9911796707
TMI Blog2013 (5) TMI 401X X X X Extracts X X X X X X X X Extracts X X X X ..... bitration petition is an abuse of process of law and the claims made are barred by a long period of time and are, therefore, dead claims. 4. In order to decide the preliminary objection, it would be necessary to take note of certain relevant events. 5. The petitioner and the respondent had entered into and executed a contract dated 7th December, 2004 (effective from the date of issue of the firm order dated 6th August, 2004). The contract under Clause 27 provides for arbitration as the mechanism for resolution of any dispute that may arise between the petitioner and the respondent. The arbitration clause reads as under: "27 ARBITRATION 27.1 Except as otherwise provided elsewhere in the CONTRACT if any dispute, difference, question or disagreement arises, at any time before or after completion or abandonment of work, between the parties hereto or their respective representatives or assignees, at any time in connection with construction, meaning, operation, effect, interpretation or out of the CONTRACT or breach thereof the same shall be decided by an Arbitral Tribunal consisting of three Arbitrators. Each party shall appoint one Arbitrator and the Arbitrators so appointed shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s under: "26 JURISDICTION AND APPLICABLE LAW: This agreement including all matter connected with this Agreement, shall be governed by the laws of India (both substantive and procedural) for the time being in force and shall be subject to exclusive jurisdiction of the Indian Court at Mumbai. Foreign Companies, operating in Indian or entering into Joint ventures in India, shall have to obey the law of the Land and there shall be no compromise or excuse for the ignorance of the Indian legal system in any way." 6. The petitioner together with its affiliates is a leading oilfield service provider. It is trusted to deliver superior results and improved E&P performance for oil and gas companies around the world, including India. Through its well site operations, research and engineering facilities, it is working to develop products, services and solutions that optimize customer performance in a safe and environmentally sound manner. It employs over 113,000 people of more than 140 nationalities working in 85 countries, including India. 7. The respondent was desirous of hiring four sets of Measurement While Drilling (MWD) and one set of Gyro Equipment & Services (Gyro) collectively refe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 800001829B March 2006 41,406.00 800002119 September 2006 192,169.00 800002120B September 2006 63,729.00 800002860 September 2007 71,304.00 800002861B September 2007 96.00 800002862B September 2007 49,487.00 Total 667,023.00 9. The petitioner further claims that the respondent has refused to make payment against the aforesaid invoices. The respondent totally rejected the various Lost in Hole (LIH) claims of the petitioner. According to the petitioner, in the event of "Equipments" are lost, destroyed or damaged in the site well, the respondent is liable to pay the depreciated replacement value of the "Equipments" stuck/lost in the hole subject to a limit of 50% calculated from the date of first use of such "Equipments" in India. Furthermore, in terms of the Clause 17 of the Contract, the respondent was under an obligation to make an attempt to recover or retrieve the said tools but the respondent failed to discharge this obligation also. 10. Since no payment had been received, the petitioner sent a letter to the respondent on 11th July, 2008 demanding the payment of the outstanding amount. However, there was no response to the aforesaid communication. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Arbitration and Conciliation Act from 14th December, 2008 i.e. on expiry of 30 days from the first notice dated 14th November, 2008 invoking arbitration. Learned senior counsel submitted that the present petition ought to have been filed within a maximum period of 3 years from the said date, i.e., on or before 14th December, 2011 while the present petition has been filed on 11th January, 2013. Learned senior counsel emphasized that this Court would not entertain the present petition as it raises dead claims. The contract expired after the de-hiring of last unit on 21st October, 2007. The respondent had received the entire amount in the years 2006-07. Pointing out to the averments made in the counter-affidavit, Mr. Luthra submits that the letter dated 14th November, 2008, 21st May, 2009 and 11th August, 2010, which were written to ONGC, were not received in the concerned section of ONGC. The address in the contract for correspondence was given as ONGC Limited, Drilling Services, Mumbai Region, 3B, Vasundhara Bhavan, Bandra- East, Mumbai-51. This was changed to ONGC Limited, Drilling Services, Directional Drilling Section, Mumbai Region, 2nd Floor, 11-High, ONGC, Sion (W), Mumbai-400 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal on taking evidence, along with the merits of the claims involved in the arbitration. The Chief Justice has to decide whether the applicant has satisfied the conditions for appointing an arbitrator under Section 11(6) of the Act. For the purpose of taking a decision on these aspects, the Chief Justice can either proceed on the basis of affidavits and the documents produced or take such evidence or get such evidence recorded, as may be necessary. We think that adoption of this procedure in the context of the Act would best serve the purpose sought to be achieved by the Act of expediting the process of arbitration, without too many approaches to the court at various stages of the proceedings before the Arbitral Tribunal." 13. Relying on the aforesaid observations, the learned senior counsel has submitted that this Court would have to decide as to whether the petition is liable to be dismissed on the ground of limitation as it raises dead claims. It would not be necessary for this Court to leave the matter to be decided by the Arbitral Tribunal. 14. On the other hand, Mr. Sanjiv Puri, learned senior counsel appearing for the petitioner submits that the limitation stops runnin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m or whether the parties have, by recording satisfaction, exhausted all rights, obligations and remedies under the contract, so that neither the contract nor the arbitration agreement survived. When it is said that the Chief Justice or his designate may choose to decide whether the claim is a dead claim, it is implied that he will do so only when the claim is evidently and patently a long time-barred claim and there is no need for any detailed consideration of evidence. We may elucidate by an illustration: if the contractor makes a claim a decade or so after completion of the work without referring to any acknowledgment of a liability or other factors that kept the claim alive in law, and the claim is patently long time-barred, the Chief Justice or his designate will examine whether the claim is a dead claim (that is, a long time- barred claim). On the other hand, if the contractor makes a claim for payment, beyond three years of completing of the work but say within five years of completion of work, and alleges that the final bill was drawn up and payments were made within three years before the claim, the Court will not enter into a disputed question whether the claim was barred ..... X X X X Extracts X X X X X X X X Extracts X X X X
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