Delhi High Court
Akari Enterprises Llc vs Genesis Luxury Fashion Pvt. Ltd. on 16 January, 2015
Author: S. Muralidhar
IN THE HIGH COURT OF DELHI AT NEW DELHI
ARB.P. 25/2015
AKARI ENTERPRISES LLC ..... Petitioner
Through: Ms. Karnika Seth, Advocate.
versus
GENESIS LUXURY FASHION PVT LTD. ..... Respondent
Through: Ms. Vibha D. Makhija, Senior
Advocate with
Mr. Kush Chaturvedi and
Ms. Disha Vaish, Advocates.
CORAM: JUSTICE S. MURALIDHAR
ORDER
16.01.2015
Caveat No. 49 of 2015
1. Mr. Kush Chaturvedi, learned counsel appears for the
Respondent.
2. The caveat stands discharged and disposed of as such.
IA No. 901 of 2015 (for exemption)
3. Exemption allowed subject to all just exceptions.
4. The application is disposed of.
Arb.P. No. 25 of 2015 & IA No. 902 of 2015 (u/O XIII Rule 1
CPC)
5. This is a petition under Section 11 (5) of the Arbitration and
Conciliation Act, 1996 ('Act') seeking the appointment of an
Arbitrator to adjudicate the disputes between the parties arsing out
of the Consulting Agreement ('Agreement') dated 4th August 2011
entered into between the Petitioner and the Respondent.
6. The Agreement itself notes that the Petitioner is a limited
liability company, having a business address of 1520 Cerro Gordo
Road, Santa Fe, NM 87501. The relevant clause in the agreement
about reference of disputes to the arbitration reads as under:
"Dispute Settlement Mechanism: That in case any
dispute or difference between the Company and the
Consultant in respect of this agreement the same shall
be referred for arbitration to be conducted by sole
arbitrator who shall be appointed by the Courts at
Delhi in accordance with the Arbitration and
Conciliation Act, 1996. The seat of the arbitral
proceedings shall be New Delhi."
7. Ms. Karnika Seth, learned counsel appearing for the Petitioner
submits that since both the parties have expressly agreed that the
Arbitrator will be appointed by the Courts in Delhi the present
petition is maintainable. On the other hand, Ms. Vibha D. Makhija,
learned Senior counsel appearing for the Respondent, draws the
attention to the Court of the fact that the proposed arbitration would
be in the nature of an 'international commercial arbitration' within
the meaning of Section 2 (1) (f) of the Act and therefore, in terms
of Section 11 (12) (a) of the Act, the appointment of the Arbitrator
will have to be made by the Chief Justice of India and not by this
Court. Ms. Makhija, also placed reliance on the decision of this
Court in HRD Corporation v. Gail (India) Limited 184 (2011)
DLT 390.
8. The definition of international commercial arbitration as
contained in Section 2 (1) (f) of the Act, reads as under:
"(f) "international commercial arbitration" means an
arbitration relating to disputes arising out of legal
relationships, whether contractual or not, considered as
commercial under the law in for in India and where at least
one of the parties is-
(i) an individual who is a national of, or habitually
resident in, any country other than India; or
(ii) a body corporate which is incorporated in any
country other than India; or
(iii) a company or all association or a body of
individuals whose central management and control is
exercised in any country other than India; or
(iv) the Government of a foreign country.
9. There can be no doubt in the present case that the Petitioner is a
limited liability company incorporated and having its business
outside India. An arbitration of the dispute involving the said
company would fall within the definition of 'international
commercial arbitration'. In HRD Corporation v. Gail (India)
Limited (supra) the question arose in the context of substitution of
an Arbitrator. The Court held in paras 26 and 28, as under:
"26. A conjoint reading of the aforementioned
provisions especially the interplay between Section
2(f) read with Section 11 (6) and Section 11 (12)
makes it abundantly clear that the legislature has
intentionally carved out a fine distinction between the
matters relating to the "any other arbitration" and
"international commercial arbitration" when it comes
to the process of the appointment of the arbitrator.
28. This leaves no room for doubt that Section 11 (6) is
the enabling provision which empowers the High
Court, in the present case this Court as well as
Supreme Court for appointment of the arbitrator.
However, the designated court changes depending
upon the nature of arbitration. IN the case of
international commercial arbitration, the Supreme
Court will exercise powers vested under Section 11 (6)
by virtue of the clear terms of the case of any other
arbitration, the same powers vested in it shall be
exercised by the "High Court" in view of the operation
of Section 11 (6) read with Section 11 (12) of the Act."
10. In that view of the matter, this Court is not inclined to accede
the prayer made in the present petition seeking appointment of the
Arbitrator. It is open the Petitioner to approach the learned Chief
Justice of India for relief. The petition and the pending application
are dismissed in the above terms.
S. MURALIDHAR, J.
JANUARY 16, 2015
Rk
