Madras High Court

Ms.Hemalatha Kesavan vs Mr.P.Ravindran on 11 April, 2022

                                                                         Arb.O.P (Com.Div).No.128 of 2022


                                  IN THE HIGH COURT OF JUDICATURE AT MADRAS

                                                    Dated : 11.04.2022

                                                          Coram

                                   THE HONOURABLE MR. JUSTICE M.SUNDAR

                                           Arb.O.P (Com.Div).No.128 of 2022


                    Ms.Hemalatha Kesavan
                    D/o.L.S.Parthasarathy
                    3/364, 9th Street
                    Venkateshwara Nagar, Kottivakkam
                    Thiruvanmiyur, Chennai – 600 041.                             ... Petitioner

                                                            vs.

                    1.Mr.P.Ravindran
                      S/o.Parthasarathy
                      No.6, 9th Cross Street
                      Indira Nagar, Adyar
                      Chennai – 600 020.

                    2.M/s.SARC Exports
                      Represented by its Partner
                      Mr.Albert Raj
                      S/o.Cheladurai
                      110, Raja Garden
                      Vanagaram, Chennai – 600 095.                               ... Respondents

                    Prayer:
                              Arbitration Original Petition filed under Section 11(5) of Arbitration
                    and Conciliation Act, 1996 to appoint an Arbitrator to resolve the dispute

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                                                                          Arb.O.P (Com.Div).No.128 of 2022


                    between the Petitioner and the Respondents arising out of and in connection
                    with the Memorandum of Understanding dated 24.03.2018.


                              For Petitioner     :   Mr.Sashidhar Sivakumar,
                                                                    for Ms.V.Pavitra

                              For Respondent     : Mr.C.K.M.Appaji


                                                        ORDER

This order will now dispose of the captioned Arb OP.

2.The proceedings made by this Court in the previous listing of

captioned Arb OP on 21.03.2022 is as follows:

'Captioned 'Arbitration Original Petition' [hereinafter 'Arb OP' for the sake of convenience and clarity] has been presented in this Court inter alia under Section 11(5) of 'The Arbitration and Conciliation Act, 1996 (Act No.26 of 1996)' [hereinafter 'A and C Act' for the sake of convenience and clarity] with a prayer for appointment of an arbitrator.

2.Mr.Sashidhar Sivakumar learned counsel appearing on behalf of Ms.V.Pavitra counsel on record, who is before this Court submits that the captioned Arb OP is predicated on clause 4 of a 'memorandum of understanding' ['MOU'] dated 24.03.2018 which shall hereinafter be referred to as 'primary

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contract' for the sake of convenience and clarity.

3.Learned counsel submits that the transaction is one of hand loan, inter alia owing to alleged default in repayment and disputation of the same arbitrable disputes have arisen, therefore a trigger notice dated 18.12.2021 was issued and this trigger notice met with a reply from respondent dated 22.01.2022 not accepting the nomination of arbitrator necessitating the presentation of captioned Arb OP in this Court on 28.02.2022.

4.Issue notice to respondents returnable in three weeks i.e., returnable by 11.04.2022. Private notice permitted.

5.List on 11.04.2022.'

3.The short forms and abbreviations used in the aforementioned

earlier proceedings (extracted and reproduced supra) shall continue to be

used in this order also for the sake of convenience and clarity. To be noted,

the earlier proceedings (reproduced supra) shall be read as an integral part

and parcel of this order.

4.Today, Mr.Sashidhar Sivakumar, learned counsel appearing on

behalf of Ms.V.Pavitra, learned counsel on record for the sole petitioner is

before this Court. Mr.C.K.M.Appaji, learned counsel with address for

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service at No.225, NSC Bose Road, Chennai – 600 001 who is before this

Court submits that he has instructions to file vakalatnama for both the

respondents and that he will file vakalatnama before the close of working

hours day after tomorrow i.e., before close of working hours on 13.04.2022.

