Delhi High Court
Plus Corporate Ventures Pvt. Ltd. vs Religare Finvest Ltd. on 20 January, 2015
Author: S. Muralidhar
IN THE HIGH COURT OF DELHI AT NEW DELHI
ARB.P. 627/2014 & IA No. 25041 of 2014 (for stay)
PRANIDHI COMMERCE PVT LTD ..... Petitioner
Through: Mr. A.S. Chandhiok, Senior
Advocate with
Mr. Anil Airi, Mr. Kamal Budhiraja and
Ms. Shruti Agrawal, Advocates.
versus
RELIGARE FINVEST LTD ..... Respondent
Through: Mr. Sanjeev Puri, Senior
Advocate with
Mr. Ruchin Midha, Advocate.
With
ARB.P. 628/2014 & IA No. 25049 of 2014 (for stay)
KALYANI BARTER PVT LTD ..... Petitioner
Through: Mr. A.S. Chandhiok, Senior
Advocate with
Mr. Anil Airi, Mr. Kamal Budhiraja and
Ms. Shruti Agrawal, Advocates.
versus
RELIGARE FINVEST LTD. ..... Respondent
Through: Mr. Sanjeev Puri, Senior
Advocate with Mr. Ruchin Midha,
Advocate.
With
ARB.P. 629/2014 & IA No. 25055 of 2014 (for stay)
YUTHIKA COMMERCIAL PVT. LTD. ..... Petitioner
Through: Mr. A.S. Chandhiok, Senior
Advocate with
Mr. Anil Airi, Mr. Kamal Budhiraja and
Ms. Shruti Agrawal, Advocates.
Arb.P. Nos. 627, 628, 629, 630 & 631 of 2014 Page 1 of 6
versus
RELIGARE FINVEST LTD ..... Respondent
Through: Mr. Sanjeev Puri, Senior
Advocate with
Mr. Ruchin Midha, Advocate.
With
ARB.P. 630/2014 & IA No. 25092 of 2014 (for stay)
PLUS CORPORATE VENTURES PVT. LTD. ..... Petitioner
Through: Mr. A.S. Chandhiok, Senior
Advocate with
Mr. Anil Airi, Mr. Kamal Budhiraja and
Ms. Shruti Agrawal, Advocates.
versus
RELIGARE FINVEST LTD ..... Respondent
Through: Mr. Sanjeev Puri, Senior
Advocate with
Mr. Ruchin Midha, Advocate.
and
ARB.P. 631/2014 & IA No. 25096 of 2014 (for stay)
MARUBHUMI DEALERS PVT. LTD. ..... Petitioner
Through: Mr. A.S. Chandhiok, Senior
Advocate with
Mr. Anil Airi, Mr. Kamal Budhiraja and
Ms. Shruti Agrawal, Advocates.
versus
RELIGARE FINVEST LTD. ..... Respondent
Through: Mr. Sanjeev Puri, Senior
Advocate with Mr. Ruchin Midha,
Advocate.
CORAM: JUSTICE S. MURALIDHAR
Arb.P. Nos. 627, 628, 629, 630 & 631 of 2014 Page 2 of 6
ORDER
20.01.2015
1. These are petitions under Section 11 of the Arbitration and Conciliation
Act, 1996 ('Act') seeking the appointment of an Arbitrator to adjudicate
the disputes between the parties.
2. Mr. A.S. Chandhiok, learned Senior counsel for the Petitioners, relies
on the decisions of this Court in Bhartia Cutler Hammer Limited v. AVN
Tubes Limited 1995 (33) DRJ 672 and A.V.N. Tubes Limited v. Bhartia
Cutler Hammer Limited 1992 (2) Arb LR 8, and submits that both acts of
reference of disputes to an Arbitrator and the appointment of an Arbitrator
cannot be by the same party and that such a clause would be, on the face
of it, void. He submits that Clause 7.12 of the Loan Agreement dated 25th
April 2011 can at best be read as envisaging reference of disputes to
arbitration being sought by the Petitioner and the appointment of the
Arbitrator by the Respondent/Lender whereas in the instant cases it is the
Respondent/Lender which is the party raising the disputes and also
unilaterally nominating the Arbitrator. Mr. Chandhiok submits that
although the Petitioner has already nominated the Arbitrator, it will be
open to the Court for appointing an Arbitrator under Section 11 of the
Act.
