Madras High Court
The Chief General Manager [Lpg vs M/S.Shri Vijaya Rgglv Indane Gas ... on 4 February, 2021
O.P.No.18 of 2021 and
A.No.51 of 2021
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Dated : 04.02.2021
CORAM:
THE HONOURABLE Mr.JUSTICE M.SUNDAR
O.P.No.18 of 2021
and
A.No.51 of 2021
1. The Chief General Manager [LPG],
Tamil Nadu State Office,
Indian Oil Corporation Ltd.,
Marketing Division, Southern Region,
Indian Oil Bhavan, 139, Mahatma Gandhi Road,
[Nungambakkam High Road],
Chennai-34.
2. The Chief Area Manager,
Indian Oil Corporation Ltd.,
Marketing Division,
Indane Area Office,
Triveni, IInd Floor, B.35 Sastri Road,
Thillai Nagar, Trichy-18.
... Petitioners
Vs.
M/s.Shri Vijaya RGGLV Indane Gas Services,
Represented by its Partner J.Sathyaraj,
Indane Distributor,
2/216 East Street, Mugaiyur,
Villupuram District.
... Respondent
1/9
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O.P.No.18 of 2021 and
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Prayer: Petition filed under Section 34(2)(B)(ii), Explanation 1 and (ii)
and (iii) and 2(A) and (B) (2) of the Arbitration and Conciliation Act, 1996,
as amended in 2019, praying to set aside the Arbitration Award dated
31.12.2019 passed by the Learned Arbitrator, which had arisen out of the
dispute between the petitioners and the respondent in so for allowing the
claims of the Respondent is concerned and also in disallowing the claims of
the Petitioners.
For Petitioners : Mr.AL.Somayaji
Senior Advocate
instructed by Mr.Vijaya Mehanath of
M/s.AAV Partners (Law Firm)
For Respondent : Mr.M.K.Kabir
Senior Counsel
instructed by Mr.S.Vijayakumar
***
ORDER
Read this in conjunction with and in continuation of earlier
proceedings made in previous listing on 25.01.2021, which reads as follows:
'Mr.A.L.Somayaji, learned Senior Advocate instructed by
Mr.M.Vijaya Mehanath of M/s.AAV Partners (Law Firm) on behalf
of petitioners and Mr.S.Vijayakumar, learned counsel for sole
respondent are before me in this web hearing on a video
conferencing platform.
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O.P.No.18 of 2021 and
A.No.51 of 2021
2. Learned counsel for caveator (to be noted, sole respondent
has lodged caveat) is before me in this web hearing on a video
conferencing platform.
3. When the matter was taken up, an interesting question
regarding jurisdiction propped up qua Arbitration agreement
between the parties. To be noted, arbitration agreement in the case
on hand i.e., arbitration agreement within the meaning of Section
2(1)(b) read with Section 7 of 'The Arbitration and Conciliation Act,
1996 (Act No.26 of 1996)' which shall hereinafter be referred to as
'A and C Act' for the sake of convenience and clarity is Clause 37 of
an agreement dated 24.08.2015 and that Clause 37 reads as follows:
'37 (a) All questions, disputes and differences
arising under or in relation to this Agreement shall be
referred to the sole arbitration of the Director (Marketing)
of the Corporation. If such Director (Marketing) is unable
or unwilling to act as the sole arbitrator, the matter shall
be referred to the sole arbitration or some other officer of
the Corporation by such Director (Marketing) in his place,
who is willing to act as such sole arbitrator. It is known to
the parties herein that the Arbitrator appointed hereunder
is an employee of the Corporation and may be shareholder
of the Corporation. The arbitrator to whom the matter is
originally referred, whether the Director (Marketing) or
officer, as the case may be on his being transferred or
vacating his office or being unable to act, for any reason,
the Director (Marketing) shall designate any other person
to act as arbitrator in accordance with the terms of the
Agreement and such person shall be entitled to proceed
with the reference from the stage at which it was left by his
predecessor. It is also the term of this Agreement that no
person other than the Director (Marketing) or the person
designated by the Director (Marketing) as aforesaid shall
act as arbitrator. The award of the Arbitrator so
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appointed shall be final, conclusive and binding on all the
parties to the Agreement and provisions of the Arbitration
& Conciliation Act, 1996 or any statutory modification or
re-enactment thereof and the Rules made thereunder and
for the time being in force shall apply to the arbitration
proceedings under this clause.
(b) The parties hereby agree that the Court in City
of TRICHY alone shall have jurisdiction to entertain any
application or other proceedings in respect of anything
arising under this agreement and any awards made by the
Sole Arbitrator or other proceedings in respect of
anything arising under this Agreement.'
4. 'Arbitral Tribunal' [hereinafter 'AT' for the sake of
convenience and clarity] was constituted by a sole Arbitrator, who is
a former Hon'ble Judge of this Court and he was appointed vide
order dated 01.02.2019 made in O.P.No.1119 of 2018.