5.Be that as it may, from the submissions made before this Court

today, it is clear that there is no disputation regarding existence of

Arbitration Agreement i.e., Clause 4 of Memorandum of Understanding

(MOU), dated 24.03.2018. This by itself is good enough to appoint a sole

arbitrator to dispose of the captioned Arb OP, owing to sub section (6A) of

Section 11 of A and C Act and elucidation of the same vide Mayavati

Trading case law i.e., Mayavati Trading Pvt. Ltd vs Pradyuat Deb

Burman reported in 2019 (8) SCC 714. Sub section (6A) of Section 11 of A

and C Act reads as follows:

'The Supreme Court or, as the case may be, the High Court, while considering any application under sub-section (4) or sub-section (5) or sub-section (6), shall, notwithstanding any judgment, decree or order of any Court, confine to the examination of the existence of an arbitration agreement.'

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6.The above sub section was elucidatively explained by Hon'ble

Supreme Court vide Mayavati Trading Pvt. Ltd vs Pradyuat Deb Burman

reported in 2019 (8) SCC 714. The relevant paragraph is paragraph No.10

and the same which is instructive reads as follows:

'10. This being the position, it is clear that the law prior to the 2015 Amendment that has been laid down by this Court, which would have included going into whether accord and satisfaction has taken place, has now been legislatively overruled. This being the position, it is difficult to agree with the reasoning contained in the aforesaid judgement, as Section 11(6-A) is confined to the examination of the existence of an arbitration agreement and is to be understood in the narrow sense as has been laid down in the judgement in Duro Felguera'

7.Aforementioned excerpted portion of Mayavati Trading case law

refers to Duro Felguera case law. To be noted, prior to Mayavati Trading

case law in M/s.Duro Felguera S.A. Vs M/s. Gangavaram Port Limited

reported in 2017 (9) SCC 729, the same principle was laid down and the

relevant paragraphs in Duro Felguera case law are paragraph Nos.47, 59

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and the same read as follows:

'47. What is the effect of the change introduced by the Arbitration and Conciliation (Amendment) Act, 2015 (hereinafter referred to as "the 2015 Amendment") with particular reference to Section 11(6) and the newly added Section 11(6-A) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as "the 1996 Act") is the crucial question arising for consideration in this case. ......

59. The scope of the power under Section 11(6) of the 1996 Act was considerably wide in view of the decisions in SBP and Co. and Boghara Polyfab. This position continued till the amendment brought about in 2015. After the amendment, all that the Courts need to see is whether an arbitration agreement exists – nothing more, nothing less. The legislative policy and purpose is essentially to minimize the Courts intervention at the stage of appointing the arbitrator and this intention as incorporated in Section 11(6-

A) ought to be respected.”

8.Mayavati Trading and Duro Felguera principles are elucidative,

instructive and they clearly set out the legal perimeter within which a legal

drill under Section 11 of A and C Act should be performed. This legal

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perimeter is short and the legal landscape is limited. It is limited to

examination of existence of Arbitration Agreement. In the case on hand,

there is no disputation about existence of Clause 4 of Memorandum of

Understanding (MOU), dated 24.03.2018 as already captured and alluded

to supra. Therefore, in the case on hand, legal drill under Section 11 qua

captioned Arb OP can be concluded by appointing a sole arbitrator.

9.Considering the narrative thus far, this Court appoints

Mr.R.Palaniandavan, Advocate having office at No.770-A, Lower Ground

Floor, Dewa Towers, Anna Salai, Chennai – 600 002 [Mobile:

9884110509] as sole arbitrator to enter upon reference, adjudicate the

arbitrable disputes that have arisen between the parties qua Memorandum of

Understanding (MOU), dated 24.03.2018. Learned sole arbitrator is

requested to enter upon reference, adjudicate arbitrable disputes that have

arisen between the petitioner and the respondents by holding sittings at

Madras High Court Arbitration Centre under the aegis of this Court

[MHCAC] in accordance with the Madras High Court Arbitration

Proceedings Rules, 2017 and Hon'ble Arbitrator's fee shall be as per Madras

High Court Arbitration Centre (MHCAC) (Administrative Cost and