India Furnishers vs Chinar Exports Ltd. And Ors.
1996 Latest Caselaw 892 Del

JUDGMENT

M.K. Sharma, J.

(1) This is a petition filed by the petitioner under Sections 5, 8 fell of the Arbitration Act seeking for appointment of an independent and impartial person as an Arbitrator to adjudicate upon the disputes arising between the petitioner and the respondent No. 1. The respondent No. 1 engaged the services of the petitioner for the work (if interior furnishing and renovation of Chinar Exports Ltd. situated at 7th floor of World Trade Tower, New Delhi. In respect of the same a memorandum of understanding came to be executed between the petitioner and respondent No. 1, a copy of which is on record.

(2) Counsel appearing for the petitioner states that the petitioner would be content if the named Arbitrator in the memorandum of understanding is also appointed as the sole Arbitrator to adjudicate upon and decide the disputes and differences arising .between the parties and as stated in the petition. My attention has also been drawn to the various clauses of the memorandum of understanding.

(3) I have heard the learned Counsel appearing for the parties. According to the learned Counsel for the petitioner various clauses of the memorandum of understanding would show that it was agreed upon between the parties to the agreement namely the petitioner and respondent No. 1 that any dispute or differences that might arise between the parties with regard to rate or any other claim in respect of the work of interior furnishing and renovation of Chinar Exports Office was to be decided through reference to the sole arbitration of Mr. H.S. Sandhu.

(4) The Counsel appearing for the respondents submits that the various clauses of memorandum of understanding do not show that there was any intention between the parties to refer the disputes arising between the parties to an Arbitrator.

(5) My attention has been drawn to a decision of the Supreme Court in Smt. Rukmani Bai Gupta v. The Collector, Jabalpur and Others, wherein it has been held that the arbitration agreement is not required to be in any particular form. It has been further held that what is required to be ascertained is whether the parties have agreed that if de sputes arise between them in respect of the subject matter of contract such disputes shall be referred to arbitration, then such an arrangement would spell out an arbitration agreement.

(6) The moot point, therefore, that arises for my consideration in the present case is as to whether Clauses 3, 4 & 6 could be said to be arbitration agreement between the parties or not. A combined reading of Clauses 3, & 4 would show that in case of dispute with regard to the rates the same would be decided through discussion and if there be any difference between the parties in respect of rates the same shall be resolved by reference to Mr. H.S. Sandhu for arbitration. Apart from the above two clauses there is another clause namely Clause 6 which provides that all claims of the petitioner in respect of the work under reference having any financial implication whatsoever shall also be decided finally by Mr. H.S. Sandhu in the event of Architect/Consultants and the petitioner could not arrive at a mutually acceptable decision and that Mr. Sandhu's decision would be final and binding. The framing of the aforesaid clauses including clause No. 6 would show that the parties to the said memorandum of understanding for all practical purposes and intent intended the same to be arbitration clauses between the parties. Therefore, I have no hesitation in my mind to hold that the memorandum of understanding contained an arbitration clause and in case of disputes and differences that would arise between the parties the same were to be referred to the arbitration of Mr. H.S. Sandhu.

(7) In that view of the matter, since in the present case disputes and differences have arisen between the parties namely - the petitioner and respondent No. 1 in respect of work under reference I refer the said disputes to the sole arbitration of Mr. H.S. Sandhu. The Arbitrator shall enter upon the reference within one month from the date of receipt of copy of this order and shall issue notices to the parties to appear before him. The Arbitrator shall make/publish his award within 4 months from the date of entering upon reference and /or within such reasonable time as the parties may agree upon. It shall be open to the Arbitrator to fix his remuneration for conducting the arbitration proceedings. The fee of the Arbitrator shall be shared by the parties equally. The petition stands allowed to the extent indicated above. The parties shall bear their own costs.