Cbre South Asia Pvt Ltd vs M.P. Housing And Infrastructure ...
2025 Latest Caselaw 7079 MP

Madhya Pradesh High Court

Cbre South Asia Pvt Ltd vs M.P. Housing And Infrastructure ... on 25 June, 2025

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NEUTRAL CITATION NO. 2025:MPHC-JBP:27582




      IN THE HIGH COURT OF MADHYA PRADESH
                  AT JABALPUR
                                          BEFORE
                             HON'BLE SHRI JUSTICE DEEPAK KHOT
                                  ON THE 25th OF JUNE, 2025
                                    ARBITRATION CASE No. 3 of 2025
                   CBRE SOUTH ASIA PVT LTD
                           Versus
 M.P. HOUSING AND INFRASTRUCTURE DEVELOPMENT BOARD (MPH
                          AND IDB)

Appearance:
          Shri Anurag Gohil - Advocate for the applicant.
          Shri Abhay Kesharwani - Advocate for the respondent.


                                               ORDER

The present application has been filed by the applicant under Section 11(6) of

the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act of

1996') for appointment of Arbitrator.

2. The application has been submitted by the applicant for referring the dispute

arose between tween the parties on account of termination of agreement vide Annexure Annexure-A/7

dated 14.11.2024. An agreement dated 13.02.2024 (Annexure-A/3) A/3) was executed

between the applicant and non-applicant non in regard to 'Consultants Services' for

'Preparation of Detailed Masterplan and Project Report for Hukumchand Mill Area at

Shivaji Nagar, Indore, Madhya Pradesh'. The said agreement has been executed

pursuant to Letter of Acceptance (LOA) dated 31.01.2024 (Annexure-A/2). As per

the said agreement, the work assigned to the applicant was required to be done under

timeline as prescribed under the 'Work Order' dated 01.03.2024 (Annexure-A/4).

2. It is submitted that the non-applicant, by invoking clause 2.9.1(a) of the

General Conditions of Contract, has issued termination notice dated 14.11.2024

(Annexure-A/7) for closure of contract. It is further submitted that a showcase notice

dated 04.10.2024 (Annexure-A/5) was issued to show cause that the obligation

arising out of the agreement be completed/remedied within 30 days from the date of

issuance of showcase notice. The said notice was replied vide Annexure-A/6 dated

28.10.2024 denying the allegations made in the show cause notice with further

assurance that the applicant shall adhere to the timeline to complete the project as per

the terms of the agreement. But according to the non-applicant, when the default was

not remedied, the termination notice dated 14.11.2024 (Annexure-A/7) has been

issued and accordingly, terminated the agreement Annexure-A/3 dated 13.02.2024. It

is submitted that against the termination notice, the applicant has issued a letter vide

Annexure-A/8 dated 28.11.2024 inviting the attention of the non-applicant towards

clause- 8.1 of the agreement (Annexure-A/3) which is as under :-

"8. Settlement of Disputes-

8.1 Amicable Settlement : Performance of the contract is governed by the terms and conditions of the contract, in

case of dispute arises between the parties regarding any matter under the contract, either Party of the contract may send a written Notice of Dispute to the other party. The Party receiving the Notice of Dispute will consider the Notice and respond to it in writing within 30 days after receipt. If that party fails to respond within 30 days, or the dispute cannot be amicably settled within 60 days following the response of that party, clause GC 8.2 shall become applicable."

3. Again, when no head was paid to Annexure-A/8 dated 28.11.2024, the

applicant has issued a notice dated 06.12.2024 (Annexure-A/9) under section 11 of

the Act of 1996 for referring the matter to the Arbitrator as per the settlement dispute

contained in clause-8 of the agreement and also shown their desire to settle the matter

amicably. It is submitted that when the authorities of the non-applicant have not acted

upon the letter Annexure-A/8 and notice Annexure-A/9, the applicant was left with

no other option except to file this application under Section 11(6) of the Act of 1996

for appointment of Arbitrator pursuant to clause-8.2 of the agreement. It is submitted

that Arbitration clause is admitted by the parties and according to the clause, the

dispute, if any, arise between the parties is required to be settled as per the Settlement

of Dispute clause-8 of the agreement and when the matter was not settled by the non-

applicant despite of Annexures-A/8 and A/9 notices, the application before this Court

for referring the matter to arbitration by appointing an arbitrator has been filed. It is

further submitted that the cause of action accrued when the letter Annexure-A/8 dated

28.11.2024 and notice Annexure-A/9 dated 06.12.2024 have not been acted upon or

responded in accordance with the terms of agreement and accordingly on the basis of

the above facts, prayed for appointment of an arbitrator.

