* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ Arb. Appln. No. 260/2008
% Date of Decision: February 12, 2009
# M/s. Shiva & Co. ..... Petitioner
! Through: Mr. C. Mukund, Advocate
Versus
$ M/s Impetus Technologies
.....Respondent
^ Through: Mr. D.P. Bhatia, Advocate CORAM: HON'BLE MR. JUSTICE S.N. AGGARWAL
1. Whether reporters of Local paper may be allowed to see the judgment?
2. To be referred to the reporter or not?
3. Whether the judgment should be reported in the Digest?
S.N.AGGARWAL, J (ORAL) This is a petition filed by the petitioner seeking appointment of an Arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996.
2 Briefly stated the facts of the case are that the petitioner is dealing in the business of out sourcing and marketing including tele-marketing and customer supports of its clients worldwide. The Arb. Appln. No.260/2008 Page 1 of 9 respondent approached the petitioner with an intention to utilize the services of the petitioner for generating leads and the parties pursuant to negotiations held between them entered into a Call Centre Services Agreement on 12.10.2006 whereby the respondent agreed to take the services of the petitioner on the terms and conditions contained in the said agreement. The said Call Centre Services Agreement contained an arbitration clause being Clause 18 for resolution of disputes between the parties under the Agreement. Clause 18 contained in the Agreement is extracted below:-
"18 DISPUTE RESOLUTION 18.1Through negotiation amongst senior level managers of SHIVA and IMPETUS, the parties shall mutually and in good faith attempt to resolve any dispute, controversy, or claim between them within 30 days after the initiation of such informal proceedings without resorting to formal proceedings. The dispute resolution process shall be initiated by a party through written notice of the dispute being delivered to the other party. 18.2 In the even that the dispute is not resolved to the mutual satisfaction of the parties within 30 days after the commencement of the informal process of Arb. Appln. No.260/2008 Page 2 of 9 consultation, either SHIVA or IMPETUS has the right to submit the dispute to binding arbitration. Any such submission shall be made within 30 days from the conclusion of the above referenced 30 day period. Failure to make such submission shall extinguish the right to such dispute being resolved by arbitration under this agreement.
18.2.1 In the event that arbitration is selected by the parties, disputes between SHIVA and IMPETUS concerning this agreement shall be finally settled by arbitration proceedings to be held in Delhi, through a sole arbitrator.
18.2.2 Within 30 days after the conclusion of the arbitrator's hearing the arbitrator shall render the decision reached along with the reasons in support of the decision. The award of the arbitrator shall be final and bginding upon the parties; and judgment upon such award may be entered in any court having jurisdiction, or application may be made to such court for judicial acceptance of the award and an order of enforcement, as the Law of such jurisdiction may require or allow, The parties agree that they will participate in the arbitration in Arb. Appln. No.260/2008 Page 3 of 9 good faith.
18.2.3 During the course of the arbitration, the parties shall continue to carry out the terms of the agreement including the disputed provision, unless the dispute goes to the essence of that provision and, thereby, renders continued performance unlawful not possible or impracticable."
3 The disputes arose between the parties under the Call Centre Services Agreement dated 12.10.2006. The petitioner sent a legal notice dated 29.12.2007 to the respondent and again on 16.02.2008 calling upon the respondent to appoint an Arbitrator to decide the disputes that have arisen between the parties. The respondent in reply to said notices vide its reply dated 23.06.2008 took a stand that no arbitrable dispute remain between the parties because according to the respondent entire money payable to the plaintiff under the contract stands already paid to it. Since the respondent refused to appoint an arbitrator in terms of arbitration agreement despite service of notice demanding arbitration, the petitioner filed the present petition under Section 11 of the Act seeking appointment of an arbitrator by the Court for deciding the dispute between the parties under the contract in question. 4 Mr. Bhatia, learned counsel appearing on behalf of the Arb. Appln. No.260/2008 Page 4 of 9 respondent has opposed appointment of arbitrator on two grounds, one according to him, the Call Centre Services Agreement dated 12.10.2006 contains certain interpolations due to which the entire agreement is vitiated and for that reason the arbitration clause contained in the said contract cannot be given effect to. The other argument advanced by Mr. Bhatia is that since the respondent has made the entire payment due to the petitioner under the contract, no arbitrable dispute is left which need to be decided by the Arbitrator in terms of the arbitration agreement contained in the Call Centre Services Agreement dated 12.10.2006 referred hereinabove.
