TMI Blog2004 (2) TMI 382X X X X Extracts X X X X X X X X Extracts X X X X ..... sh Telecom Circle, placed Purchase orders for supply of various sizes of PIJF Cables, which the applicant supplied. It is the case of the applicant that though it made the entire supplies, the respondent has withheld 0.3% of the invoice value on the ground that transit insurance payment and proof thereof had not been given along with the bills. The applicant entered into correspondence with the respondent for release of the withheld amount, and ultimately on 15-4-2003 the applicant invoking the arbitration clause contained in the Tender Document, issued notice to the respondent calling upon them to appoint an Arbitrator. As the respondent failed to appoint the Arbitrator, the applicant filed this application praying to appoint an Arbitrator for resolution of the disputes. 3. Heard the learned counsel for the applicant and the learned Standing Counsel for the Central Government for the respondent. 4. The learned counsel for the applicant submitted that the applicant supplied the PIJF Cables as per the Purchase Orders placed by the respondent. However, certain disputes arose between the applicant and the respondent when the respondent withheld 0.3% of the invoice bill raised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion with regard to grant of Letter of Intents and placing of Purchase Orders in favour of the applicant was received at the registered office of the applicant at Secunderabad, and that apart, the Tender Document envisaged manufacture of PIJF Cables and provided for their inspection by the officials of the respondent at the premises of the applicant at Secunderabad, and inasmuch as, substantial part of cause of action in respect of the Tender had arisen at Secunderabad, he submits that this Court has jurisdiction to entertain the application filed by him for appointment of Arbitrator. The learned counsel for the applicant in support of his submission that this Court has jurisdiction to entertain the arbitration application, placed reliance on the judgment of a learned Single Judge of this Court in W.P. No. 26807 of 1997, dated 21-2-2003. 7. A reading of the averments made by the respondent in the counter-affidavit would make it apparent that there are disputes between the applicant and the respondent with regard to deduction of certain amounts from the invoices of the applicant towards transit insurance payment. The respondent does not dispute the fact that there is a arbitrati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h deal with the appointment of arbitrators may be analyzed. Section 11 of the Act reads : 11. Appointment of arbitrators . (1) A person of any nationality may be an arbitrator, unless otherwise agreed by the parties. (2) Subject to sub-section (6), the parties are free to agree on a procedure for appointing the arbitrator or arbitrators. (3) Failing any agreement referred to in sub-section (2), in an arbitration with three arbitrators, each party shall appoint one arbitrator, and the two appointed arbitrators shall appoint the third arbitrator who shall act as the presiding arbitrator. (4) If the appointment procedure in sub-section (3) applies and ( a )a party fails to appoint an arbitrator within thirty days from the receipt of a request to do so from the other party; or ( b )the two appointed arbitrators fail to agree on the third arbitrator within thirty days from the date of their appointment, the appointment shall be made, upon request of a party, by the Chief Justice or any person or institution designated by him. (5) Failing any agreement referred to in sub-section (2), in an arbitration with a sole arbitrator, if the parties fail to agree on the arbitrato ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... India . ( b ) Where the matters referred to in sub-sections (4), (5), (6), (7), (8) and (10) arise in any other arbitration, the reference to Chief Justice in those sub-sections shall be construed as a reference to the Chief Justice of the High Court within whose local limits the principal civil court referred to in clause ( e ) of sub-section (1) of section 2 is situate and, where the High Court itself is the Court referred to in that clause, to the Chief Justice of that High Court. Be it noted that the applicant had moved this application invoking the provisions of sections 11(5) and (6) of the Act. Sub-sections (1) to (3) of section 11 deal with the appointment procedure. While sub-sections (4) to (6) of section 11, which confer jurisdiction on the Courts to appoint an arbitrator, come into play when the parties fail to agree on the appointment of an arbitrator as required by the appointment procedure. Section 11(7) gives finality to decision of the Chief Justice or the person or institution designated by him in respect of matters contained in sub-sections (4) or (5) or (6). Sub-section (8) lays down that in the appointment of arbitrator, the Chief Justice or the person