Madras High Court

Selvasundari vs M/S.Chennai Network ... on 13 April, 2022

                                                                                 O.P.No.394 of 2020



                                  IN THE HIGH COURT OF JUDICATURE AT MADRAS

                                                 Dated : 13.04.2022

                                                      CORAM

                                    THE HONOURABLE Mr.JUSTICE M.SUNDAR

                                                O.P.No.394 of 2020

                  1. Selvasundari
                     W/o.Late C.Sendil

                  2. S.Kiruthiga
                     D/o.Late C.Sendil

                  3. S.RathanMachendra
                     S/o.Late C.Sendil                                    ... Petitioners

                                                        vs.

                  1. M/s.Chennai Network Infrastructure Limited
                     Rep. by its Managing Director
                     City Centre 3rd Floor, 232/77 (186/303)
                     Purasaiwalkam High Road, Kilpauk
                     Purasaiwalkam, Chennai-600 010.

                  2. M/s.GTL Infrastructure Limited
                     Rep. by its Managing Director
                     City Centre, 3rd Floor, 232/77 (186/303)
                     Purasaiwalkam High Road, Kilpauk
                     Purasaiwalkam, Chennai-600 010.                   ... Respondents

                            Original Petition filed under Section 11(6) of the Arbitration and
                  Conciliation Act, 1996 praying to


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                                                                                        O.P.No.394 of 2020



                            (a) appoint an independent sole arbitrator to adjudicate the disputes
                  arising between the petitioner and the respondents in connection with or
                  relating to the License Agreement dated 16.08.2013;
                            (b) directing the respondent to pay the cost of this petition;
                                  For Petitioners     :Ms.N.Shalini
                                                       for Mr.S.Jaganathan
                                  For Respondents :    Mr.C.Sakthi Manikandan
                                                     *****
                                                    ORDER

This order will now dispose of the captioned 'Original Petition'

[hereinafter 'OP' for the sake of convenience and clarity] which has been

presented in this Court on 02.09.2020 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. Ms.N.Shalini, learned counsel representing the counsel on record for

the three petitioners and Mr.C.Sakthi Manikandan, learned counsel for both

respondents are before this Court.

3. Before proceeding further it is necessary to extract and reproduce

paragraph No.5 of counter affidavit filed by second respondent. I do so and

the same reads as follows:

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'5. I submit that during the subsistence of the above said license agreement, Chennai Network Infrastructure Ltd., (CNIL) has been merged with GTL Infrastructure Ltd., (the 2nd respondent herein) through a Scheme of Arrangement sanctioned/approved by the National Company Law Board at Chennai Bench order dated 13.12.2017 and National Company Law Board at Mumbai Bench order dated 15.12.2017. As per the above orders, all the CNIL sites/towers have been merged with GTL Infrastructure Ltd., Hence the respondent herein (GTL) stood substituted in the place of CNIL in the above said license agreement. Now certain disputes have arisen between the petitioners and the respondent herein, for which the petitioners herein have invoked the Arbitration Clause contained in the principal agreement (Lease Deed) dated 01.05.2004 and the license agreement dated 16.08.2013 and had filed this present application under Sec.11(6)(a) of the Arbitration and Conciliation Act.'

4. Mr.C.Sakthi Manikandan, learned counsel reiterates the aforesaid

position of merger and submits that he now represents both the respondents.

Therefore, all the three petitioners and two respondents in captioned OP are

represented by counsel.

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5. Learned counsel for petitioners submits that the captioned OP is

predicated on a 'Licence Agreement dated 16.08.2013' [hereinafter 'primary

contract' for the sake of convenience and clarity] and clause 16 thereat is a

arbitration clause and the same reads as follows:

'16. Any dispute or claim between the parties hereto arising out of or relating to this agreement or its implementations and / or its effect, or the breach, termination, due to efflux of time or otherwise or invalidity thereof, either during its subsistence or after its termination, shall be referred to the arbitration of a sole arbitrator in accordance with the provisions of Arbitrations and Reconciliation Act 1996. The Arbitration shall be held at Chennai.'

6. Aforementioned clause 16 in the primary contract serves as an

'Arbitration Agreement' between the petitioners and respondents i.e.,

Arbitration Agreement between the parties within the meaning of Section

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

7. Arbitrable disputes erupted qua primary contract, arbitration

agreement was triggered but it did not culminate in appointment of an

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arbitrator necessitating presentation of captioned OP in this Court. To be

noted, there is no disputation or disagreement between the counsel before me

in captioned OP on this aspect of the matter i.e., existence of arbitration

agreement. To be more precise, that aforementioned clause 16 of primary

contract serves as arbitration agreement between the parties is not subjected

to either disputation or contestation. However, to be noted, claims/arbitrable

disputes are disputed/contested and the same have to be adjudicated by an

Arbitrator who is to be appointed by this Court.

8. Captioned OP (as already mentioned supra) is under Section 11(6)

of A and C Act. A Section 11 legal drill has to perambulate within a tiny

legal landscape limited by sub-section (6A) legal perimeter thereat. This

principle has been laid down by Hon'ble Supreme Court in oft-quoted

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

Deb Burman reported in (2019) 8 SCC 714, relevant paragraph is

paragraph No.10 and the same 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

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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)

9. Aforementioned paragraph No.10 of Mayavati Trading case law

takes this Court to Duro Felguera principle i.e., M/s.Duro Felguera S.A.

Vs M/s. Gangavaram Port Limited reported in 2017 (9) SCC 729, relevant

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

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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.'

10. As there is no disputation, disagreement or contestation about the

existence of arbitration agreement between the three petitioners and two

respondents, Mr.Pawan Jhabhak, learned Advocate, No.115, Luz Church

Road, 1st Floor, Mylapore, Chennai-600 007, Mobile No.9176663600 is

appointed as sole Arbitrator. Learned sole Arbitrator is requested to enter

upon reference, adjudicate arbitrable disputes that have arisen between the

parties i.e., Licence Agreement dated 16.08.2013 and make an award by

conducting arbitration 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 the learned sole Arbitrator

shall be in accordance with the Madras High Court Arbitration Centre

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