Delhi High Court
Noida Toll Bridge Company Limited vs New Okhla Industrial Development ... on 24 October, 2017
$~31
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ ARB.P.449/2017
Date of decision : 24th October, 2017
NOIDA TOLL BRIDGE COMPANY LIMITED ..... Petitioner
Through Mr.Suhail Dutt, Sr. Adv. with
Mr.Lynn Perera and
Mr.Chaitanya Kaushik, Advs.
versus
NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY
..... Respondent
Through Mr.Ravindra Kumar, Adv.
CORAM:
HON'BLE MR. JUSTICE NAVIN CHAWLA
NAVIN CHAWLA, J. (Oral)
This is a petition under Section 11(4) of Arbitration and
Conciliation Act, 1996 (hereinafter referred as the said Act) seeking
direction for appointment of an arbitrator by New Okhla Industrial
Development Authority, the respondents herein. The parties had
entered into a Concession Agreement dated 12.11.1997 with respect to
the Delhi-Noida Bridge Project. Clause 26.1 of the said agreement
provides that in the event of any dispute, controversy or claim arising
ARB.P 449/2017 Page 1
between the parties in connection with the said agreement, the same
shall be settled by a panel of arbitrators in accordance with the Indian
Arbitration and Conciliation Act, 1996. The arbitration panel shall
consist of three arbitrators, one each to be appointed by the parties to
the agreement and the third to be appointed by the two such appointed
arbitrators. Clause 26.1(a) specifically records that the arbitration
proceedings shall take place in Delhi.
2. On a Public Interest Litigation i.e. PIL No. 60214/12, Noida
Residents Welfare Association v. Noida Toll Bridge Company
Limited, High Court of Allahabad vide its order dated 26.10.2016 held
clause 13 of the Concession Agreement to be bad and inoperative in
the eyes of law. It further held that the method of calculation of total
project cost under Clause 14 of the Concession Agreement is also
arbitrary and against the public policy. This order has been challenged
by the petitioner before the Supreme Court by way of SLP (Civil) No.
33403/16 and the same is pending adjudication. There is no stay of
the order passed by the Allahabad High Court.
3. The petitioner by way of notice dated 14.02.2017 invoke the
arbitration clause in the Concession Agreement. It further, by notice
dated 31.05.2017, appointed its nominee arbitrator and called upon the
respondent to appoint its nominee arbitrator in terms of the arbitration
agreement. As the respondent failed to appoint its nominee arbitrator,
a further notice dated 03.07.2017 was sent by the petitioner to the
respondent. The respondent vide its reply letter dated 18.07.2017
inter-alia observed that in view of pendency of the matter before the
ARB.P 449/2017 Page 2
Supreme Court, it would neither be proper nor possible for the
respondent to accede the request of the petitioner for reference of the
disputes to the arbitration or to consent to appoint its nominee
arbitrator. This forced the petitioner to file the present petition before
this Court.
4. Upon notice being issued to the respondent, respondent has
filed its reply to the petition. It has been contended that this Court
would lack territorial jurisdiction to entertain the present petition in as
much as the cause of action, if any, has arisen in the State of Uttar
Pradesh and the respondent is also having its office in the State of
Uttar Pradesh and has no office within the territorial jurisdiction of
this Court. I am afraid I cannot agree with the said submission. As
noted above, clause 26.1(a) of the Concession Agreement records that
the place of arbitration shall be Delhi. It has been repeatedly held that
for purposes of jurisdiction under the said Act, it is the place of
arbitration which shall prevail and not the subject matter of the suit or
the place of residence of the defendant/respondent.
5. The learned Senior Counsel for the petitioner has relied upon
the judgement of the Supreme Court in Bhart Aluminium Company v.
Kaiser Aluminium Technical Services INC. (2012) 9 SCC 552 and
Indus Mobile Distribution Pvt. Ltd. v. Datawind Innovations Pvt.
Ltd. and Ors. (2017) 7 SCC 678. In the latter judgment, the Supreme
Court, in fact, holds and reiterates that once the seat of arbitration has
been fixed, it would be in the nature of an exclusive jurisdiction clause
as to the Courts which exercise supervisory power over the arbitration.
ARB.P 449/2017 Page 3
Reference has also been drawn to the judgment of this Court in Ion
Exchange (India) Ltd. v. Panasonic Electric Works Co. Ltd. (2014) 4
High Court Cases (Del)1, wherein the Division Bench of this Court
held that the Courts at the sitting or place of arbitration would have
territorial jurisdiction to entertain an application under the said Act
subject to the provisions of Section 42 thereof, irrespective of the fact
that the cause of action arose elsewhere and/or the respondent resides
elsewhere.
6. In view of the above, I find no merit in the objection raised by
the respondent as far as territorial jurisdiction of this Court is
concerned.
7. Though, the arbitration agreement itself is not denied by the
respondent, learned counsel for the respondent submits that in view of
the judgment of Allahabad High Court and the pendency of the appeal
before the Supreme Court, the disputes raised by the petitioner are by
themselves not arbitrable, at this stage at least. He submits that the
petition is therefore, premature. I am afraid that even this submission
of the learned counsel for the respondent cannot be sustained. Under
Section 11(6A) of the Act, the examination of the Court on an
application under Section 11 (4), 11(5) and 11(6) has been confined to
the existence of an arbitration agreement. In Picasso Digital Media
Pvt. Ltd. v. Pick-A-Cent Consultancy Service Pvt. Ltd.(Arbitration
Petition 22/2016), this Court in its order dated 19.1.2016, relying on
the said provision, held that the Court, at this stage, cannot examine
whether the respondent has justified claim against the petitioner and
ARB.P 449/2017 Page 4
this question will have to be examined in the arbitration proceedings
itself.
8. In view of the above, I find no impediment for appointment of
an Arbitrator on behalf of the respondent in terms of Clause 26.1 (a) of
the Concession Agreement dated 12.11.1997. Accordingly, Justice
Satya Barta Sinha, (Retired) [Mob. No.9868219666] is appointed as a
nominee Arbitrator on behalf of the respondent.
9. It is made clear that nothing in this order should be treated as an
expression of opinion on the merits of the claim or the defence of
either party.
The petition is accordingly disposed of.
NAVIN CHAWLA, J
OCTOBER 24, 2017/vp
ARB.P 449/2017 Page 5
