Reinforced Earth India Private ... vs Pink City Expressway Pvt. Ltd.
2022 Latest Caselaw 8383 Mad

                                                         1

                                  IN THE HIGH COURT OF JUDICATURE AT MADRAS

                                                DATE: 21.04.2022

                                                      CORAM

                                    THE HONOURABLE MR.JUSTICE M.SUNDAR

                                       Arb. O.P. (Com.Div.) No.108 of 2022


                     Reinforced Earth India Private Ltd.,
                     rep. by its Authorised Signatory
                     Samprathi Sreehari,
                     E-11, Block B 1 Extension,
                     Mohan Co-operative Industrial Estate,
                     New Delhi - 110 044.                                    ... Petitioner

                                                         Vs.

                     Pink City Expressway Pvt. Ltd., (PCEPL)
                     Having its registered office at
                     4th Floor, Chennai City Centre,
                     #10 and 11, Dr.Radhakrishnan Salai,
                     Mylapore, Chennai,
                     Tamil Nadu - 600 004.

                     also at
                     3rd and 4th Floor, Raheja Square,
                     Sector 1, Imt Manesar Industrial,
                     Gurgaon, Haryana - 122 050.                         ... Respondent



                                  Petition filed under Sections 11(4)(a) and 11 (6) of The
                     Arbitration and Conciliation Act, 1996 praying to appoint an arbitrator
                     to adjudicate the disputes between the petitioner and the respondent
                     in terms of Clause 16 of the agreement dated 29.10.2009 and direct
                     the respondent to pay costs.




https://www.mhc.tn.gov.in/judis
                                                                 2

                                     For Petitioner     : Mr.S.Adarsh

                                     For Respondent     : Mr.K.Jayaraman

                                                              ORDER

This order will now dispose of captioned Arb OP.

2. Mr.S.Adarsh, learned counsel for sole petitioner and

Mr.K.Jayaraman, learned counsel for lone respondent are before this

Court.

3. When the captioned Arb OP was first listed in the

Admission Board on 15.03.2022, the following proceedings were

made:

'Captioned 'Arbitration Original Petition' [hereinafter 'Arb OP' for the sake of convenience and clarity] has been presented in this Court on 22.02.2022 inter alia 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 an Arbitrator.

2. Mr.Adarsh.S, learned counsel on record for petitioner who is before this Court submits that captioned Arb OP is predicated on clause 16 of 'an agreement dated 29.10.2009' [page No.2 of the typed set of papers] [hereinafter 'primary agreement' for the sake of convenience and clarity].

https://www.mhc.tn.gov.in/judis

3. Learned counsel submits that primary agreement is between the petitioner and the respondent, it is for construction of reinforced Earth wall work/certain other structures in a National High Way, primary agreement ran into rough weather as according to the learned counsel, the petitioner had performed his obligations under primary agreement but respondent did not pay the consideration. At this prima facie stage, considering the fact that this is a Section 11 petition, suffice to say that broadly stated, this is the arbitrable dispute that has erupted between the parties qua primary agreement.

4. This Court is informed that a trigger notice dated 12.10.2020 (page No.106 of the typed set of papers) was issued, the same has been duly received by the respondent but it has evoked neither a reply nor a response, necessitating the presentation of captioned Arb OP on 22.02.2022 in this Court (as already alluded to supra).

5. In the light of the narrative thus far, issue notice to the respondent returnable in three weeks i.e., returnable by 05.04.2022. Private notice permitted. Private notice through all electronic modes of communications (subject to proof being demonstrated) also permitted.

6. List on 05.04.2022.'

https://www.mhc.tn.gov.in/judis

4. Both aforementioned learned counsel submit that the

trajectory/crux and gravamen of the matter has been correctly

captured in the above proceedings. However, this Court is informed

that post primary agreement i.e., post 29.10.2009 agreement, there

have been two amendment agreements, one dated 07.09.2010 and

another dated 24.11.2011 (first amendment agreement and second

amendment agreement respectively). Therefore, reference to 'primary

agreement' in this order from hereon and henceforth shall be a

collective reference of 29.10.2009 agreement, 07.09.2010 first

amendment agreement and 24.11.2011 second amendment

agreement and 29.10.2009 agreement shall be referred to as mother

agreement for the sake of clarity.

