Madras High Court
Asian Wind Energy Private Limited vs Also At on 27 April, 2022
Arb.O.P (Com.Div.) No. 25 of 2022
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 27.04.2022
CORAM
THE HON'BLE MR. JUSTICE M.SUNDAR
Arb.O.P (Com.Div.) No. 25 of 2022
Asian Wind Energy Private Limited,
SF No.746/1 & 2, 751/1 & 2
Manmangalam Village, Semmadai,
Karur, Tamil Nadu 639 006
Represented by its Managing Director. ... Petitioner
Vs.
Santha Spinning Mills Ltd.
119 Car Street,
Somanur, Coimbatore,
Tamil Nadu 641 668
Also at:
Kadayur Post,
Kangayam,
Tirupur Dt.,
Tamil Nadu 638 701. ... Respondent
Arbitration Original Petition filed under Section 11(6) of the
Arbitration and Conciliation Act, 1996 to appoint an arbitrator on behalf of
the respondent in terms of clause 13 of the Power Purchase Agreement
1/12
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Arb.O.P (Com.Div.) No. 25 of 2022
dated 24.09.2012 to adjudicate upon the disputes that have arisen between
the parties in relation to the said agreement.
For Petitioner : Ms.T.K.Vaishnavvi
for Mr.R.Parthasarathy
For Respondents: Mr.Adithya Reddy
ORDER
This order will dispose of captioned 'Arbitration Original Petition'
['Arb.OP' for the sake of brevity, convenience and clarity], which has been
presented in this Court under Section 11 of 'The Arbitration and Conciliation
Act, 1996 (Act No.26 of 1996)' [hereinafter referred to as 'A and C Act' for
the sake of brevity] with a prayer for appointment of an Arbitrator.
2. In the captioned Arb.OP, Hon'ble predecessor Judge issued notice
on 31.01.2022, lone respondent has been duly served, lone respondent has
entered appearance through a counsel and Mr.Adithya Reddy, learned
counsel for the lone respondent is before this Court.
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3. Ms.T.K.Vaishnavvi, learned counsel representing the counsel on
record for petitioner submits that captioned Arb.OP is predicated on an
agreement dated 24.09.2012 captioned 'POWER PURCHASE
AGREEMENT' [hereinafter 'PPA' or 'primary contract' for the sake of
convenience and clarity] and more particularly Clause 13 thereat. To be
noted, Clause 13 of the primary contract is captioned 'DISPUTE
RESOLUTION' and the same reads as follows:
'13. DISPUTE RESOLUTION
13.1 The parties shall endeavour to settle any dispute arising in
connection with the interpretation, performance, termination of this
PPA, or otherwise in connection with this PPA through friendly
consultations and negotiations.
13.2 If no settlement can be reached through consultations of the
senior corporate management of the parties within (30) days of the
dispute, either party may, be delivering a notice of the Dispute to
the other party, refer such matter to be settled by arbitration.
13.3 The dispute shall be settled under the Arbitration and
Conciliation Act, 1996 by Three Arbitrators appointed in
accordance with clause 13.4(c) below.
13.4 The parties agree with respect to such arbitration that:
(a) The Arbitration proceedings shall be conducted in
English.
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Arb.O.P (Com.Div.) No. 25 of 2022
(b) The place of arbitration shall be Karur.
(c) There shall be three Arbitrators, all of whom shall be
fluent in English. One arbitrator shall be appointed by the Power
Producer, one arbitrator by the User Member, and the third shall
be appointed by these two Arbitrators and shall serve as the
chairman of the arbitral tribunal.
(d) The Arbitration award shall be final and binding on the
parties, and enforceable in accordance with its terms. The
Arbitrators shall state reasons for their findings. The parties agree
to be bound thereby and to act accordingly.
(e) The costs of Arbitration shall be borne as determined in
the arbitration award. If the party is required to enforce an arbitral
award by legal action of any kind, the other party against whom
such legal action is taken shall pay all reasonable costs and
expenses and attorneys fees, including any cost of additional
litigation or arbitration taken by such party seeking to enforce the
award.
(f) When any dispute occurs which is submitted to arbitration,
except for the matter under dispute, the parties shall continue to
exercise their remaining respective rights and fulfil their remaining
obligations under this PPA.'
4. Learned counsel for petitioner submits that the primary contract
was operated, disputes erupted regarding alleged non-payment towards
power units that have been supplied by the petitioner to the respondent.
