Multiform Machinery (Bom.) Pvt. ... vs Deepak Industries Ltd.
2003 Latest Caselaw 1099 Bom

JUDGMENT

S.K. Shah, J.

1. Heard the learned counsel on both sides.

2. This is an application under Section 11 of the Arbitration and Conciliation Act, seeking an appointment of the Arbitrator. There is Arbitration clause, being at Item No. 16 of the agreement. In the terms and conditions of the contract, which speaks for referring the matter to the Arbitrator, in case any dispute arises out of the agreement between the parties and it remains unresolved after notice.

3. What is agreed upon by the parties is that the appointment shall be of two Arbitrators, one to be nominated by each of the parties.

4. In reply, the respondents have vehemently objected to the maintainability of this application under Section 11 of the Act, particularly, on the ground that the respondents have already filed suit in the Court of Civil Judge, Senior Division in Calcutta and the petitioners have appeared in that suit and filed application under Section 8 of the Arbitration and Conciliation Act, 1996, seeking appointment of Arbitrator. The further objection, which is submitted by the learned counsel for the respondents, is that the petitioners, instead of approaching the said Civil Court, have come to this Court by making an application under Section 11 of the Act. The next objection is that of the jurisdiction of the Court under Section 42 of the Arbitration and Conciliation Act.

5. A plain reading of the Section 42 of the Arbitration Act shows that there is bar of jurisdiction of a Court, a latter Court, if an application under this part has been made in a Court that Court shall have jurisdiction over the Arbitration proceedings and all subsequent applications arising out of that application and the Arbitral proceedings, shall be made in that Court and not in any other Court. It is apparent that what the provisions of Section 42 speaks of is bar of the jurisdiction of the latter Court.

6. The petition, however, filed in here is under Section 11, by making an application for an appointment of Arbitrator. The question is whether the jurisdiction under Section 11 is also barred.

7. Section 11 contemplates making of an application for appointment of Arbitrator to the Chief Justice or his designate and not to the Court, as has been held by the Apex Court in various judgments that while dealing with applications under Section 11 of the Act, the duty performed is not as Court of law, but it is an administrative function. In this view of the matter, in my view, Section 42 does not bar the jurisdiction of this Court while dealing with applications made under Section 11 of the Act.

8. It is further necessary to see whether any order is passed in the suit. It is, however, apparent that before filing any written statement, the petitioners have filed application under Section 8 in the said suit, filed by the respondents, requesting the Court to appoint Arbitrator, on the basis of an agreement between the parties. As such, the petitioners have filed application under Section 8 before making any statement of substance of the dispute.

9. Under these circumstances, the application deserves to be allowed. Hence, the order :

(a) The application is allowed.

(b) Each party shall appoint its own Arbitrator within a period of six weeks from the date of this order. Thereafter, the two Arbitrators shall appoint the presiding Arbitrator within the next four weeks, to resolve dispute between the parties.

(c) The application is accordingly disposed of.

(d) Ordinary copy of this order be supplied to the parties, duly authenticated by the Associate of this Court.