Delhi High Court
M/S Bikanerwala Foods Pvt. Ltd. vs Ministry Of Textiles on 9 July, 2015
Author: Valmiki J. Mehta
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ ARB.P. 178/2015
% 9th July, 2015
M/S BIKANERWALA FOODS PVT. LTD. ..... Petitioner
Through Mr. Rajiv Bansal, Advocate with
Ms. Arpita, Advocate
versus
MINISTRY OF TEXTILES ..... Respondent
Through Mr. Jaswinder Singh, Advocate
CORAM:
HON'BLE MR. JUSTICE VALMIKI J.MEHTA
To be referred to the Reporter or not?
VALMIKI J. MEHTA, J (ORAL)
1. This is a petition under Section 11(6) of the Arbitration and
Conciliation Act, 1996 (hereinafter referred to as 'the Act') for appointment
of an arbitrator in terms of clause 22 of an Agreement for License dated
05.07.2010 entered into between the parties and the relevant clause of which
agreement reads as under:-
"22. Clarifications, Disputes & Settlement
22.1 That in case of any dispute arising between the
licensor and the licensee in respect of the interpretation,
conduct or performance of any terms and conditions of
these presents, the same shall be referred to the sole
arbitration of a person who may be appointed by the
Arb.P.178/2015 Page 1 of 5
Secretary Ministry of Textiles for the purpose, under the
provisions of the Arbitration & Conciliation Act, 1996 as
amended from time to time. It will not be no
disqualification that Arbitrator appointed as aforesaid is
or has been an employee of licensor and the award of the
arbitrator will not be challenged or be open to question in
any court of law on this account.
22.2 Both the parties hereto agree to be bound by the
decision of the arbitrator and that the decision of the
arbitrator shall be final and conclusive and not open to
any challenge or review. Both the parties hereto
expressly agree that the appointment of any person as
arbitrator would not be invalidated or the decision of the
arbitrator would not be vitiated merely on the ground of
his/her being associated with DC(H) as one of the
officers or in any other capacity whatsoever."
2. Disputes have arisen between the parties with regard to renewal of
license and the terms of renewal of such license, and the petitioner therefore
issued a legal notice dated 04.06.2014 to the respondent to appoint an
arbitrator. The respondent does not dispute that the notice dated 04.06.2014
has been received by it, but it is stated that the respondent has now by its
letter dated 30.04.2015 appointed an Arbitrator Sh. A. Madhukumar Reddy,
Joint Secretary, Ministry of Textiles, New Delhi and therefore this petition
has become infructuous.
3. Learned counsel for the petitioner on the contrary argues that once the
respondent has failed to appoint an arbitrator within a period of 30 days of
Arb.P.178/2015 Page 2 of 5
receipt of the legal notice dated 04.06.2014, the respondent looses the right
to appoint an arbitrator in terms of Sections 11(5) and 11(6) of the Act.
Reliance is placed by the petitioner upon a recent judgment of the Supreme
Court of a Division Bench of three Judges in the case reported as Deep
Trading Company Vs. Indian Oil Corporation & Others (2013) 4 SCC 35.
In this judgment, a Division Bench of three Judges of the Supreme Court has
considered the earlier judgments on the issue as to whether a respondent
looses a right to appoint the arbitrator by not appointing the arbitrator after a
period of 30 days, and it has been held that if the arbitrator is not appointed
in terms of the legal notice within the stipulated period prescribed, the
respondent looses the right to appoint the arbitrator. The relevant para of the
judgment in the case of Deep Trading Company (supra) is para 19 and
which reads as under:-
"19. If we apply the legal position exposited by this Court
in Datar Switchgears Ltd. v. Tata Finance Ltd.: (2000) 8
SCC 151 to the admitted facts, it will be seen that the
Corporation has forfeited its right to appoint the arbitrator. It
is so for the reason that on 09-8-2004, the dealer called upon
the Corporation to appoint the arbitrator in accordance with
terms of Clause 29 of the agreement but that was not done
till the dealer had made application under Section 11(6) to
the Chief Justice of the Allahabad High Court for
appointment of the arbitrator. The appointment was made by
the Corporation only during the pendency of the proceedings
under Section 11(6). Such appointment by the Corporation
Arb.P.178/2015 Page 3 of 5
after forfeiture of its right is of no consequence and has not
disentitled the dealer to seek appointment of the arbitrator by
the Chief Justice under Section 11(6). We answer the above
questions accordingly."
4. In view of the above facts of the present case, and the fault of the
respondent by failing to appoint the arbitrator within a period of 30 days of
receipt of the legal notice dated 04.06.2014 sent by the petitioner to the
respondent, the ratio of the Supreme Court decision taken in the case of
Deep Trading Company (supra) will squarely come into play and
respondent has lost its right to appoint an arbitrator and therefore respondent
did not have a legal right to appoint an arbitrator in terms of the letter dated
30.04.2015 which is placed on record appointing Sh. A. Madhukumar Reddy
as an Arbitrator, as stated above.
5. Learned counsel for the parties, at this stage, agree that the arbitration
be conducted by the Delhi International Arbitration Centre, Delhi High
Court and as per the procedure of the said Centre.
6. Accordingly, Hon'ble Mr. Justice Anil Kumar (Retd.), Mobile
No.9818000140, is appointed as an Arbitrator to enter upon and decide the
disputes and differences which arose between the parties with respect to
Arb.P.178/2015 Page 4 of 5
renewal of the license of the petitioner by the respondent and all other
related incidental aspects thereto.
7. Parties or any of them can approach the Delhi International
Arbitration Centre, Delhi High Court along with the copy of the present
judgment for conducting of the arbitration proceedings.
8. The petition is accordingly allowed and disposed of in terms of the
aforesaid observations.
JULY 09, 2015 VALMIKI J. MEHTA, J.
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