M/S Murliwala Agrotech Pvt. Ltd. vs Madhya Pradesh State Agro ...
2022 Latest Caselaw 6883 MP

                                   1
            IN THE HIGH COURT OF MADHYA PRADESH
                         AT JABALPUR
                              AC No. 98 of 2021
     (M/S MURLIWALA AGROTECH PVT. LTD. AND OTHERS Vs MADHYA PRADESH STATE AGRO
                                    INDUSTRIES)

Dated : 07-05-2022
      Shri Kapil Duggal, learned counsel for the applicant.

      Shri Aditya Khandekar, learned counsel for respondent No.1.

Applicants had filed application under Section 11 of the Arbitration and Conciliation Act, 1996 for appointment of Arbitrator.

Learned counsel appearing for applicant submitted that there is share

holders agreement dated 27.11.2012 between applicants and non-applicants. Clause-16 of said agreement contains arbitration clause. Applicant has made a written request on 21.10.2021 for referring dispute to Arbitrator. Non-applicant did not appoint the Arbitrator in terms of agreement.

Respondents had filed its reply and stated therein that applicant is aggrieved because respondents have decided to exit from Company. Applicant has not followed the procedure prescribed in Clause-16 of share holding agreement as no attempt was made to resolve the dispute amicably. Counsel for respondents relied on judgment passed in AC No.39/2016, 42/2016 and

43/2016 dated 30.06.2016. In said cases, it was held that if applicant had failed to follow agreed procedure mentioned in agreement then Arbitrator cannot be appointed and application is to be dismissed. On basis of aforesaid, counsel appearing for respondents prayed for dismissal of arbitration application.

Learned counsel appearing for applicant submitted that arbitration Clause-16 was followed and effort was made to amicably settle the dispute which is evident from notice dated 21.10.2021. In Clause-23 of said letter request was made to settle the dispute through negotiation. In view of same, it

cannot be said that applicant made no efforts to resolve the dispute amicably. Counsel for applicant placed reliance on order dated 29.11.2021 passed in AC No.60/2020 wherein it has been held that High Court under Section 11(6)(A) has only to consider existence of arbitration agreement. Once there is an agreement between the parties, matter is to be referred for Arbitration and other issue raised by parties is to be considered by Arbitrator.

Heard the counsel for the parties.

Arbitration clause of share holders agreement is reproduced as under:-

"Clause-XVI; Arbitration (i) In the event a dispute arises in connection with the validity, interpretation, implementation or alleged breach of this agreement, the parties shall attempt in the first instance to resolve such dispute through negotiation within forty five days after commencement of discussions or such longer period as the parties agree to in writing, then either party may refer the dispute for resolution to a sole arbitrator jointly appointed by the 'MPSAIDC' and the 'MAL'. All proceedings in any such Arbitration shall be conducted in English. The Arbitration shall be governed by the laws of India.

(ii) The venue of Arbitration shall be Bhopal only unless otherwise agreed upon between the parties.

(iii) All legal proceedings arising out of and under this Agreement shall be subject to the jurisdiction of the Courts at Bhopal."

As per said arbitration Clause effort is to be made by parties to resolve the dispute by negotiation and thereafter, either party may refer the dispute for resolution by sole Arbitrator.

Petitioner had given a legal notice on 21.10.2021 by which prayer was made to resolve the dispute by negotiation, therefore, it cannot be said that effort was not made by applicant for resolving the dispute by negotiation. There is an arbitration clause between the parties and respondents had agreed to resolve the dispute by appointment of Arbitrator.

In view of same, application filed by applicant for appointment of Arbitrator is allowed.

Shri Alok Verma, Former Judge , is appointed as Arbitrator in the case, subject to the declarations being made under Section 12 of the 1996 Act (as amended) with respect to the independence and impartiality of the arbitrator, and the ability to devote sufficient time to complete the arbitration within the period specified by Section 29-A of the 1996 Act.

The arbitration agreement states that the arbitration will be at Bhopal, Madhya Pradesh. Consequently, the seat of arbitration is at Bhopal, subject to any modification that may be made by consent of the parties. The arbitrator is, however, at liberty to conduct the proceedings at a convenient venue as per the convenience of the arbitrator and the parties if so required. The arbitrator will be paid fees in accordance with the Fourth Schedule of the 1996 Act. Both parties will share the costs of the arbitration equally.

Registry is directed to dispatch a copy of this order to Shri Justice Alok Verma, Former Judge for seeking consent at the following address:

Shri Alok Verma, Former Judge, High Court of Madhya Pradesh, R/o Akar, HIG I/463, Arvind Vihar, Baghmogaliya, Bhopal (MP), 462043

Mobile No.:7974854407, 9425007476 E Mail: [email protected] List the case for consent of said Arbitrator in the week commencing from 4.7.2022.

Digitally signed by SHABANA ANSARI (VISHAL DHAGAT) Date: 2022.05.12 14:46:25 +05'30'

JUDGE shabana