2023 (1) TMI 1352 - HC - Indian Laws

Appointment of Arbitrators - Section 11 of the Arbitration and Conciliation Act 1996 - HELD THAT - In the present case this Court need not devolve into this aspect any further since the petitioner itself has made an alternate prayer that though one petition under Section 11 of the Act has been filed the Arbitrator may be appointed separately for the four Agreements. In the present case as well though there is one Notice of Invocation given but it clearly states about the four Agreements and about the disputes between the parties. The Notice of Invocation dated 18th July 2018 may not have been artistically drafted but so long as it fulfills the objective this technical ground cannot be considered as a ground for disallowing the present petition. The respondents have made a reference to VIDYA DROLIA AND OTHERS VERSUS DURGA TRADING CORPORATION 2020 (12) TMI 1227 - SUPREME COURT to state that there are no arbitrable disputes under the Dealership Agreement as the petitioner has failed to follow the procedure as envisaged in Clause 13.4 of the Agreement which stipulates the parties to undergo a consultation before invoking arbitration. This argument also does not hold water for the simple reason that there is no specific procedure for consultation and so long as the parties were corresponding with each other about their disputes and a Notice was given for invoking arbitration the pre-requisite of consultation is essentially met. It may be observed that it is not a case where there are no arbitrable disputes. The parties may have approached NCLT or other Forums but the scope of adjudication before each of these Fora is independent and merely because the petitioner had approached Competition Commission of India or is a corporate debtor in the proceedings before the NCLT cannot be held to be a bar to raise the disputes for adjudication by way of arbitration. Considering that there is a valid Arbitration Agreement between the parties and in the light of the facts and discussions Hon ble Mr. Justice Manmohan Sarin Retired Chief Justice (Jammu Kashmir High Court) Mobile No. 9818000210 is hereby appointed as the Sole Arbitrator to adjudicate the disputes between the parties. Petition disposed off.

Summary

Issues Involved:
1. Maintainability of a composite arbitration petition for independent contracts.
2. Compliance with arbitration clauses and procedures in the agreements.
3. Jurisdiction and venue of arbitration.
4. Arbitrability of disputes given pending cases in other forums.
5. Validity and sufficiency of the Notice of Invocation of Arbitration.

Issue-wise Detailed Analysis:

1. Maintainability of a composite arbitration petition for independent contracts:
The petitioner sought a composite arbitration for four distinct contracts with two respondents. The court noted that although the agreements might be interdependent, they are independent contracts with distinct arbitration mechanisms. The court observed that referring all matters to a single arbitrator would be contrary to law and inconvenient. However, the petitioner's alternative prayer for separate arbitrators for each agreement was considered.

2. Compliance with arbitration clauses and procedures in the agreements:
The respondents argued that the arbitration clauses in each agreement required different procedures and mechanisms. For instance, the Dealership Agreement and DPFA required a three-member tribunal, while the FPFA and WCDCFA required a sole arbitrator. Additionally, the places of arbitration varied (Delhi, Gurgaon, or as determined by respondent No. 2). The court acknowledged these differences but noted that the Supreme Court allows courts to appoint arbitrators in exceptional circumstances where parties cannot agree on the procedure.

3. Jurisdiction and venue of arbitration:
The court emphasized that the venue of arbitration is a matter of convenience for the parties and does not affect the jurisdiction of the court to appoint an arbitrator. The parties had submitted to the jurisdiction of the Delhi High Court, making the venue differences irrelevant for the petition's maintainability.

4. Arbitrability of disputes given pending cases in other forums:
Respondents contended that the disputes were non-arbitrable as identical issues were pending before NCLT and had been adjudicated by the Competition Commission of India and NCLAT. The court clarified that the scope of adjudication in different forums is independent, and pending cases do not bar arbitration. The petitioner's status as a corporate debtor under CIRP does not preclude it from seeking arbitration.

5. Validity and sufficiency of the Notice of Invocation of Arbitration:
The respondents argued that the Notice of Invocation was insufficient and did not specify disputes. The court referred to precedents indicating that the notice's purpose is to inform the other party of the intention to arbitrate disputes. The court found that the petitioner's notice, though not perfectly drafted, fulfilled this objective.

Conclusion:
The court appointed Hon'ble Mr. Justice Manmohan Sarin, Retired Chief Justice, as the Sole Arbitrator to adjudicate the disputes. The parties were directed to contact the arbitrator within one week, and the arbitrator's fees would be fixed according to the Fourth Schedule of the A&C Act, 1996, or as consented by the parties. The petition was disposed of accordingly.