5. Pursuant to the aforementioned order, AT conducted
arbitral proceedings in the Madras Arbitration Center under the
aegis of this Court.
6. Be that as it may, sub-clause (b) of Clause 37 supra, now
raises the interesting question regarding jurisdiction. The question
is whether captioned OP should be heard by this Court or it ought to
have been filed in the jurisdictional District Court in the City of
Trichy.
7. In the light of the above, this Court is inclined to issue
notice and Mr.S.Vijayakumar, learned counsel accepts notice on
behalf of sole respondent.
8. Learned Senior Advocate and learned counsel who has
accepted notice on behalf of sole respondent seek time to examine
this position and make submissions in the next listing. Be that as it
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may, though obvious, it is made clear that this jurisdiction issue will
be taken up first in the next listing.
9. List under the caption 'FOR FINAL
DISPOSAL/ARGUMENTS' on 04.02.2021.'
2. Today, in this web hearing on a video conferencing platform i.e.,
virtual court Mr.A.L.Somayaji, learned senior Advocate instructed by
Mr.M.Vijaya Mehanath of M/s.AAV Partners [Law Firm] on behalf of the
two petitioners and Mr.M.K.Kabir, learned senior counsel instructed by
Mr.S.Vijayakumar, learned counsel on record for sole respondent are before
me.
3. Adverting to aforementioned earlier proceedings dated 25.01.2021,
both learned senior counsel on instructions, submit in unison that a
supervisory Court with exclusive jurisdiction is the Court in the city of
Chennai.
4. In continuation of earlier proceedings made in previous listing on
25.01.2021, it will suffice to say that in Indus Mobile Distribution Private
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Limited Vs. Datawind Innovations Private Limited and Others reported in
(2017) 7 SCC 678, Hon'ble Supreme Court has made it clear that 'place'
occurring in sub sections (1) and (2) of Section 20 of 'The Arbitration and
Conciliation Act, 1996 (Act No.26 of 1996)' [hereinafter 'A and C Act' for
the sake of brevity] is 'Seat' i.e., juridical seat and 'place' occurring in sub
section (3) of Section 20 of A and C Act is 'Venue'.
5. Further in BGS SGS SOMA JV Vs. NHPC Limited reported in
(2020) 4 SCC 234, Hon'ble Supreme Court has held that when juridical seat
has been agreed upon by parties by exercise of party autonomy, it becomes
exclusive jurisdiction qua Supervisory Court.
6. In this regard, judgments of Hon'ble Supreme Court being
Mankastu Impex Private Limited Vs. Airvisual Limited reported in (2020)
5 SCC 399 and Hindustan Construction Company Limited Vs. NHPC
Limited and another reported in (2020) 4 SCC 310 are also of relevance as
BGS SGS SOMA principle i.e., seat determines exclusive jurisdiction of
supervisory court.
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O.P.No.18 of 2021 and
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7. In the light of the law laid down by Hon'ble Supreme Court in the
aforementioned case laws, both learned senior counsel submit that Clause 37
more particularly sub clause (b) of Clause 37 of the contract between the
parties being agreement dated 24.08.2015 sets out the juridical seat. Both
learned senior counsel also submit without any disputation and disagreement
that aforementioned Clause 37 of the agreement dated 24.08.2015 serves as
arbitration agreement between the parties being arbitration agreement within
the meaning of Section 2(1)(b) read with Section 7 of A and C Act as
articulated by this Court in paragraph 3 of earlier proceedings made in the
listing on 25.01.2021 (to be noted entire 25.01.2021 proceedings has been
extracted and reproduced supra).
8. Common submission made in unison by both sides is, captioned OP
may be rejected on the ground of lack of territorial jurisdiction albeit
preserving the rights of the petitioners to present a similar/same captioned
OP in the jurisdictional Court i.e., Court in the City of Trichy. Though
obvious, it is made clear that if the petitioners choose to approach the
jurisdictional supervisory Court, the said Supervisory Court shall deal with
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the matter on its own merits and in accordance with law uninfluenced by
anything expressed in this order except the articulation expressing lack of
territorial jurisdiction for this Court qua captioned OP.
9. Senior counsel for petitioners makes a request that the papers
constituting the case file including the original impugned award may please
be returned to the counsel on record for petitioners for the purpose of
presentation in the jurisdictional Supervisory Court. Registry is directed to
return the papers to the counsel on record on a written request from counsel
on record for petitioners at the earliest and in any event, within eleven (11)
days from today i.e., on or before 15.02.2021. To be noted, Registry to
return original impugned award also, under due acknowledgement.
10. Captioned Original Petition rejected albeit of on above terms.
There shall be no order as to costs. Consequently, connected Application
No.51 of 2021 is closed.
04.02.2021
Speaking order: Yes
Index: Yes
kmi
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O.P.No.18 of 2021 and
A.No.51 of 2021
M.SUNDAR.J.,
kmi
O.P.No.18 of 2021
and
A.No.51 of 2021
04.02.2021
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