* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of Judgment:25.05.2012
+ C.R.P. 95/2011 & CM No. 13492/2011
ML RAVIKRISHNA & ANR ..... Petitioner
Through Mr. Chandra Prakash, Adv.
versus
SUNEJA SONS ..... Respondent
Through Mr. Vikas Dutta, Adv.
CORAM:
HON'BLE MS. JUSTICE INDERMEET KAUR
INDERMEET KAUR, J. (Oral)
1 Impugned order is dated 09.03.2011; the application filed by the petitioner/defendant under Section 8 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the 'said Act') seeking a stay of the suit had been dismissed.
2 Record shows that the present suit has been filed for recovery of Rs.14,18,038/-; a sum of Rs. 11,62,327/- is the principal amount. Contention is that the defendant had failed to pay these amounts which were due and payable to the plaintiff. In the course of the proceedings, the present application under Section 8 of the said Act was filed; attention has been drawn to invoice dated 17.03.2009 (page 40 of the CRP No.95/2011 Page 1 of 4 paper book); clause 3 & 4 have been highlighted; clause 4 which is relevant reads herein as under:-
"In case of any dispute, the judgment of the arbitrator or tribunal appointed by the Paper Merchants Association Delhi will be final and finding on both the parties as governed by the rules of the association." 3 Contention of the petitioner being that this was an arbitration clause which had been entered into between the parties and as such the present suit was not maintainable.
4 This submission was repelled by the impugned order and rightly so. The suit amount as noted supra is a principal amount of Rs.11,62,327/- and even presuming that this payment is covered by the arbitration clause, it is only the amount of Rs.6,62,327/-; the balance amount of Rs.5,00,000/- which has been claimed by the plaintiff in his plaint relates to a security amount which had been paid by the plaintiff to the defendant which amount was initially Rs.10,00,000/- of which Rs.5,00,000/- have been refunded but the balance sum was yet to be paid and this has been specifically mentioned in para 10 of the plaint. Admittedly this amount is not encompassed in this document at page 40 of the paper book. Even presuming that document at page 40 contains an CRP No.95/2011 Page 2 of 4 arbitration clause since this dispute would be outside the scope of this clause in view of the judgment of the Apex Court reported as AIR 2003 SC 252 Sukanya Holdings Pvt. Ltd. Vs. Jayesh H. Pandya and Another. It is clear that the two claims cannot be bifurcated and as such Section 8 of the said Act would not be attracted. Unless the entire subject matter of the suit is the subject matter of the arbitration agreement, Section 8 would not be attracted.
5 That apart, the second submission of the learned counsel for the respondent also has force. He has placed reliance upon a judgment of the Apex Court reported in (2011) 7 SCC 406 State of Orissa and Others Vs. Bhagyadhar Dash to support his submission that the clause relied upon and referred to supra is not really an arbitration clause; it is only an intent to make reference of the dispute to the arbitration and this submission is amply fortified by the fact that the parties had agreed that in case of any dispute, they will appear before the Arbitrator to be appointed by Paper Merchants Association according to the rules of the said Association.
6 In this background, the observations of the Apex Court in the judgment of Bhagyadhar Dash (supra) are relevant; they read as under:- CRP No.95/2011 Page 3 of 4 "(iv) But mere use of the word 'arbitration' or 'arbitrator' in a clause will not make it an arbitration agreement, if it requires or contemplates a further or fresh consent of the parties for reference to arbitration. For example, use of words such as "parties can, if they so desire, refer their disputes to arbitration" or "in the event of any dispute, the parties may also agree to refer the same to arbitration" or "if any disputes arise between the parties, they should consider settlement by arbitration" in a clause relating to settlement of disputes, indicate that the clause is not intended to be an arbitration agreement. Similarly, a clause which states that "if the parties so decide, the disputes shall be referred to arbitration" or "any disputes between parties, if they so agree, shall be referred to arbitration" is not an arbitration agreement. Such clauses merely indicate a desire or hope to have the disputes settled by arbitration, or a tentative arrangement to explore arbitration as a mode of settlement if and when a dispute arises. Such clauses require the parties to arrive at a further agreement to go to arbitration, as and when the disputes arise. Any agreement or clause in an agreement requiring or contemplating a further consent or consensus before a reference to arbitration, is not an arbitration agreement, but an agreement to enter into an arbitration agreement in future."
7 Thus on both scores the submissions of the petitioner were rightly rejected. Petition is without any merit. Dismissed.
INDERMEET KAUR, J
MAY 25, 2012
A
CRP No.95/2011 Page 4 of 4