M/S National Agricultural ... vs M/S Roj Enterprises (P) Ltd.
2009 Latest Caselaw 3549 Del

     *            IN THE HIGH COURT OF DELHI AT NEW DELHI

                               Date of Reserve: August 04, 2009
                              Date of Order: September 03, 2009
+ Arb.P.No.268/2008
%                                           03.09.2009
     M/S NATIONAL AGRICULTURAL COOPERATIVE MARKETING
     FEDERATION OF INDIA LTD.               .... Petitioner
               Through : Mr.A.K.Singh, Adv.

         Versus

         M/S. ROJ ENTERPRISES (P) LTD.            .... Respondent
                   Through: Mr. Krishnan Venugopal, Sr. Adv. with
                            Mr. Abir Phukan, Adv.


         JUSTICE SHIV NARAYAN DHINGRA


1.       Whether reporters of local papers may be allowed to see the
         judgment?

2.       To be referred to the reporter or not?

3.       Whether judgment should be reported in Digest?

         ORDER

1. By this application under Section 11 of the Arbitration and

Conciliation Act, the petitioner has prayed to the Court for appointment

of an Arbitrator on the ground that the petitioner invoked an arbitration

clause as contained in the agreement and the respondent agreed for

reference of the dispute to the Arbitrator. Thereafter, the petitioner

appointed Mr. Justice V.S. Aggarwal (retired from Delhi High Court) as a

sole Arbitrator to adjudicate the dispute to which respondent did not

agree. The respondent, on the other hand, moved Joint Secretary,

Cooperative Society, Mr. R.K. Tiwari for appointment of Arbitrator

under Section 84 of Multistate Cooperative Society Act, 2002. It is

stated that Section 84 of the Multistate Cooperative Society Act, 2002

would not be applicable in this case and only the Arbitrator appointed

under the agreement by the Court will have to adjudicate the dispute.

Since the parties were unable to appoint the Arbitrator by mutual

agreement, present application has been made.

2. In reply to the application, it is stated by the respondent

that the application was not maintainable for want of territorial

jurisdiction. It is submitted that only High Court at Bombay can

entertain an application under Section 11. The other objection about

maintainability of this application is that the arbitration clause as

entered into between the parties was binding on the parties and the

petitioner had not acted in accordance with the arbitration clause and

the procedure provided therein. Therefore this application under

Section 11 of the Arbitration and Conciliation Act should be dismissed.

3. During the pendency of this petition, this Court in order to

save time of the parties had asked the parties to come to an

agreement in respect of name of an Arbitrator so that dispute can be

referred to the Arbitrator. The petitioner wanted an Arbitrator of New

Delhi, whereas the respondent wanted an Arbitrator of Maharashtra.

Therefore parties did not come to an agreement in respect of name of

the Arbitrator.

4. Clause 13 of the arbitration agreement as agreed between

the parties reads as under:

"13) ARBITRATION:

In the event of any dispute or difference arising between the parties to the Agreement the same shall be referred to the Indian Arbitration Council, New Delhi."

5. In terms of the above agreement, in the event of a dispute

or difference between the parties, the same was to be referred to the

Indian Arbitration Council and the Indian Arbitration Council was to

refer the dispute to an Arbitrator appointed by it. It is undisputed that

the petitioner had not referred the dispute to the Indian Arbitration

Council. It is now settled law that the procedure prescribed for

appointment of Arbitrator in the arbitration agreement is binding on

the parties and a party cannot approach the Court without first

complying with the procedure as laid down in the agreement between

the parties. In this case, the petitioner was bound to refer the dispute

to the Indian Arbitration Council as provided in the agreement. It is

only if the council had not acted or refused to entertain the dispute,

the petitioner would have liberty to approach the Court whether at

Delhi or at Bombay, as per law. I therefore consider that the present

petition made under Section 11 is not maintainable. The petitioner

under the arbitration agreement is obliged to approach Indian

Arbitration Council first. The petition is hereby dismissed.

September 03, 2009                   SHIV NARAYAN DHINGRA J.
ak