3. Mr. Sanjeev Puri, learned Senior counsel for the Respondent, draws
attention of the Court to the decision of the Supreme Court in Antrix
Corporation Limited v. Devas Multimedia Pvt. Ltd. 2013 (2) Arb LR
226 (SC) and the decision of this Court in Delhi Inframart Pvt. Ltd. v.
N.K. Singhal (decision dated 13th November 2014 in Arb. P. No. 439 of
2014). He points out that by letter dated 4th December 2014 the
Respondent appointed a sole Arbitrator in terms of Clause 7.12 of the
Agreement. Once the Arbitrator has been appointed, the question of
entertaining the present petitions under Section 11 of the Act does not
arise.
4. The above submissions have been considered. Clause 7.12 of the
Agreement reads as under:
"7.12 Arbitration: Any and all disputes, claims, differences
arising out of or in connection with this Agreement and
Schedule (s) of Terms/Repayment Schedule/s attached hereto
or the performance of this Agreement shall be settled by
arbitration to be referred to a sole arbitrator to be appointed
by the Lender and the award thereupon shall be binding upon
the parties to this Agreement. The place of the arbitration
shall be in Delhi, in accordance with the provisions of the
Arbitration and Conciliation Act, 1996 any statutory
amendments thereof."
5. A perusal of Clause 7.12 reveals that a dispute can be referred by
either party to arbitration. This Court is unable to agree with the reading
of the said Clause in the manner suggested by Mr. Chandhiok. There is
nothing to indicate that if the disputes are referred to Arbitrator by the
Lender, it is disabled from appointing the Arbitrator unilaterally. The
arbitration clause considered by the Court in A.V.N. Tubes Limited v.
Bhartia Cutler Hammer Limited (supra) gave one of the parties the
exclusive right to go in for arbitration. The same party was also given the
right to appoint the Arbitrator. In the circumstances, the Court held the
said clause to be void. In the present case, however Clause 7.12 permits
either party to seek reference of the disputes to arbitrator. Moreover, an
arbitration agreement, signed voluntarily by the parties, envisaging
appointment of the Arbitrator by one of the parties cannot per se be
declared invalid on that score.
6. In any event once the Respondent has acted on the said clause and
appointed an Arbitrator then the question of entertaining the present
petitions under Section 11 of the Act for appointment of an Arbitrator
does not arise. The decision of the Supreme Court in Antrix Corporation
Limited (supra) clarifies the legal position as under:
"33. The law is well settled that where an Arbitrator had
already been appointed and intimation thereof had been
conveyed to the other party, a separate application for
appointment of an arbitrator is not maintainable. Once the
power has been exercised under the Arbitration Agreement,
there is no power left to, once again, refer the same disputes
to arbitration under Section 11 of the 1996 Act, unless the
order closing the proceedings is subsequently set aside. In
Som Datt Builders Pvt. Ltd. v. State of Punjab 2006 (3) RAJ
144 (P&H)(DB), the Division Bench of the Punjab and
Haryana High Court held, and we agree with the finding, that
when the Arbitral Tribunal is already seized of the disputes
between the parties to the Arbitration Agreement,
constitution of another Arbitral Tribunal in respect of those
same issues which are already pending before the Arbitral
Tribunal for adjudication, would be without jurisdiction."
7. The challenge to the validity and existence of an arbitration agreement
can be raised before the learned Arbitrator under Section 16 of the Act.
However, as far as the present cases are concerned, such challenge by the
Petitioners, if any, can be on grounds other than the one urged above
which has been negatived by the Court.
8. With the above observations, the petitions and the pending applications
are dismissed.
S. MURALIDHAR, J.
JANUARY 20, 2015
Rk
