10, Tower B, DLF City, Phase II, Gurgaon. The parties have admittedly entered into an agreement, dated 1.12.2005 for the respondent to provide Cargo Handling Services to the applicant.

4. Mr. Tikku, learned senior counsel points out that under Article 8(1) proviso of the Agreement, the respondent - Authority was to assume liability for damages/losses which are proved to have occurred while the Cargo was in the Authority's custody and care and while discharging the functions for and on behalf of the Cargo Handling Company under the Agreement. The Authority's liability in such cases is restricted to the terms of the Airways Bill and under no circumstances shall exceed the liability of Cargo as enshrined in the Airway Bill. According to the applicant, 15 packages of Cargo were booked with the Authority at New Delhi for delivery at Frankfurt. It is claimed that one of the packages was damaged and was not shipped for delivery to Frankfurt till later. In these proceedings, it is not necessary for me to opine as to which party is responsible for the damage. Suffice it to notice that the consignor made a claim on the applicant for damage to the machinery which was contained in the package which was subsequently delivered. Mr. Tikku, points out that the claim was ultimately settled by the applicant for US Dollar 51,720. Upon settlement of the claim, the applicant sought reimbursement of the same from the respondents by letter dated 15.9.2008. This letter was responded to by the applicant on 30.1.2009. It is pointed out that the damage report of 01/15 packages pertaining to the subject consignment of the claimant was received from M/s. Siddhartha Logistics Company Pvt. Ltd., through letter dated 22.7.2005. Upon receipt of the letter, the respondent had requested the aforesaid firm to furnish the relevant information/documents pertaining to the consignment which was allegedly damaged. However, the required information had not been supplied to the respondent. It was also pointed out that on non-receipt of the documents, the respondent - Authority was unable to process the case further. Thereafter, the respondent only received the request from the applicant for payment of US Dollar 51,720 as reimbursement.

5. Mr. Atul Nanda, learned senior counsel appearing for the non applicant, therefore, points out that the petition ought to be dismissed on the ground of limitation itself. He further points out that the matter cannot be referred to the Arbitrator in view of the specific grounds pleaded in the counter affidavit. According to the learned senior counsel, the petition is an abuse of the process of Court.

6. I have considered the submissions made by the learned senior counsel. The Arbitration Clause, which is contained in Articles 9 and 10 are as under:

    ARTICLE 9: ARBITRATION

    9. Any dispute or claim concerning the scope, meaning, construction or effect of this agreement or arising there from shall be referred to any finally settled by arbitration in accordance with the procedures set forth below and if necessary, judgment on the award rendered may be entered in any court having jurisdiction there of;

    (1) The parties agree to the appointment of a single arbitrator the arbitral tribunal shall consist of him alone. The arbitrator may be appointed either directly by the parties or, at their request by the International Chamber of Commerce.

    (2) If they do not so agree to the a

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