Madras High Court
Sikka Motors Pvt Ltd vs Hyundai Motor India Ltd. on 5 July, 2022
ARB.OP.(Com.Div) No.296 of 2022
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 05.07.2022
CORAM
THE HON'BLE Mr.JUSTICE M.SUNDAR
ARB.OP.(Com.Div) No.296 of 2022
Sikka Motors Pvt Ltd.,
Rep. by its Managing Director,
Sikka House, C-20, Preet Vihar,
Vikas Marg, New Delhi-110 092.
... Petitioner
-Vs-
Hyundai Motor India Ltd., (HMIL),
Unit No.602-606, 6th Floor,
Elegance Tower, Plot No.8,
Commercial Centre,
Jasola, New Delhi-110 025.
...Respondent
Prayer: Original Petition filed under Section 11(6) of The Arbitration and
Conciliation Act, 1996 to appoint a Sole Arbitrator to decide the dispute
between the Petitioner and the Respondent in accordance with Dealership
Agreement dated 24.10.2016.
For Petitioner : Mr.M.S.Krishnan
Senior Counsel
instructed by Mr.M.Aravind Subramaniam
For Respondent : Mr.Thriyambak J.Kannan
of M/s.Khaitan & Co
led by Mr.P.S.Raman
Senior Counsel
****
1/9
https://www.mhc.tn.gov.in/judis
ARB.OP.(Com.Div) No.296 of 2022
ORDER
Captioned Arb OP has been presented in this Court on 01.07.2022
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 convenience,
clarity and brevity] with a prayer for appointment of a Sole Arbitrator.
2. Mr.M.S.Krishnan, learned senior advocate instructed by
Mr.M.Aravind Subramaniam counsel on record for the petitioner is before this
Court. Mr.Thriyambak J.Kannan of M/s.Khaitan & Company [Law Firm] (led
by Mr.P.S.Raman, senior advocate) is before this Court. Mr.Thriyambak
J.Kannan of M/s.Khaitan & Company accepts notice on behalf of lone
respondent, with the consent of learned counsel on both sides main Arb OP is
taken up.
3. This Court is informed by learned counsel on both sides without any
disputation or disagreement that captioned Arb.OP is predicted on Clause 11
[captioned 'ARBITRATION'] of an agreement dated 24.10.2016 captioned
'DEALERSHIP AGREEMENT' (hereinafter 'primary contract' for the sake of
convenience and clarity).
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ARB.OP.(Com.Div) No.296 of 2022
4. To be noted, primary contract is between the petitioner and
respondent, it inter alia pertains to dealership qua sales, service of
Automobiles, spares manufactured by respondent before this Court. It is not
necessary to dilate further on facts owing to the limited statutory perimeter
within which a legal drill under Section 11 of A and C Act has to perambulate.
5. Aforementioned Clause 11 [captioned 'ARBITRATION'] of primary
contract reads as follows:
'11. ARBITRATION
All questions, differences, controversies or disputes whatsoever
between the PARTIES or their representatives touching upon
responsibilities and obligations of the PARTIES or any matter
connected with the terms of this Agreement, whether as to
construction or otherwise, shall be referred to arbitration of a
Sole Arbitrator to be appointed by HMI. The provisions of the
Indian Arbitration & Conciliation Act, 1996 or any other re-
enactments or statutory modifications thereof for the time being
in force shall be applicable for settlement of the dispute,
controversies or differences. The decision of the Sole Arbitrator
shall be final and binding on the Parties. The venue of the
arbitration shall be Chennai and the language of arbitration
shall be English. The arbitration proceedings will be on a fast
track basis.'
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ARB.OP.(Com.Div) No.296 of 2022
6. Learned Senior counsel on both sides, on instructions submit that
there is no disputation about the existence of aforementioned Clause. In other
words aforementioned Clause 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, there is no disputation
about the existence of arbitration agreement is their common say. In the light
of statutory perimeter sketched by sub-section (6A) of Section 11 of A and C
Act, this by itself makes the task of disposal of captioned Arb OP fairly simple
but capturing the trajectory the matter has taken (broadly though) in a nutshell
is necessary for completion of facts narrative.