4. Refuting the submissions made by the learned counsel for the applicant, it is

submitted by the learned counsel for the respondent that the notice Annexure-A/5

dated 04.10.2024 was in fact, a notice under clause-2.8 of the General Conditions of

the Contract and it may be read in that context only. It is further submitted that when

despite of the service of show cause notice, the applicant has not performed his

obligation as per the agreement, there was no option left for the non-applicant except

to invoke clause-2.9.1(a) of the General Conditions of Contract, terminating the

contract in question. It is further submitted that non-applicant was willing to settle the

matter and therefore, when again a notice dated 21.12.2024 was received, that has

been replied vide letter dated 03.02.2025 (Annexure-R/3) calling the applicant on

04.02.2025 in person for hearing on the application and as such, the non-applicant

was willing to resolve the matter amicably but the applicant, much prior to letter

dated 03.02.2025 (Annexure-R/3), had filed an application under Section 11(6) of the

Act of 1996 for appointment of Arbitrator and prayed that this application being

premature deserves to be dismissed.

5. Heard the learned counsel for the parties and perused the records.

6. Admittedly, the agreement Annexure-A/3 dated 13.02.2024 has been executed

between the parties for 'Preparation of Detailed Masterplan and Project Report for

Hukumchand Mill'. The obligation was required to be done by the applicant

consultancy within the stipulated time as provided under the work order Annexure-

A/4 dated 01.03.2024. It is apparent from Annexure-A/5 dated 04.10.2024 that the

applicant could not perform the work assigned under the contract within stipulated

time and as such, the dispute arose at the same time. However, the applicant has

replied to the said notice vide Annexure-A/6 dated 28.10.2024 but as the subject

matter of the agreement could not be remedied as sought by the notice, the

termination notice has been issued by the non-applicant that clearly shows that there

was a serious dispute between the parties in respect of performance of the agreement

as agreed between the parties. However, it is said by both the parties that they have

tried to settle the matter amicably by issuing and responding to the letters to each

other but as is seen from the record that the Annexures -A/8 and A/9 were not

redressed in time and finally vide Annexure-R/3 dated 03.02.2025, the non-applicant

has asked the applicant to appear in person for hearing but much prior to the said

date, i.e., 03.02.2025 (Annexure-R/3), pursuant to the letter Annexure-A/8 and notice

Annexure-A/9 dated 28.11.2024 and 06.12.2024 respectively, the applicant had filed

this present application invoking Section 11(6) of the Act of 1996 before this Court

for referring the matter for arbitration by appointing an Arbitrator.

7. The respondent does not dispute that there is an arbitration clause in the

agreement dated 13.02.2024 and any dispute arise between the parties can be settle

under the Settlement of Dispute 'Arbitration' clause-8.2 of the agreement. Clause 8.2

of the General Conditions of Contract prescribes as under :-

"8.2 Arbitration :

In the case of dispute arising upon or in relation to or in connection with the contract between the Employer and the Consultant, which has not been settled amicably, any party can refer the dispute for Arbitration under (Indian) Arbitration and Conciliation Act, 1996."

It is seen from clause 8.1 and 8.2 of the General Conditions of Contract that in

case of dispute arising between the parties regarding any matter under the contract,

either party of the contract may send a written notice to the other party. The Party

receiving the Notice of Dispute will consider the notice and respond to it in writing

within 30 days after receipt and if that party fails to respond within 30 days, or the

dispute cannot be amicably settled within 60 days following the response of that

party, clause 8.2 of the General Conditions of Contract shall become applicable.

8. Learned counsel for the applicant has invited the attention of this Court to the

notice dated 28.11.2024 (Annexure-A/8) wherein, the applicant has sought attention

of non-applicant to invoke amicable settlement clause. The non-applicant was

required to act upon within 30 days as per the clause 8.1 which would end on

27.12.2024 and 60 days period from the said date would end on 17.01.2025. The

present application has been filed on 17.01.2025. It is further apparent from the

record that as per clause-2.9.7, when dispute arises between the parties, in the event

of termination, may refer the matter within 45 days under clause-8 for Settlement of

Disputes. The termination notice was issued on 14.11.2024 (Annexure-A/7) and

reference by the applicant has been made on 06.12.2024 vide Annexure-A/9 by

invoking clause- 2.9.1(a) of the agreement. As such, the reference clause- 2.9.7 was

within 45 days from the date of occurrence of termination notice. As such the dispute

is covered as per the arbitration clause of the agreement clause-8 and clause-2.9.7.