5. The other short forms and abbreviations used in the

proceedings made in the earlier listing on 15.03.2022 will continue to

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

6. Clauses 16 and 23 of the primary agreement (to be noted

clauses 16 and 23 in 29.10.2009 mother agreement) serve as

https://www.mhc.tn.gov.in/judis

arbitration agreement between the parties and the same read as

follows:

'16.DISPUTE RESOLUTION:

The parties hereto shall make every reasonable effort to settle amicably between themselves any dispute or difference arising out of this Agreement within a reasonable period of 30 days. In the event they being unable to settle such dispute the same shall be referred to arbitration in accordance with the provisions of the Arbitration and Conciliation Act, 1996 to be referred to the adjudication of a committee of three arbitrators. The committee shall be composed of one arbitrator to be nominated by each party and the two arbitrators shall jointly appoint a third arbitrator, who will act as Chairman of the committee of three arbitrators. The decision of the majority of arbitrators shall be final and binding on both parties.

23. JURISDICTION:

Any suit or proceedings relating to or arising out of this contract agreement shall be instituted in the Courts of Law at Chennai shall have jurisdiction to determine the same.'

7. To put it differently, aforementioned clauses 16 and 23 in

the primary agreement serve as arbitration agreement between the

parties i.e., arbitration agreement within the meaning of sub-section

https://www.mhc.tn.gov.in/judis

2(1)(b) of Section 7 of 'The Arbitration and Conciliation Act, 1996 (Act

No.26 of 1996)' [hereinafter 'A and C Act' for the sake of convenience

and clarity].

8. Though the lis i.e., arbitrable disputes that have erupted

qua primary agreement are subject to serious contestation by

respondent (to be noted, a thumbnail sketch of lis has been captured

in paragraph 3 of 15.03.2022 proceedings), there is no disputation

about the existence of arbitration agreement between the parties.

9. Owing to sub-section (6A) of Section 11 of A and C Act, a

legal drill under Section 11 is largely confined to examination of

existence of arbitration agreement. This principle has been laid down

by Hon'ble Supreme Court in the oft-quoted Mayavati Trading case

law i.e., Mayavati Trading Pvt. Ltd., Vs. Pradyuat Deb Burman

reported in (2019) 8 SCC 714. Relevant paragraph in Mayavati

Trading case law is Paragraph 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

https://www.mhc.tn.gov.in/judis

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.'

10. Aforementioned paragraph 10 of Mayavati Trading case

law takes us to Duro Felguera case law i.e., Duro Felguera Vs.

Gangavaram Port Ltd., reported in (2017) 9 SCC 729, relevant

paragraphs in Duro Felguera are paragraphs 47 and 59 and the same

read as follows:

'47. What is the effects 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. (supra) and Boghara Polyfab (supra). 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

https://www.mhc.tn.gov.in/judis

and purpose is essentially to minimize the Court’s intervention at the stage of appointing the arbitrator and this intention as incorporated in Section 11 (6A) ought to be respected. '

11. In the light of there being no disputation regarding

existence of arbitration agreement between the parties, this Court

proceeds to appoint a sole arbitrator. To be noted, arbitration

agreement provides for a three member Arbitral Tribunal but

considering the value of the claim and the nature of the dispute, the

Arbitral Tribunal is downsized (by consent) and a sole arbitrator is

appointed.

12. Before writing the operative portion of this order, it is

deemed appropriate to record the position that both learned counsel

submitted that the parties are exploring the possibility of settlement. It

is well open to the parties to continue before the sole arbitrator also

their endeavour as Section 30 of A and C Act aid the same.

13. As there is no disputation about the existence of

arbitration agreement, Mr.A.J.Jawad, Advocate, No.5/1, Jagajeevan

Ram Avenue, East Coast Road, Injambakkam, Chennai - 600 115

https://www.mhc.tn.gov.in/judis

(Mobile No.9840087114) is appointed as sole arbitrator. Learned sole

arbitrator is requested to enter upon reference, adjudicate the disputes

that have arisen between the petitioner and respondent qua

aforementioned primary agreement and render an award. The

arbitration shall be conducted in the Arbitration and Conciliation 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 Arbitrator's Fees), Rules 2017.

14. Captioned Arb OP is disposed of in the aforesaid manner.

There shall be no order as to costs.

21.04.2022

mmi

P.S.: Registry to communicate a copy of this order to

1. Mr.A.J.Jawad, Advocate, No.5/1, Jagajeevan Ram Avenue, East Coast Road, Injambakkam, Chennai - 600 115.

2. The Director, Tamil Nadu Mediation and Conciliation Centre, cum-Ex Officio Member Madras High Court Arbitration Centre, Madras High Court, Chennai-600 104.

https://www.mhc.tn.gov.in/judis

M.SUNDAR,J.,

mmi

Arb. O.P. (Com.Div.) No.108 of 2022

21.04.2022

https://www.mhc.tn.gov.in/judis