Nikhil Hasmukh Malkan And 2 Others vs Standard Chartered Investments ...
2021 Latest Caselaw 14461 Bom

                                                                               24.arbap.132.21..doc




                                        IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                                           ORDINARY ORIGINAL CIVIL JURISDICTION
                                          ARBITRATION APPLICATION NO. 132 OF 2021
         Digitally signed by
ANJALI   ANJALI TUSHAR
TUSHAR   ASWALE
         Date: 2021.10.06
ASWALE   18:56:19 +0530




                               Nikhil H. Malkan & Ors                       ..Applicants
                                          Vs.
                               Standard Chartered Investments and
                               Loans (India) Ltd                            ..Respondent


                               Mr.Anand Patwardhan, Jaymala Ostwal i/b JJ Associates, for the
                               Applicants.
                               Mr. Parikshit Desai i/b SNG & Partners, for the Respondent.

                                                                 CORAM:- B. P. COLABAWALLA,J.

DATE :- OCTOBER 5, 2021.

P. C.:

The above application is filed under Section 11 of the

Arbitration and Conciliation Act, 1996 (for short "the Arbitration Act")

seeking an appointment of a Sole Arbitrator to decide the disputes and

differences between the Applicants and the Respondent arising out of

and/or in connection with and/or in relation to the Finance Against

Securities Agreement dated 26th November, 2018. Initially, the learned

counsel appearing on behalf of the Respondent [Standard Chartered

Investments and Loans (India) Ltd] took a preliminary objection that

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this Court would not have territorial jurisdiction under Section 11 of the

Arbitration Act to appoint the Arbitrator. However, after examining the

judgment of the Hon'ble Supreme Court in the case of BGS SGS

SOMA JV v/s NHPC LTD [(2020) 4 SCC 234], the learned counsel

has not pressed this issue before this Court. He has further stated, on

instructions, that without prejudice to the rights and contentions of the

Respondent, Arbitral Tribunal may be constituted.

2 The Arbitration Agreement between the parties can be

found at Clause 38 of the said Finance Against Securities Agreement

dated 26th November, 2018. The said Clause reads as under:-

"38.ARBITRATION

38.1 The parties agree and acknowledge that in case of any dispute or difference arising out of or in connection with this Agreement whether during its subsistence or thereafter between the parties including any dispute or difference relating to the interpretation of the Agreement or any clause thereof shall be settled by arbitration in accordance with the provisions of the Arbitration and Conciliation Act, 1996, or any statutory modifications thereof and shall be referred to a sole arbitrator, to be appointed by Lender.

38.2 Such claims disputes and/or differences shall be referred to arbitration by a sole arbitrator ("Arbitrator") to be appointed by the Lender.

38.3 It is agreed between the parties hereto that nothing contained in Section 17 of the Arbitration and Conciliation Act, 1996 shall in any way, affect the right of, or preclude SCILL to/from seek/seeking such interim relief/s in the Court of competent jurisdiction, including interim reliefs under Section 9 of the Arbitration and Conciliation Act and the Rules framed thereunder. The venue for conducting arbitration proceedings shall be Mumbai, India. The language of arbitration shall be English.

38.4 The award of the Arbitrator shall be a speaking award and shall be final, conclusive and binding on all the parties to the arbitration whether on question of law or fact.

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          38.5         The Borrower and/or the Pledgor agrees, confirms and covenants that

it shall not object to claims arising out of the Loan Balance alone being adjudicated by the Arbitrator in terms of this clause on any grounds. The Borrower and/or the Pledgor agree, confirm and covenant that it shall not dispute the validity of the reference or the award on any ground.

38.6 The Borrower and/or the Pledgor expressly agrees that it shall not contend that SCILL has given up its rights on the Security Interest by reason of SCKILL making a reference to the arbitration for the monetary claim, in case SCILL decides to make a monetary claim only.

38.7 The Borrower and/or the Pledgor agrees and covenants that it shall not raise the fact of notices invoking arbitration or reference to or pendency of arbitration proceedings as a ground of objection/defence in any appropriate forum/court/authority tribunal in respect of claims or when action is taken by the SCILL."

3 There is no dispute between the parties that there is a

binding Arbitration Agreement between the Applicants and the

Respondent.

4 Both parties have agreed that Mr. Karl Shroff, an advocate

of this Court, be appointed as a Sole Arbitrator to decide the disputes

between the parties arising out of the said Finance Against Securities

Agreement dated 26th November, 2018.

5 In view of the aforesaid stand of the parties, the following

order is passed:-

(a) By consent, Mr. Karl Shroff, is hereby appointed to act as a Sole Arbitrator to decide upon the disputes and differences between the Applicants and the Respondent arising out of and/or in connection with and/or in relation to the said

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Finance Against Securities Agreement dated 26 th November, 2018.

(b) A copy of this order will be communicated to the learned Sole Arbitrator by the advocates for the Applicants within a period of one week from today.

(c) The learned Sole Arbitrator is requested to forward his Statement of Disclosure under Section 11 (8) read with Section 12 (1) of the Arbitration Act to the advocates for the Applicants so as to enable them to file the same in the Registry of this Court. The Registry of this Court shall retain the said Statement on the file of this application and a copy of the same shall be furnished by the advocates for the Applicants to the advocates for the Respondent.

(d) The parties shall appear before the learned Sole Arbitrator on such date and at such place as he nominates to obtain appropriate directions in regard to fixing a schedule for completing pleadings etc. The Arbitral Tribunal shall give all further directions with reference to the arbitration and also as to how it is to proceed.

(e) Contact and communication particulars shall be provided by both sides to the learned Sole Arbitrator within a period of one week from today. This information shall include a valid and functional email address as well as mobile numbers of the respective advocates.

(f) The parties have agreed that the Sole Arbitrator will be free to fix his own fees and shall not be governed and/or bound by the 4th Schedule of the Arbitration Act or the Bombay High Court (Fee payable to Arbitrator) Rules, 2018. The parties have further agreed that all arbitral costs and fees of the Arbitrator shall be borne by both sides equally and will be subject to the final Award that may be passed by the Tribunal.

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     (g)    The parties immediately consent to a further extension of

up to six months to complete the Arbitration, should the learned Sole Arbitrator find it necessary.

(h) The parties have agreed that the venue and seat of the arbitration will be in Mumbai.

6 The above Arbitration Application is disposed of in the

aforesaid terms. However, there shall be no order as to costs.

7 This order will be digitally signed by the Private

Secretary/Personal Assistant of this Court. All concerned will act on

production by fax or email of a digitally signed copy of this order.

                                        ( B. P. COLABAWALLA, J. )




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