M/S.Eicher Motors Limited vs M/S.Forte Solutions Pvt. Ltd
2022 Latest Caselaw 14346 Mad

                                                                         Arb O.P(Com.Div.)No.269 of 2022



                                  IN THE HIGH COURT OF JUDICATURE AT MADRAS

                                                    Dated : 11.08.2022

                                                          CORAM

                                    THE HONOURABLE Mr.JUSTICE M.SUNDAR

                                           Arb O.P(Com.Div.)No.269 of 2022

                  M/s.Eicher Motors Limited
                  Having its registered office at
                  3rd Floor, Select Citywalk
                  A-3 District Centre, Saket,
                  New Delhi - 110 017.                                                ... Petitioner

                                                            vs.

                  M/s.Forte Solutions Pvt. Ltd.,
                  Having its Registered Office at
                  New No.20, Old No.16, 3rd Cross Street,
                  West CIT Nagar, Chennai-600 035.                               ... Respondent



                            Arbitration Original Petition filed under Section 11(6)(a) of the
                  Arbitration and Conciliation Act, 1996 to
                            (a) Appoint an arbitrator to adjudicate the disputes between the
                  petitioner and the respondent in terms of the Deputation Services Agreement
                  (Arbitration Agreement) dated 07.01.2020;
                            (b) Direct the respondent to pay costs;
                                   For Petitioner     :     Mr.R.Ananth
                                                            of M/s.King and Partridge (Law Firm)
                                                          *****

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https://www.mhc.tn.gov.in/judis
                                                                               Arb O.P(Com.Div.)No.269 of 2022




                                                      ORDER

This order will now dispose of the captioned matter.

2. This order has to be read in conjunction with and in continuation of

earlier proceedings made in the first listing of the captioned matter on

27.06.2022 which reads as follows:

'Captioned 'Arbitration Original Petition' ['Arb.OP' for the sake of brevity] has been presented in this Court on 10.06.2022 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 Arbitrator.

2. Mr.Joshua, learned counsel of M/s.King and Partridge (Law Firm) for sole petitioner is before this Court.

3. Learned counsel submits that captioned Arb.OP is predicated on Clause 16 of an agreement captioned 'DEPUTATION SERVICE AGREEMENT' dated 07.01.2020. To be noted, the aforementioned agreement shall hereinafter be referred to as 'primary contract' for the sake of convenience and clarity. Aforementioned Clause 16 of the primary contract captioned 'DISPUTE RESOLUTION' reads as follows:

'16. DISPUTE RESOLUTION Any and all disputes, differences or questions relating to or

https://www.mhc.tn.gov.in/judis Arb O.P(Com.Div.)No.269 of 2022

arising out of this Agreement, including without limitation, any questions relating to the existence, validity and enforceability of any of the provisions of this Agreement (together “Disputes”), will be submitted for arbitration under the provisions of the Arbitration and Conciliation Act, 1996 as amended from time to time, with each Party appointing one arbitrator each who in turn shall jointly decide on the third arbitrator. The place of arbitration shall be Chennai. The language of arbitral proceedings shall be English language. The decision of the arbitrator shall be final and binding on the Parties.'

4. Adverting to the aforementioned clause, learned counsel submits that the same serves as arbitration agreement between the petitioner and respondent being arbitration agreement within the meaning of Section 2(1)(b) read with Section 7 of A and C Act.

5. Learned counsel also submits that the Seat / Venue is Chennai. Therefore, this is the jurisdictional Court qua a Section 11 petition is learned counsel's say.

6. Be that as it may, learned counsel submits that when the primary contract was worked/operated, arbitrable disputes erupted between the petitioner and the respondent. The respondent had requested the petitioner to pay salaries to their employees. To be noted, the primary contract is for provision of employees by the respondent to the petitioner. Learned counsel submits that request for payment of salaries were made notwithstanding the monthly payments made to the respondent on the understanding that the same will be adjusted in the ensuing months but this did not happen. This, broadly stated is the

https://www.mhc.tn.gov.in/judis Arb O.P(Com.Div.)No.269 of 2022

arbitrable dispute that has arisen between the petitioner and respondent when the primary contract was operated. It is not necessary to dilate much on the arbitrable dispute as this is a Section 11 legal drill.

7. Adverting to a notice dated 13.12.2021, learned counsel submits that vide this notice, aforementioned arbitration agreement i.e., Clause 16 of the primary contract was invoked / triggered by the petitioner, the petitioner had nominated the arbitrator and sought for consent of the respondent but the notice has been left unclaimed. There is no reply either is learned counsel's further say.

8. Learned counsel submits that the claim of the petitioner is in the region of Rs.2 Crores as of today.

9. Prima facie case for issue of notice has been made out. Issue notice to respondent returnable in a fortnight i.e., returnable by 11.07.2022. Private notice permitted.