7. It is common say of both sides that arbitrable disputes erupted
between the petitioner and respondent qua primary contract owing to which
the petitioner before this Court approached Delhi High Court by way of an
application under Section 9 of A and C Act, parties were referred to
Mediation, the matter reverted to the Court and ultimately, a Hon'ble Division
Bench of Delhi High Court presided by Hon'ble Mr.Justice Rajiv Shakdher in
and by an order dated 06.05.2022 made it clear that Delhi High Court would
not be the supervisory Court or curial Court for that matter. This order was
carried to Hon'ble Supreme Court (by the petitioner before me) and before
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ARB.OP.(Com.Div) No.296 of 2022
Hon'ble Supreme Court, the petitioner withdrew the Special Leave Petition on
02.06.2022, wherein Hon'ble Supreme Court had preserved the liberty of the
petitioner to pursue further remedies before 'appropriate forum'.
8. This Court, having broadly captured the trajectory the matter has
taken in reaching this Court vide captioned Arb OP, now proceeds to straight
away appoint a sole Arbitrator as there is no disputation or disagreement
between the parties about the existence of arbitration agreement and there is
no ex facie barred by limitation argument [Nortel principle either i.e., Bharat
Sanchar Nigam Limited and another Vs. Nortel Networks India Private
Limited reported in (2021) 5 SCC 738]. This does not mean that limitation
issue will not fall for consideration before Arbitral Tribunal if it is raised by
either of the parties.
9. Before proceeding further and writing the operative portion of this
order, this Court deems it appropriate to remind itself of oft quoted Mayavati
Trading i.e., Mayavati Trading Pvt. Ltd vs. Pradyuat Deb Burman reported
in (2019) 8 SCC 714, relevant paragraph 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
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ARB.OP.(Com.Div) No.296 of 2022
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)
10. Aforementioned Paragraph 10 of Mayavati Trading principle takes
this Court to Duro Felguera principle i.e., Duro Felguera S.A. Vs
Gangavaram Port Limited reported in 2017 (9) SCC 729. Relevant
paragraphs in Duro Felguera principle are paragraphs 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
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ARB.OP.(Com.Div) No.296 of 2022
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.'
11. Aforementioned Mayavati Trading and Duro Felguera principles
make it clear that the scope of a legal drill under Section 11 is limited to
examination of existence of arbitration agreement and the narrative thus far
will make it clear that there is no disputation or disagreement qua existence of
arbitration agreement.
12. Therefore, Hon'ble Mrs.Justice R.Banumathi (Retd.), former Judge
of Hon'ble Supreme Court of India at No.C20, Ground Floor, Defence Colony,
New Delhi-110 024, (Mob: 7042955477 and 7397329476, e-
mail:[email protected]) is appointed as sole Arbitrator. Hon'ble
sole Arbitrator is requested to enter upon reference qua primary contract dated
24.10.2016 between the petitioner and respondent, adjudicate upon the
arbitrable disputes that have arisen between the petitioner/ respondent and
render an award by holding sittings at 'Madras High Court Arbitration Centre
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ARB.OP.(Com.Div) No.296 of 2022
under the aegis of this Court' (MHCAC) in accordance with Madras High
Court Arbitration Proceedings Rules 2017, fee of Hon'ble 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 disposed of in aforesaid manner. There shall be
no order as to costs.
05.07.2022
kmi
Note: The Registry is directed to communicate this order forthwith to
1. Hon'ble Mrs.Justice R.Banumathi (Retd.),
Former Judge of Hon'ble Supreme Court of India
No.C20, Ground Floor, Defence Colony,
New Delhi-110 024,
(Mob: 7042955477 and 7397329476,
e-mail:[email protected])
2. The Director,
Tamil Nadu Mediation and Conciliation Centre -cum-
Ex-Officio Member,
Madras High Court Arbitration Centre,
Madras High Court,
Chennai 600 104.
Note: Upload forthwith
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ARB.OP.(Com.Div) No.296 of 2022
M.SUNDAR, J
kmi
Arb.OP.(Com.Div) No.296 of 2022
05.07.2022
https://www.mhc.tn.gov.in/judis
