Delhi High Court
Kashipur Agro Industries Private ... vs National Seeds Corporation ... on 25 September, 2017
$~3
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment delivered on: 25.09.2017
+ ARB.P. 488/2017
KASHIPUR AGRO INDUSTRIES PRIVATE LIMITED .....Petitioner
Versus
NATIONAL SEEDS CORPORATION LIMITED ..... Respondent
Advocates who appeared in this case:
For the Petitioner: Mr Anant Agarwal and Ms Chaanjeet Kaur Bhatia
For the Respondent : Mr Yashvardhan, Ms Smita Kant, Mr Ambuj Dixit,
Mr Ankit Goel and Ms Kritika Angirish
CORAM:-
HON'BLE MR JUSTICE SANJEEV SACHDEVA
JUDGMENT
25.09.2017
SANJEEV SACHDEVA, J. (ORAL)
1. The petitioner, by this petition under Section 11 of the
Arbitration & Conciliation Act, 1996 (hereinafter referred to as 'the
Act'), seeks appointment of a Sole Arbitrator to adjudicate the
disputes between the parties.
2. Agreement for supply of wheat seed was entered into between
the petitioner and respondent on 09.02.2016.
3. As per the petitioner, the respondent failed to pay the entire
price of the seeds lifted from the petitioner and further failed to lift the
agreed quantity of seeds from the petitioner.
4. Accordingly, disputes arose between the parties and the
petitioner invoked the Arbitration Clause.
5. The relevant Arbitration Clause, as agreed to between the
parties, reads as under:-
"35). Settlement of disputes:
All disputes in relation to the E.O.I., the contract or the
interpretation of any of their terms or implementation
there-of or arising out of or concerned directly or
indirectly with the contract/E.O.I. shall be referred to the
Sole arbitrator to be appointed by the Chairman-cum-
Managing Director of the Corporation/ organizer and in
the absence of CMD, the highest Executive Officer of the
Corporation shall make such appointment. The venue of
arbitration shall be at New Delhi. The court of law at the
New Delhi/Delhi alone will have jurisdiction in the
matter of any disputes whatsoever.
***** ***** *****"
6. The petitioner invoked arbitration by notice dated 24.04.2017
with a reminder dated 30.05.2017 to the Chairman-cum-Managing
Director to appoint an Arbitrator within thirty days of the receipt of
the notice.
7. On the failure of the Chairman-cum-Managing Director to
appoint an Arbitrator, in terms of Clause 35, the petitioner filed this
petition on 01.08.2017 after furnishing an advance copy to the
respondent.
8. Notice was directed to be issued on 08.08.2017.
9. In the reply, respondents have contended that in terms of Clause
35, Arbitrator has been appointed by the highest Executive Officer of
the Corporation as the Chairman-cum-Managing Director was not in
Office, however, the said appointment was subsequently ratified by
the Chairman-cum-Managing Director on 22.08.2017.
10. Learned counsel for the petitioner relies on the decision of the
Supreme Court in DATAR SWITCHGEARS LIMITED VERSUS TATA
FINANCE LIMITED, 2000(8) SCC 151, wherein the Supreme Court has
held that in cases arising under Section 11(6), if the respondent has
not made an appointment within thirty days of the demand, the right
to make an appointment is not automatically forfeited but continues,
however, such right has to be exercised prior to the petitioner filing
the application under Section 11 seeking appointment of an Arbitrator.
It is contended that on filing of the Section 11 application, right to
appoint an Arbitrator, in terms of the Arbitration Clause, ceases.
11. Learned counsel for the petitioner contends that since the
appointment was made by the respondent, after the petitioner had filed
the petition under section 11 of the Act and advance copy of the same
was delivered to the respondent, respondent has forfeited the right to
appoint an Arbitrator.
12. In view of the judgment of the Supreme Court in DATAR
SWITCHGEARS LIMITED (supra), without raising any aspersions on the
Arbitrator appointed by the respondent, it is held that the right of the
respondent to appoint an Arbitrator, as conferred by Clause 35 of the
Agreement between the parties, ceased with the petitioner filing this
petition and the appointment made post the same is non-est.
13. Thus, arbitrator is required to be appointed by Court.
14. Accordingly, it is directed that the Arbitrator be appointed
under the Rules of the Delhi International Arbitration Centre.
15. The parties shall appear before the Coordinator, Delhi
International Arbitration Centre on 12th October, 2017 at 11 AM.
16. The Arbitration shall be conducted under the aegis of Delhi
International Arbitration Centre in accordance with law.
17. The petition is allowed in the above terms.
18. Dasti under signatures of the Court Master.
SANJEEV SACHDEVA, J
SEPTEMBER 25, 2017
'Sn'