9. To bolster his submissions, learned counsel for the applicant has invited the

attention of this Court towards the principal laid down by Hon'ble the Apex Court

in the case of Interplay between Arbitration Agreements under the Arbitration

and Conciliation Act 1996 and the Indian Stamp Act 1899 reported in (2024) 6

SCC 1, in paragraphs - 208 and 209 which are reproduced herein under :-

"208. The Statement of Objects and Reasons of the 2015 Amendment Act are as follows :

(iii) an application for appointment of an arbitrator shall be disposed of by the High court or Supreme Court, as the case may be, as expeditiously as possible and an endeavour should be made to dispose of the matter within a period of sixty days.

(iv) to provide that while considering any application for appointment of arbitrator, the High court or the Supreme Court shall examine the existence of a prime facie arbitration agreement and not other issues.

209. The above extract indicates that the Supreme Court on High court at the stage of the appointment of an arbitrator shall "examine the existence of a primary facie arbitration agreement and not other issues". These other issues not only pertain to the validity of the arbitration agreement, but also include any other issues which are a consequence of unnecessary judicial interference in the arbitration proceedings. Accordingly, the "other issues"

also include examination and impounding of an unstamped instrument by the referral court at the Section 8 or Section 11 stage.

The process of examination, impounding, and dealing with an unstamped instrument under the Stamp Act is not a time-bound process, and therefore does not align with the stated goal of the Arbitration Act to ensure expeditious and time-bound appointment of arbitrators. Therefore, even though the Law Commission of India Report or the Statement of Objects and Reasons of the 2015 Amendment Act do not specifically refer to SMS Tea Estates (supra), it nevertheless does not make any difference to the position of law as has been set out above."

From the above, it is clear that the Hon'ble Apex Court has categorically

held that for the purpose of deciding application under Section 11(6) of the Act of

1996, the important factor is the only the existence of prima-facie arbitration

agreement and not other issues. These other issues not only pertain to the validity

of the agreement but also include any other issues which are a consequence of

unnecessary judicial interference in the arbitration proceedings. This makes it

crystal clear that at the time of filing of application under Section 11(6) of the Act

of 1996, the Court is only to see that the matter is arbitrable and there is an

arbitration clause in the agreement for referring the matter for arbitration as

resolved by the parties in the agreement. Learned counsel for the applicant has also

relied upon the case of SBI General Insurance Co. Ltd. Vs. Krish Spinning

reported in (2024) 7 SCR 840.

10. From bare perusal of the document submitted by the applicant and non-

applicant, it is crystal clear that there is an arbitration agreement between the

parties and if any dispute arise between the parties is required to be resolved as per

the amicable settlement under clause 9 of the agreement. As per clause- 2.9.7,

when the termination notice was received, it was well within time of 45 days and

the applicant has invoked the settlement clause by issuing Annexure-A/8 and

Annexure-A/9 dated 28.11.2024 and 06.12.2024 respectively. It shows the

intention of the parties to refer the matter for the settlement of their dispute as per

the arrangement prescribed under the agreement. The only contention of the

respondent is that before settling the matter in dispute amicably, the applicant has

filed the present application but this agreement does not hold force on account of

Annexure-R/3 which is the letter dated 03.02.2025 which is issued much after

filing of the application and the notices and letters accepted by the parties.

Therefore, this Court is of the considered opinion that the dispute being arbitrable

between the parties is required to be referred to the Arbitrator appointed by this

Court under Section 11(6) of the Act of 1996. Therefore, this application filed

under Section 11(6) of the Act of 1996 is allowed.

11. Also, heard on the applications I.A. No.8259/2025 and I.A. No.1335/2025

which are applications under Section 9 of the Act of 1996. It is submitted by the

learned counsel for the applicant that since, the termination notice dated

14.11.2024 has already been issued by the non-applicant, therefore, by an interim

measure, it is required to be stayed under Section 9 of the Act of 1996. The said

application has been replied by the non-applicant stating that this Court is not

having jurisdiction to decide the application under Section 9 because as per the

bare perusal of language of Section 9, it is clear that only the Court which is

defined under the definition clause of Act of 1996 is Principal Civil Court of the

District having the jurisdiction to decide the application under Section 9 of the Act.

In support of his submission, learned counsel has relied upon the judgment passed

by Hon'ble Supreme Court in the case of State of West Bengal and Others vs.