o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of India in respect of international commercial arbitration and such expression shall be construed as a reference to the Chief Justice of the High Court within whose local limits the principal Civil Court referred to in clause ( e ) of sub-section (1) of section 2 is situate, in respect of any other arbitration. It is appropriate here to consider the definition of "Court" as enjoined under clause ( e ) of sub-section (1) of section 2 which reads as under : " court means the principal civil court of original jurisdiction in a district, and includes the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject-matter of the arbitration if the same had been the subject-matter of a suit , but does not include any civil court of a grade inferior to such principal civil court, or any Court of small causes." [Emphasis supplied] 11. It is obvious, therefore, that in all cases where international commercial arbitration arise, the expression "Chief Justice" shall be construed as Chief Justice of India and in all other cases of arbitration, the expression "Chief Justice" shall be construed as Chief Justice of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontract shall be governed by Indian Laws and Courts at Delhi/New Delhi will have jurisdiction to entertain any dispute or claim arising out of this tender till issue of authorization letters to Circles for placement of Purchase Orders (P.Os)." A bare reading of the above clause would make it clear that the Courts at Delhi/New Delhi will have jurisdiction to entertain any dispute or claim arising out of the Tender only till the issuance of authorization letters to Circles for placement of Purchase Orders. The aforementioned clause is silent as regards the conferment of jurisdiction on the Courts at Delhi/New Delhi with respect to the disputes that may arise after issuance of authorization letters to Circles for placement of Purchase Orders. The jurisdiction of the Courts at Delhi/New Delhi to entertain any dispute or claim arising out of the Tender, should terminate immediately after the issuance of authorization letters, to Circles for placement of Purchase Orders and not extend beyond that. The respondent does not dispute the fact that the disputes which the applicant sought to raise for reference to the Arbitrator have arisen subsequent to the placing of the Purchase Orders and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15. Section 11(11) of the Act provides that where more than one request has been made under sub-section (4) or (5) or (6) to the Chief Justices of different High Courts of their designates, the Chief Justice or his designate to whom the request has been first made under the relevant sub-section shall alone be competent to decide on the request. It is not disputed before the Court, that the applicant first knocked the doors of this Court making request for appointment of Arbitrator and no request was made either at the Courts at Delhi/New Delhi or Bhopal, and having regard to the provisions of section 11(11) of the Act read with section 20( c ) of the Code of Civil Procedure, 1908 as part of a cause of action, had arisen within the State of Andhra Pradesh, this Court would have jurisdiction to appoint an Arbitrator. Therefore, this Court would be well within its jurisdiction to entertain the application for appointment of an Arbitrator for resolution of the disputes between the parties through the process of arbitration. A learned Single Judge of this Court while negativing similar contention raised by this very same respondent arising out of similar Tender as to jurisdiction of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 in section III sets out the modalities of inspection and tests and empowers the purchaser or his representative to inspect and test the goods as per the prescribed test schedule for their conformity to the specifications and further stipulates that the purchaser, when it decides to conduct such tests on the premises of the supplier or his sub-contractor, all reasonable facilities and assistance such as testing instruments and other test gadgets including access to drawing and production data shall be furnished to the inspector by the supplier or its sub-contractor, as the case may be and at no charge to the purchaser. In the context of the agreement between the petitioner and the respondents the manufacture and inspection of the goods is at Hyderabad. This apart, the LOI dt. 22-1-1997, the purchase order of the 2nd respondent 5-3-1997 and the impugned amendment order issued by the 2nd respondent dated 5-5-1997, have also been received at Hyderabad by the petitioner. In the considered view of this court these facts alleged by the petitioner, not denied by the respondents and apparent from the record constitute arisal of a part of the cause of action within the jurisdiction of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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