List on 11.07.2022.'

3. The above proceedings shall be read as an integral part and parcel of

this order. This means that short forms, short references and abbreviations

used in the aforementioned proceedings made in the previous listing shall

continue to be used in the instant order.

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4. Today, Mr.R.Ananth, learned counsel of M/s.King and Partridge

(Law Firm) who is before this Court, adverting to the aforementioned earlier

proceedings submits that there was difficulty in effecting service on the lone

respondent through conventional modes. Therefore, the captioned matter was

listed before learned Master for effecting service by resorting to substituted

service mode. Steps were taken before learned Master and service has since

been effected on lone respondent is learned counsel's say.

5. Captioned Arb OP is now before this Court pursuant to proceedings

of learned Master dated 04.08.2022 which reads as follows:

'Paper publication effected. Affidavit of service filed and verified. Service completed. List the matter on 11.08.2022 before the Hon'ble Judge's Court.'

6. Aforementioned 27.06.2022 proceedings captures the crux and

gravamen of the captioned Arb OP. It is is not necessary to dilate much on

facts as this is a Section 11 legal drill.

7. A legal drill under Section 11 of A and C Act should perambulate

within the statutory perimeter sketched by sub-section (6A) thereat which

https://www.mhc.tn.gov.in/judis Arb O.P(Com.Div.)No.269 of 2022

reads as follows:

'(6A) The Supreme Court or, as the case may be, the High Court, while considering any application under sub-section (4) or sub-section (5) or sub-section (6), shall, notwithstanding any judgment, decree or order of any Court, confine to the examination of the existence of an arbitration agreement.'

8. Aforementioned sub-section (6A) of Section 11 of A and C Act came

up for consideration before Hon'ble Supreme Court in oft-quoted Mayavati

Trading case law [Mayavati Trading Pvt. Ltd vs Pradyuat Deb Burman

reported in (2019) 8 SCC 714]. To be noted 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 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)

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

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takes this Court to Duro Felguera principle i.e., ratio in Duro Felguera S.A.

Vs 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 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. In the case on hand, as the respondent (in spite of being duly served

https://www.mhc.tn.gov.in/judis Arb O.P(Com.Div.)No.269 of 2022

albeit by resorting to substituted service) has not chosen to come before this

Court and dispute the existence of arbitration agreement. Therefore, the

prayer for appointment of sole arbitrator needs to be answered in the

affirmative as far as sub-section (6A) of Section 11 of A and C Act is

concerned.

11. Besides the statutory facet of Section 11 of A and C Act vide sub-

section (6A), two other facets have been put in place by way of judicial

pronouncements and they are N.N.Global principle [N.N.Global Mercantile

Pvt. Ltd., Vs. Indo Unique Flame Ltd., and others reported in 2021 SCC

Online SC 13] and Nortel principle [Bharat Sanchar Nigam Limited and

another Vs. Nortel Networks India Private Limited reported in (2021) 5

SCC 738]. To be noted, N.N.Global principle turns on arbitration clause

being contained in an agreement which is unstamped / insufficiently stamped /

not registered when it is compulsorily registrable. It is also to be noted,

Nortel principle turns on ex facie barred by limitation plea. As the lone

respondent has not chosen to come before this Court in spite of being duly

served, these facets do not arise for consideration in the case on hand.

Therefore, this Court proceeds to appoint a sole Arbitrator.

https://www.mhc.tn.gov.in/judis Arb O.P(Com.Div.)No.269 of 2022

12. In the light of the narrative thus far, Hon'ble Mr.Justice

M.Vijayaraghavan (Retd.), a former Judge, Madras High Court, residing at

Door No.2/15, Dr.T.V.Naidu Road, Flat No.2B, Abirami Foliage, Chetpet,

Chennai, Mobile No.9003268968, Phone No.:044-28365989 Email ID :

[email protected] 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 primary

contract i.e., DEPUTATION SERVICES AGREEMENT dated 07.01.2020

and render an award by holding sittings in the 'Madras High Court Arbitration

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.

13. Captioned Arb OP is disposed of in the aforesaid manner. There

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shall be no order as to costs.

11.08.2022

Speaking/Non-speaking order Index : Yes / No

mk

Note: Registry is directed to communicate a copy of this order forthwith to

1. Hon'ble Mr.Justice M.Vijayaraghavan (Retd.), former Judge, Madras High Court, Door No.2/15, Dr.T.V.Naidu Road, Flat No.2B, Abirami Foliage, Chetpet, Chennai.

Mobile No.9003268968, Phone No.:044-28365989 Email ID : [email protected]mail.com

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

M.SUNDAR. J.,

mk

https://www.mhc.tn.gov.in/judis Arb O.P(Com.Div.)No.269 of 2022

Arb O.P(Com.Div.)No.269 of 2022

11.08.2022

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