Delhi High Court
Jones Lang Laselle Building ... vs Techpark Maintenance Services ... on 14 January, 2021
$~39
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of Judgment: 14th January, 2021
+ ARB.P. 629/2020 & I.A. 10833/2020
JONES LANG LASALLE BUILDING
OPERATIONS PRIVATE LIMITED ..... Petitioner
Through: Mr Anupam Srivastava,
Advocate.
versus
TECHPARK MAINTENANCE SERVICES
PRIVATE LIMITED ..... Respondent
Through: Mr Lokesh Bhola and Ms
Aparna Gupta, Advocates.
CORAM:
HON'BLE MR. JUSTICE VIBHU BAKHRU
[Hearing held through video conferencing]
VIBHU BAKHRU, J. (ORAL)
1. The petitioner has filed the present petition under Section 11(6)
of the Arbitration and Conciliation Act, 1996 (hereafter „the Act‟),
inter alia, praying that an Arbitrator be appointed to adjudicate the
disputes that have arisen between the parties in respect of a Property
Management Agreement entered into between them.
2. The parties had entered into a Property Management Agreement
(hereafter „Agreement‟) on 01.12.2011, in terms of which, the
respondent had engaged the petitioner for providing maintenance
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services as set out in the said Agreement.
3. On 01.01.2013, a Letter of Intent was executed by the
respondent extending the time of the said Agreement for a further
period of one year.
4. Admittedly, certain disputes have arisen in connection with the
said Agreement. The petitioner claims that the invoices raised for the
period 17.07.2013 to May, 2014 remain unpaid.
5. In view of the above, the petitioner sent a notice demanding a
sum of Rs.68,92,134.70 (Rupees Sixty Eight Lakhs Ninety Two
Thousand One Hundred Thirty Four and Seventy Paise) along with
interest @ 18% p.a. The learned counsel appearing for the respondent
states that the said notice dated 06.07.2015 also invoked the arbitration
clause as set out in the Agreement.
6. Thereafter, on 31.05.2016, the petitioner instituted a suit (Civil
Suit No.1190/2016) before the court of Civil Judge, Gurgaon for
recovery of the amounts claimed by it. On 17.04.2018, the respondent
filed an application under Section 8 of the Act praying that the parties
be referred to arbitration in terms of their Agreement.
7. The said prayer was allowed by an order dated 17.04.2018. The
operative part of the said order reads as under:-
"5. The present suit has been filed by the
plaintiff/respondent seeking recovery of Rs.
88,73,622/- alongwith pendent-lite and future interests
@ Rs. 15 % per annume on the ground that the
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defendant has availed its services under property
management agreement dated 01.12.2011 but the
defendant started evading the invoices raised by the
plaintiff and failed to pay the outstanding amount. In
reply to this application, it is admitted that plaintiff and
defendant had entered into an agreement dated
01.12.2011 for providing property management
services. In the application in hand, defendant has
averred that the said agreement was executed between
the plaintiff and defendant and it was duly executed
between the parties to the suit. A perusal of the said
agreement clearly reveals that there is signature of the
authorised representative of the defendant company as
well as of the plaintiff company at the botom of every
page of agreement, and as per clause 23 of this
agreement, it has been clearly mentioned that in the
event of any dispute between the plaintiff and
defendant, the matter shall be referred to a penal of
three arbitrators, with the client and Property Manager
appointing one arbitrators each and the arbitrators so
appointed nominating a third and further that the place
of arbitration shall be Delhi. Since there is no denial by
the plaintiff that the Property Management
Agreement dated 01.12.2011 is not signed by there
authorise representative, therefore clause 23 of this
agreement specifically goes in favour of
applicant/defendant company. Moreover, placing
reliance on case title as P. Anand Gajapathi Raju &
ors. Vs. P.V.G. Raju & ors., MANUISCI08112000;
Hindustan Petroleum Corporation Ltd. Vs. Pink City
Midway Petroleums, AIR 2003(SC)2881, it is clear
that the court has power to refer the parties to the
Arbitration. Consequently, the present application is
hereby allowed and the present suit is hereby dismissed
by virtue of application in hand and parties to the suit
are directed to proceed before the Arbitration as per
terms of the Property management agreement dated
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01.12.2011. File be consigned to record-room after due
compliance."
8. Thereafter, the petitioner once again issued a notice dated
28.04.2018 proposing the name of an Arbitrator. The respondent
responded to the said notice by a letter dated 30.05.2018. The
respondent claimed that the claims made by the petitioner were barred
by limitation. The respondent further states that the said notice calling
upon the respondent to refer the disputes to arbitration was malafide
and a counter blast to the various legitimate complaints and
representations made by its clients. The respondent called upon the
petitioner to immediately withdraw the legal notice.