Associated Contractors reported in 2015(1) SCC 32 and has invited attention of

this Court to para-25 wherein, the conclusion by the Hon'ble Apex Court has been

summarized which is reproduced here in under :-

"25. Our conclusions therefore on section 2(1)(e) in section 42 of the arbitration Act 1996 are as follows :

(a) section 2(1)(e) contains an exhaustive definition marking out only the Principal Civil Court of original jurisdiction in a district or a High Court having

original civil jurisdiction in the State, and no other court as "court" for the purpose of Part I of the Arbitration Act, 1996.

(b) The expression "with respect to an arbitration agreement" makes it clear that section 42 will apply to all applications made whether before or during arbitral proceedings or after an Award is pronounced under Part-I of the 1996 Act.

(c) However, Section 42 only applies to applications made under Part-I if they are made to a court as defined. Since applications made under Section 8 are made to judicial authorities and since applications under Section 11 are made to the Chief Justice or his designate, the judicial authority and the Chief Justice or his designate not being court as defined, such applications would be outside Section 42.

(d) Section 9 applications being applications made to a court and Section 34 applications to set aside arbitral awards are applications which are within Section 42.

(e) In no circumstances can the Supreme Court be "court" for the purposes of Section 2(1)(e), and whether the Supreme Court does or does not retain seisin after appointing an Arbitrator, applications will follow the first application made before either a High Court having original jurisdiction in the State or a Principal Civil court having original jurisdiction in the district as the case may be.

(f) Section 42 will apply to applications made after the arbitral proceedings have come to an end provided they are made under Part-I.

(g) If a first application is made to a court which is neither a Principal Court of original jurisdiction in a district or a High Court exercising original jurisdiction in a State, such application not being to a court as

defined would be outside Section 42. Also, an application made to a court without subject matter jurisdiction would be outside Section 42.

The Hon'ble Apex Court has categorically held that Section 42 of the Act of

1996 does not apply in the proceedings under section 11(6) as the Hon'ble Chief

Justice or his designate not being the Court as defined in the definition clause of

the Act of 1996. Section 42 of the Act of 1996 is reproduced herein under :-

"S.42. Jurisdiction. - Notwithstanding anything contained elsewhere in this Part or in any other law for the time being in force, where with respect to an arbitration agreement any application under this Part has been made in a Court, that Court alone shall have jurisdiction over the arbitral proceedings and all subsequent applications arising out of that agreement and the arbitral proceedings shall be made in that Court and in no other Court."

Therefore, this Court holds that the High Court, during the pendency of the

application under section 11(6) for appointment of Arbitrator, is not having any

jurisdiction to entertain any application under section 9 for grant of interim relief,

that is always the domain of the Civil Court as per the dictum of the Hon'ble Apex

Court and the statutory provisions. Therefore, both these applications sans merit

and are hereby dismissed. The applicant is at liberty to file an appropriate

application in accordance with law. Accordingly, all the pending applications are

disposed of.

12. At this stage, it is pointed out by the learned counsel for the parties that as

per clause-8.3 of Special Conditions of Contract, the seat of arbitration is agreed to

be at Bhopal.

13. In view of same, application filed by applicant is allowed and following

order is passed:-

(i) Hon'ble Shri Justice Alok Verma (Retd.), Address - Akar, HIG I/463, Arvind Vihar, Baghmogaliya, Bhopal (M.P.); Mob. No.79748-54407; e-mail ID :

[email protected], is appointed as Arbitrator to resolve the dispute between the parties in the case.

(ii) Arbitrator shall issue the notices and fix the date.

(iii) Parties are directed to deposit necessary charges and fees as per M.P. Arbitration Center (Domestic and International) Rule, 2019.

(iv) Director of Madhya Pradesh Arbitration Centre (Domestic and International, Jabalpur (M.P.D.I.A.C.) shall communicate the decision of this Court to the Sole Arbitrator.

(v) Other provisions of Section 15(3)(4) of the Arbitration and Conciliation Act, 1996 will apply to Substitute Arbitrator.

14. With aforesaid directions, arbitration case is disposed of.

Certified copy as per rules.

(DEEPAK KHOT) JUDGE

Priya.P

PRIYANKA DN: c=IN, o=HIGH COURT OF MADHYA PRADESH JABALPUR, 2.5.4.20=c0b1f7bb07af52df85e96a93de113e66c4 d07d9ffd473eedaf9de7c2efd2eb45, ou=HIGH COURT OF MADHYA PRADESH JABALPUR,CID -

PITHAWE 7040208, postalCode=482001, st=Madhya Pradesh, serialNumber=74e4e39d1c040fc71204b21f23bfef 429fde37d003f974c3a62be699711217be, cn=PRIYANKA PITHAWE Date: 2025.06.27 19:46:29 +05'30'