M/S Sadbhav Engineering Limited, ... vs M/S Western Coalfields Limited, ...
2023 Latest Caselaw 4016 Bom

                                                        1                             905.MCA.543-22 & ORS..odt




               IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                         NAGPUR BENCH AT NAGPUR

                     MISC. CIVIL APPLICATION NO. 543 OF 2022
                              ( Shri Sunil Kumar Jindal
                                          Vs.
                                   Union of India )
                                        WITH
                      MISC. CIVIL APPLICATION NO. 10 OF 2022
                         ( M/s Sadbhav Engineering Limited
                                         Vs.
                       M/s. Western Coalfields Limited & Anr. )
                                       WITH
                      MISC. CIVIL APPLICATION NO. 11 OF 2022
                             ( M/s Sadbhav Engineering Limited
                                            Vs.
                              M/s. Western Coalfields Limited )

Office Notes, Office Memoranda                          Court's or Judge's orders
of Coram, Appearances, Court's
orders     or    directions and
Registrar's orders


                                  Mr. Y.D. Shukla, Advocate for the Applicant in MCA. No. 543/2022
                                  Mr. M.U. Dastane, Advocate for the Applicant in MCA No. 10 & 11/2022.
                                  Mr. N.G. Moharir, Advocate for the Non-applicant in
                                  MCA No. 10 & 11/2022.



                                  CORAM:        AVINASH G. GHAROTE, J.

DATED : 21st APRIL, 2023

Misc. Civil Application Nos. 10/2022 and 11/2022.

The applications seek appointment of an Arbitrator. There is no dispute between the parties regarding the execution of the agreement dated 27.04.2018 in M.C.A. No. 10/2022 and agreement dated 20.11.2017 in M.C.A. No. 11/2022, both of which contain an Arbitration Clause. The bone of contention, is

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the language of the Arbitration Clause, inasmuch as, it is contended by Mr. Dastane, learned counsel for the applicant, that inspite of Clause 13A (b) the later of which mandates, that in case if for any reason what is contemplated by the first part is not permissible, the matter is not to be referred to arbitration at all, on account of the applicability of the doctrine of severability, the said clause can be severed from the arbitration clause and taking into consideration the to intent to arbitrate it is permissible for an Arbitrator to be appointed. In support of his contention, he relies upon Shin Satellite Public Co. Ltd. Vs. Jain Studios Ltd., (2006) 2 SCC 628 and specifically para 26 and 27, which is on the doctrine of severability ; Enercon (India) Limited And Others Vs. Enercon GMBH And Another, (2014) 5 SCC 1 (para 87), which holds that it is the duty of the Court to make the clause workable. He also relies upon the judgment of this Court in M/s. Shri Khatu Shyam Traders Vs. Western Coalfield Limited, Misc. Civil Application (ARBN) No. 90/2022 decided on 07.01.2023.

2. Mr. Moharir, learned counsel for the non-applicant submits, that Clause 13A (b) itself is severable into two parts, the former part being admittedly hit by the amendment of the year 2015 in the Arbitration and Conciliation Act, 1996 and by the judgment of the Hon'ble Apex Court in Perkins Eastman Architects DPC and Another Vs. HSCC (India) Limited, (2020) 20 SCC 760. He however submits, that the later part of this Clause which mandates that in case the

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former part is not possible then the parties would not go to arbitration at all, would continue to govern the field, and therefore, the matter cannot be referred to arbitration. Reliance is placed by him on Perkins Eastman Architects DPC and Another (supra) as well as Ellora Paper Mills Ltd. Vs. State of Madhya Pradesh, (2022) 3 SCC 1 and Jagdish Chander Vs. Ramesh Chander And Others, (2007) 5 SCC 719 (para 8 (iii)).

3. In Misc. Civil Application No. 543/2022, upon a similar Clause Mr. Shukla, learned counsel for the applicant, relies upon the decision of the Full bench of the Delhi High Court in Ved Prakash Mitthal Vs. Union of India and others, AIR 1984 DELHI 325 and to contend that the Arbitration Clause has to be enforced. In his case, already an Arbitrator was appointed on earlier two occasions and in the present situation the proceedings have been adjourned sine die by the Arbitrator on account of objections being raised under Section 12 (5) read with VIIth Schedule of the Arbitration and Conciliation Act, 1996, on account of which, it is contended, that the Arbitrator appointed has become ineligible to act, and therefore, needs to be replaced by an independent Arbitrator.

4. List all the matters on 28.04.2023 for further consideration.

JUDGE SD. Bhimte