Madras High Court
C.Velusamy vs K.Indhera on 19 April, 2022
Arb. O.P.(Com.Div.)No.2 of 2022
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Dated : 19.04.2022
CORAM
THE HONOURABLE Mr.JUSTICE M.SUNDAR
Arb. O.P.(Com.Div.)No.2 of 2022
C.Velusamy
S/o.Chellappan
No.4/1, Annapoorani Nagar
Palani Andavar Mill (back side)
Udumalpet, Thiruppur District. ... Petitioner
vs.
K.Indhera
D/o.Mr.G.Krishnaswamy
No.3, Nehru Street
Opp. to Annavasal Hotel
Udumalpet 642 126. ... Respondent
Arbitration Original Petition filed under Section 11(6) of the
Arbitration and Conciliation Act, 1996 praying
(i) to appoint a sole Arbitrator or Arbitrators for the settlement of
disputes between the petitioner and the respondent in accordance with
Clause 11 of the Memorandum of Understanding dated 24.03.2021;
(ii) to direct the respondents to pay the costs;
For Petitioner : Mr.C.Mohan
for Ms.B.Manjula
For Respondent : Mr.C.P.Sivamohan
for Mr.Pranava Charan
*****
1/7
https://www.mhc.tn.gov.in/judis
Arb. O.P.(Com.Div.)No.2 of 2022
ORDER
Captioned 'Arbitration Original Petition' [hereinafter 'Arb OP' for the
sake of convenience and clarity] has been presented in this Court on
15.12.2021 under Section 11 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 sole Arbitrator/Arbitrators.
2. Mr.C.Mohan, learned counsel representing the counsel on record for
sole petitioner and Mr.C.P.Sivamohan, learned counsel representing the
counsel on record for lone respondent are before this Court.
3. Both learned counsel submit that the captioned Arb OP is predicated
on clause 11 of a 'Memorandum of Understanding [MOU] dated 24.03.2021'
[hereinafter 'primary contract and / or MOU' for the sake of convenience and
clarity] between the petitioner and respondent.
4. Clause 11 of primary contract and / or MOU reads as follows:
'11. Both the parties agree with any disputes arising out this
Memorandum of Understanding shall be resolved by Sole Arbitrator
https://www.mhc.tn.gov.in/judis
Arb. O.P.(Com.Div.)No.2 of 2022
mutually agreed by both parties herein. The seat of Arbitration
shall be in the city of Coimbatore and the Arbitration shall be
conducted in English language.'
5. There is no disputation or contestation that the aforementioned
clause 11 of primary contract and / or MOU serves as an Arbitration
Agreement between the petitioner and respondent i.e., 'Arbitration
Agreement' within the meaning of Section 2(1)(b) read with Section 7 of A
and C Act.
6. This Court is informed that primary contract and / or MOU was
operated and while it was operated certain arbitrable disputes erupted.
Suffice to say that primary contract and / or MOU pertains to one party
paying out creditors and taking out properties under mortgage and arbitrable
disputes centers around the other party now wanting to make pay out on its
own and the same being resisted. It is made clear that no opinion or view on
the merits of the matter is expressed in this order as this is a Section 11 legal
drill.
7. A Section 11 legal drill is largely confined to limited landscape qua
https://www.mhc.tn.gov.in/judis
Arb. O.P.(Com.Div.)No.2 of 2022
statutory perimeter of existence of Arbitration Agreement owing to sub-
section (6A) 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 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)
8. 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
https://www.mhc.tn.gov.in/judis
Arb. O.P.(Com.Div.)No.2 of 2022
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.'
9. As there is no disputation or contestation regarding the existence of
Arbitration Agreement, this Court now proceeds to appoint a sole Arbitrator
leaving open all the questions to be decided by sole Arbitrator.
10. Mr.J.V.Raj, learned District Judge (Retired), at No.E10-,
Sangmithra Garden, Next to Krishna Park, Nehru Nagar West, Kalapatti
Main Road, Coimbatore - 641 048 Mobile Nos.9445436345, 9442544255 is
https://www.mhc.tn.gov.in/judis
Arb. O.P.(Com.Div.)No.2 of 2022
appointed as a sole Arbitrator. The learned sole Arbitrator is requested to
enter upon reference, hold sittings in Coimbatore, adjudicate upon the
arbitrable disputes that have arisen between the petitioner and respondent
qua primary contract and / or MOU dated 24.03.2021 and make an arbitral
award. The procedure shall be governed in accordance with 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.
11. Captioned Arb OP is disposed of in the aforesaid manner. There
shall be no order as to costs.
19.04.2022
Speaking/Non-speaking order
Index : Yes / No
mk
Note: Registry is directed to communicate a copy of this order forthwith to
Mr.J.V.Raj, learned District Judge (Retired),
at No.E10-, Sangmithra Garden,
Next to Krishna Park,
Nehru Nagar West,
Kalapatti Main Road,
Coimbatore - 641 048.
M.SUNDAR. J.,
https://www.mhc.tn.gov.in/judis
Arb. O.P.(Com.Div.)No.2 of 2022
mk
Arb. O.P.(Com.Div.)No.2 of 2022
19.04.2022
https://www.mhc.tn.gov.in/judis