5 Mr. C. Mukund, learned counsel appearing on behalf of the petitioner has contended that even the submissions made by the counsel for the respondent show that there is dispute between the parties under the Call Centre Services Agreement dated 12.10.2006 regarding payment and according to the learned counsel, the said dispute can be decided only by the Arbitrator since the parties had agreed to get their dispute resolved through the process of arbitration. Learned counsel appearing on behalf of the petitioner has argued that the Call Centre Services Agreement dated 12.10.2006 does not contain any interpolation as alleged by the Arb. Appln. No.260/2008 Page 5 of 9 counsel for the respondent and according to him, the Call Centre Services Agreement dated 12.10.2006 was even acted upon by the respondent. He has supported his said contention placing reliance on the submissions of the counsel for the respondent that the payments under the contract have been made to the petitioner. He therefore requests that the disputes that have arisen between the parties under the Call Centre Services Agreement dated 12.10.2006 may be got decided through the process of arbitration in terms of clause 18 contained in the said agreement.
6 I have given my anxious consideration to the above rival arguments advanced by the counsel for the parties and have also perused the arbitration clause contained under the contract between the parties. The first question that arises for consideration is the effect of 30 days time mentioned in Clause 18.2 for making a reference of dispute to the Arbitrator failing which the right for submission of dispute to the arbitration was to be treated as extinguished under the agreement. It appears on a reading of the arbitration clause contained in the contract referred hereinabove that the parties had agreed to refer the dispute under the contract for decision to the Arbitrator within 30 days after the commencement of informal process of consultation for mutual Arb. Appln. No.260/2008 Page 6 of 9 settlement of dispute. The contract between the parties clearly stipulate that in case the reference is not made within 30 days period then the right to submit the dispute to Arbitrator shall stands extinguished.
7 Mr. C. Mukund, learned counsel appearing on behalf of the petitioner has relied upon two judgments of the Hon'ble Supreme Court in Food Corporation of India Vs. New India Assurance Co. Ltd. And Others, (1994) 3 Supreme Court Cases 324 and Nationa Insurance Co. Ltd. Vs. Sujir Ganesh Nayak & Co. And Another, (1997) 4 Supreme Court Cases 366 and one judgment of Punjab & Haryana High Court in Shree Krishna Rice Mills Vs. The Punjab State Co-op. Supply and Marketing Federation Ltd., 2003(3) ARBLR565(P&H). In all these three judgments relied upon by the counsel for the petitioner, it has been held that the parties by agreement cannot shorten the period of limitation provided by law for availing their legal remedies for enforcement of right that accrues in their favour. In Shree Krishna Rice Mills' case (Supra) decided by the Punjab & Haryana High Court, the court was seized of an identical arbitration clause as contained in the present case. In that case, the arbitration clause between the parties provided that in case the parties would fail to Arb. Appln. No.260/2008 Page 7 of 9 refer their dispute for arbitration within one year of arising of the dispute then their right under the contract shall stands extinguished. The same is the position in the arbitration clause contained in the contract between the parties in the present case. It was specifically held by Punjab & Haryana High Court in the abovementioned case that the limitation for filing a petition for appointment of Arbitrator is three years from the date when cause of action for referring the dispute arose in favour of petitioning party. Mr. Bhatia learned counsel appearing on behalf of the respondent could not cite any judgment contrary to the law laid down in the abovementioned three cases relied upon by the counsel for the petitioner. Hence in view of law laid down by the Hon'ble Supreme Court and also by Punjab & Haryana High Court in the abovementioend cases, I am of the view that the arbitration clause 18 contained in the contract between the parties to the extent it curtailed the period of limitation for referring the dispute for arbitration is void and cannot be given effect to. The present petition seeking appointment of the arbitrator has been filed by the petitioner within three years limitation prescribed for the purpose in Article 137 of the Limitation Act, 1963. It is apparent on a reading of the legal notices dated 29.12.2007 and 16.02.2008 sent by the Arb. Appln. No.260/2008 Page 8 of 9 petitioner to the respondent and also the reply of the respondent dated 23.06.2008 that disputes in fact have arisen between the parties under the Call Centre Services Agreement dated 12.10.2006 which have to be decided through the process of arbitration. Hence I hereby appoint Mr. Vijay Gupta, Advocate (Mobile No.9811045388) present in Court as the sole arbitrator for deciding the dispute between the parties in accordance with law. The parties are directed to appear before the learned arbitrator at 4:00 PM on 26.02.2009. The learned arbitrator is requested to decide the disputes as expeditiously as possible. The fees of the learned arbitrator is fixed at Rs. 1 lac to be shared equally by both the parties.
8 In view of the above, this petition stands disposed of.
February 12, 2009 S.N.AGGARWAL
a [JUDGE]
Arb. Appln. No.260/2008 Page 9 of 9