M/S.Vijay Nirman Company Pvt. Ltd vs M/S.Edac Engineering Ltd
2022 Latest Caselaw 7775 Mad

Citation : 2022 Latest Caselaw 7775 Mad
Judgement Date : 13 April, 2022

Madras High Court

M/S.Vijay Nirman Company Pvt. Ltd vs M/S.Edac Engineering Ltd on 13 April, 2022

                                                                           Arb O.P(Com.Div.)No.3 of 2022



                                  IN THE HIGH COURT OF JUDICATURE AT MADRAS

                                                    Dated : 13.04.2022

                                                          CORAM

                                    THE HONOURABLE Mr.JUSTICE M.SUNDAR

                                           Arb O.P(Com.Div.)No.3 of 2022

                  M/s.Vijay Nirman Company Pvt. Ltd.,
                  Rep. by its Planning & Contracts Advisor
                  B.Murali                                                    ... Petitioner

                                                            vs.
                  M/s.EDAC Engineering Ltd.,
                  Rep. by its Managing Director
                  K.T.Vijaygopal
                  No.88, Mount Road
                  Guindy, Chennai-600 032.                                      ... Respondent

                            Original Petition filed under Section 11(6) of the Arbitration and
                  Conciliation Act, 1996 praying to appoint a sole Arbitrator in accordance
                  with Clause 14 of the Work Order dated 27.02.2015 to resolve the disputes
                  that have arisen between the petitioner and the respondent.
                                   For Petitioner     :      Dr.P.Vasudevan
                                   For Respondent     :      Mr.M.Aravind Subramaniam
                                                           *****

                                                          ORDER

Captioned 'Arbitration Original Petition' [hereinafter 'Arb OP' for the

sake of convenience and clarity] has been presented in this Court on

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08.10.2021 under Section 11(6) 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 a sole Arbitrator.

2. Dr.P.Vasudevan, learned counsel for sole petitioner and

Mr.M.Aravind Subramaniam, learned counsel for lone respondent are before

this Court.

3. Learned counsel for petitioner brings to notice of this Court that the

captioned Arb OP for appointment of a sole Arbitrator is predicated on a

clause in a work order i.e., Work Order dated 27.02.2015. Learned counsel

submits that relevant clause in this work order is clause 14 and the same

reads as follows:

'14.0 Settlement of disputes and Arbitration:

a) Any disputes or differences arising out-off or in connection with this Work Order shall be to the extent of possible settlement amicably between the parties, failing which all disputes shall be settled by arbitration in the manner provided hereunder.

b) Any dispute or difference which cannot be settled amicably between the parties arising out of this Work Order shall be finally resolved by arbitration as per the Arbitration and Conciliation Act

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1996.

c) The proceedings shall be carried out in English language and the seat of arbitration shall be in Chennai.'

4. It is submitted that the aforementioned clause 14 in the work order

serves as an Arbitration Agreement between the petitioner and respondent

Companies i.e., Arbitration Agreement between the parties within the

meaning of Section 2(1)(b) read with Section 7 of A and C Act.

5. There is no disputation or contestation about the existence of

arbitration agreement. However, arbitrable disputes that have erupted are in

the realm of disputations/contestation and the same have to be adjudicated

upon by a sole Arbitrator.

6. In the light of the narrative thus far, considering the limited legal

landscape of a legal drill under Section 11 of A and C Act, it is not necessary

to dilate on the arbitrable disputes. Suffice to say that the existence of

arbitration agreement is not disputed and therefore, in the light of sub-section

(6A) of Section 11 of A and C Act and applying Mayavati Trading principle

[Mayavati Trading Pvt. Ltd vs Pradyuat Deb Burman reported in (2019) 8

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SCC 714] and Duro Felguera principle [M/s.Duro Felguera S.A. Vs M/s.

Gangavaram Port Limited reported in 2017 (9) SCC 729] sole Arbitrator is

being appointed. To be noted relevant paragraph in Mayavati Trading

principle is paragraph No.10 and relevant paragraphs in Duro Felguera

principle are paragraph Nos.47 and 59 and these excerpted paragraphs read

as follows:

Paragraph No.10 of Mayavati Trading principle '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 judgments, 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 judgment in Duro Felguera SA.' (underlining made by this Court to supply emphasis and highlight)

Paragraph Nos.47 and 59 of Duro Felguera principle '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

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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.'

7. Sequitur is, Hon'ble Mr.Justice T.Ravindran (Retd.,), residing at

New No.27, Old No.12, 3rd Avenue, Indira Nagar, Adyar, Chennai - 600 020

[Mob: 9941350926, 9444399700] a former Judge of this Court is appointed

as sole Arbitrator. Hon'ble sole Arbitrator is requested to enter upon

reference, adjudicate arbitrable disputes that have arisen between the

petitioner and respondent qua aforementioned Work Order dated 27.02.2015

by holding the sittings in the 'Madras High Court Arbitration and

Conciliation Centre under the aegis of this Court' (MHCAC) as per Madras

High Court Arbitration Proceedings Rules 2017 and fee of Hon'ble sole

Arbitrator shall be in accordance with the Madras High Court Arbitration

Centre (MHCAC) (Administrative Cost and Arbitrator's Fees) Rules 2017.

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