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Elaborating on this, learned counsel submits that the claim of the petitioner
is towards power units that were supplied to the respondent which were not
consumed/utilized but banked by the respondent. Respondent did not
honour the invoices for such power units and the claim is over Rs.76.21
lakhs is learned counsel's say. Captioned Arb.OP being one under Section
11, this Court refrains itself from expressing any opinion or view on the
merits of the claim. Suffice to say that the petitioner invoked the
aforementioned agreement by sending a communication dated 27.01.2021 to
the respondent and the respondent sent a reply dated 22.03.2021 inter alia
disputing the liability and contending that there is no arbitrable disputes as
according to the respondent there is no liability. On this again, this Court
refrains itself from expressing any opinion or view on the merits of the
matter as captioned Arb.OP is one under Section 11 of A and C Act.
5. Be that as it may, the following points are to be noted:
a) There is no disputation, disagreement or contestation
between the petitioner's and respondent's counsel regarding the
existence of the aforementioned arbitration agreement;
b) Disputations and contestations are only with regard to
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Arb.O.P (Com.Div.) No. 25 of 2022
the name of the petitioner and denial/resistance of the same by
the respondent;
c) The arbitration agreement mentions 'Karur' as the seat
[vide clause 13.4(b)] {to be noted, entire Clause 13 of
PPA/primary contract has been extracted and reproduced
supra}. Notwithstanding this, both learned counsel, on
instructions from their respective clients/litigants submit in one
voice in unison that the 'seat' can now be 'Chennai'. They also
go on to submit that the 'seat' and 'venue' shall now be Chennai.
This submission is recorded.
d) The arbitration agreement vide Clause 13.4(c) talks
about arbitration by a three member 'Arbitral Tribunal' ['AT']
but both counsel, on instructions from their respective
clients/litigants, further submit that AT may please be
downsized and a sole Arbitrator may please be appointed.
6. A careful perusal of the trigger notice dated 27.01.2021 from the
petitioner invoking the arbitration agreement (alluded to supra) brings to
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Arb.O.P (Com.Div.) No. 25 of 2022
light that the petitioner has suggested the name of a Hon'ble former Judge of
this Court as sole Arbitrator for the three member AT nominee of the
petitioner. Therefore, the request before this Court now is that it would be
desirable to have another former Hon'ble Judge of this Court to be appointed
as sole Arbitrator. This is more so as both sides agreed for downsizing and
this is solely as a matter of good order.
7. Before writing the operative portion of this order, this Court deems
it appropriate to remind itself that a legal drill under Section 11 of A and C
Act is circumscribed by sub-section (6A) thereat. In other words, a legal
drill under Section 11 should perambulate within the statutory perimeter
sketched by sub-section (6A) of Section 11 of A and C Act. This aspect of
the matter came up for consideration before Hon'ble Supreme Court in oft-
quoted Mayavati Trading case law i.e., Mayavati Trading Private Limited
Vs. Pradyuat Deb Burman reported in (2019) 8 SCC 714], relevant
paragraph in Mayavati Trading case law 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
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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 10 of Mayavati Trading case law takes
this Court to Duro Felguera, S.A case law i.e., Duro Felguera, S.A. Vs.
Gangavaram Port Limited reported in (2017) 9 SCC 729], relevant
paragraphs in Duro Felguera case law are paragraphs 47, 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
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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 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. '
9. In the light of the narrative thus far, this Court appoints Hon'ble
Mr.Justice V.Parthiban (Retd.,), a former Hon'ble Judge of this Court,
residing at No.5069, Z Block, 12 th Street, Anna Nagar (West), Chennai –
600 040 [Ph: 26280804, 26214850, Mob: 9444094401] as sole Arbitrator.
Hon'ble sole Arbitrator is requested to hold sittings in the 'Madras High
Court Arbitration and Conciliation Centre under the aegis of this Court'
(MHCAC), enter upon reference, adjudicate the question as to whether
arbitrable disputes arise/subsist at all qua primary contract (PPA), if yes
adjudicate upon the same and ultimately render an award as per Madras
High Court Arbitration Proceedings Rules 2017 and fee of the Hon'ble
Arbitrator shall be as per Madras High Court Arbitration Centre (MHCAC)
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(Administrative Cost and Arbitrator's Fees) Rules 2017.
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10. Captioned Arb.OP disposed of in the aforesaid manner. There
shall be no order as to costs.
27.04.2022
Speaking/Non-speaking order
Index : Yes / No
gpa/nsa
Note: The Registry is directed to communicate this order forthwith to
1. Hon'ble Mr.Justice V.Parthiban (Retd.,)
No.5069, Z Block, 12th Street,
Anna Nagar (West),
Chennai – 600 040
Ph: 26280804, 26214850, Mob: 9444094401
2.The Director
Tamil Nadu Mediation and conciliation Centre
-cum-
Ex Officio Member,
Madras High Court Arbitration Centre
Madras High Court, Chennai – 600 104.
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Arb.O.P (Com.Div.) No. 25 of 2022
M.SUNDAR.J.,
gpa
Arb.O.P (Com.Div.) No. 25 of 2022
27.04.2022
https://www.mhc.tn.gov.in/judis