9. The learned counsel appearing for the respondent now states
that the present petition is liable to be dismissed as the invocation of
the arbitration agreement is barred by limitation. He states that since
the first notice invoking the arbitration had been issued on 06.07.2015
the present petition is beyond the period of limitation. He also
referred to Section 43 of the Act, which expressly provides that the
Limitation Act, 1963 shall apply to arbitration as it applies to
proceedings in the court.
10. He also referred to the decision of this court in Golden Chariot
Recreations Pvt. Ltd. v. Mukesh Panika and Anr.: 253(2018) DLT
219 in support of his contention that the period of limitation would not
be extended by issuance of subsequent notices.
11. It is apparent from the above that there is no dispute as to the
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existence of the arbitration agreement. The Agreement includes an
arbitration clause, which reads as under:-
"23. DISPUTE RESOLUTION
23.1 The parties agree to cooperate and meet and
conduct in good faith such discussions and negotiations
as may be necessary to resolve any dispute between
them which may arise. The said negotiations shall be
conducted and proceed for no longer than 30 days from
the notice thereof by the aggrieved party to the other
party;
23.2 If a dispute arises out of or in connection with
this Agreement and the parties do not resolve it in
accordance with Section 22.1, the dispute shall be
determined as follows;
23.2. either party may give the other written notice
giving particulars of the unresolved dispute. The
dispute shall then be referred to the chief executive
officers of the Parties or their nominees who shall then
meet and attempt to resolve the dispute in time not
extending 30 days. Any agreement reached by those
persons shall be binding on the parties to the
Agreement.
23.2.2 In the case of failure by the Parties to resolve the
dispute in the manner set out above within 30 days
from the date when the dispute arose, the dispute shall
be referred to a panel of three arbitrators, with the
Client and Property Manager appointing one arbitrator
each and the arbitrators so appointed nominating a
third. The place of arbitration shall be Delhi. The
arbitration proceedings shall be governed by the
Arbitration and Conciliation Act, 1996 and shall be
conducted in the English language.
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12. The contention that the present application is barred by
limitation is unpersuasive. The petitioner had filed a suit and in the
said action, respondent had filed the application praying that the
parties be referred to arbitration. The said application was allowed on
17.04.2018 and the present application has been filed within the period
of three years from the said date.
13. Apart from the above, it is also necessary to note that after the
application under Section 8 of the Act was allowed, the petitioner had
filed a notice calling upon the respondent for appointment of an
Arbitrator. However, it appears that the parties have been unable to
agree to the appointment of an Arbitrator.
14. As stated above, the respondent now revisited the petitioner‟s
endeavour to appoint a mutually acceptable arbitral tribunal by
alleging that the petitioner‟s notice was malafide and called upon the
petitioner to withdraw the same. After having succeeded before the
civil court to compel the petitioner to take recourse to the Arbitration
Act and after having secured an order for referring the parties to
arbitration to settle the dispute, it is not open for the respondent to now
take a stand that recourse to provisions of the Arbitration Act cannot
be taken.
15. Be that as it may, it is apparent that since the present application
has been filed within the period of three years from the date of the
order of the learned civil court referring the parties to arbitration, the
contention that the present application is beyond the period of
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limitation is unsustainable.
16. The decision in the case of Golden Chariot Recreations Pvt.
Ltd. (supra) is of little assistance to the petitioner. In that case, the
parties had issued a notice invoking the arbitration clause and the
other party had contested the said invocation by disputing the
existence of the arbitration agreement. The said party claimed that the
arbitration agreement was forged. The party invoking the arbitration
had once again invoked the arbitration clause about three years
thereafter the first notice. In that context, this court had held that the
limitation would run from the notice first issued.
17. The facts in the present case are different. As noticed above, in
this case the petitioner did institute an action in a civil court after it
had issued the legal notice. However, in that suit the respondent
prevailed in its contention that the parties be referred to arbitration.
Clearly, in the circumstances, the period of limitation would not run
from the notice dated 06.07.2015, which was issued by the petitioner
but from the date of the order referring the parties to arbitration which
was passed at the instance of the respondent.
18. In view of the above, this court considers it apposite to allow
the present petition.
19. The learned counsel for the parties on instructions state, that a
sole arbitrator be appointed instead of a tribunal of three members.
They further request that the Arbitrator be appointed by the Delhi
International Arbitration Centre (hereafter „DIAC‟) and the arbitration
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be conducted under the aegis of DIAC.
20. In view of the consensus between the parties and at their
instance, this court directs that a Sole Arbitrator be appointed by the
DIAC in accordance with its rules. The arbitration shall be conducted
under the aegis of DIAC and in accordance with its rules.
21. The parties are at liberty to approach the Coordinator, DIAC for
further proceedings.
22. The application is allowed in the aforesaid terms.
VIBHU BAKHRU, J
JANUARY 14, 2021
MK
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