TMI Blog2009 (5) TMI 974X X X X Extracts X X X X X X X X Extracts X X X X ..... rectly from Malaysia or through traders and brokers; the plaintiff in or about July, 2008 contacted and made enquiries from two Indian brokers (who have not been impleaded as parties to the suit) of the price and availability of Palm Oil; the said brokers offered the rates and also informed the required goods being readily available with the defendant No. 1 a Singapore based Company. It is the case of the plaintiff that though it had only made enquiries but it was surprised to receive three several Sales Contracts of which two were dated 24th July, 2008 and one 7th August, 2008 from the defendant No. 1. The plaintiff pleads that immediately on receipt of the Sale Contracts aforesaid it made enquiries from the brokers and informed the brokers that the plaintiff was then not in a position to establish Letter of Credit and was thus not in a position to enter into any contract as forwarded by the defendant No. 1. It is the case of the plaintiff that upon the plaintiff so informing the brokers, and the plaintiff having thus not accepted the contracts, no concluded contract came into being between the plaintiff and the defendant No. 1. At this stage, it may be stated that the written con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laintiff other than Mr. Manoj Agarwal. According to the brokers the contracts had been entered into by them on behalf of the plaintiff acting through Mr. Manoj Agarwal, with the defendant No. 1 validly. The plaintiff has in the plaint contended the said brokers to be of the defendant No. 1 and not of the plaintiff. 6. It appears that the defendant No. 1 lodged a claim with PORAM (Palm Oil Refiners Association of Malaysia) who have been impleaded as the defendant No. 2 in the suit and who in accordance with their Rules of arbitration requested the plaintiff to nominate its arbitrator. 7. The plaintiff again replied that it had not entered into any agreement and had not signed any arbitration agreement and thus there can be no question of reference of any dispute to arbitration. The plaintiff has also pleaded of one En. Mohamed Abd Majed being appointed as the arbitrator by the defendant No. 1 and alleged the same being part of a racket. It is argued that the same En. Mohamed Abd Majed has been appointed arbitrator in similar transactions qua other importers of Palm Oil in India also. It is alleged that the defendants are in collusions with certain brokers in India and are simi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uit in question had been filed for a declaration that there does not exist any arbitration Clause and as such the arbitral proceedings are without jurisdiction. The learned Single Judge of Bombay High Court came to hold that in view of Section 5 of the Arbitration and Conciliation Act, 1996 read with Section 16 thereof since the arbitral Tribunal has the power and jurisdiction to make rule on its own jurisdiction, the Civil Court would not pass any injunction against an arbitral proceeding. 2. Mr. Dave, the learned Senior Counsel appearing for the petitioner contends that the jurisdiction of the civil Court need not be inferentially held to be ousted unless any statute on the face of it excludes the same and judged from that angle when a party assails the existence of an arbitration agreement, which would confer jurisdiction on an arbitral Tribunal, the Court committed error in not granting an order of injunction. There cannot be any dispute that in the absence of any arbitration Clause in the agreement, no dispute could be referred for arbitration to an arbitral Tribunal. But, bearing in mind the very object with which the Arbitration and Conciliation Act, 1996 has been enacted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... est of either party required to refer the parties to arbitration unless it finds that the said agreement is null and void, inoperative or incapable of being performed. C. Reliance is also placed on para 18 of S.B.P. Co. v. Patel Engineering Ltd. AIR 2006 SC 450 to contend that the court looses the jurisdiction only when the other party applies for reference to arbitration owing to existence of an arbitration agreement; else the suit is maintainable. D. The Counsel for the plaintiff in CS(OS) No. 1101/2009 has in support of the aforesaid proposition also referred to Roshan Lal Gupta (supra) and Ministry of Sound International Ltd. v. Indus Renaissance Partners 156 (2009) DLT 406 also holding that the suit even if subject matter thereof is subject matter of arbitration agreement is not barred at the threshold. E. The senior Counsel for the plaintiff also relies on order dated 17th April, 2009 in CS(OS) No. 682/2009 Union of India v. Cairn Energy India Pty. Limited whereby a Single Judge of this Court had registered the plaint and restrained the defendants therein from taking any further steps to prosecute any arbitration proceedings and restrained the defendant No. 3 in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovision in Part I, which is contrary to or excluded by that law or rules will not apply. Section 9 was thus held applicable to International Commercial Arbitrations. 13. The Apex Court again in Venture Global Engineering v. Satyam Computers Services Ltd. AIR 2008 SC 1061 not only followed Bhatia International (supra) and further held that the provisions of Section 34 of the Act to be also applicable to International Commercial Arbitrations but otherwise also, in my view, the said judgment squarely applies to the facts of the present case. In that case a suit was filed before the Civil Court Secunderabad seeking a declaration to set aside the Award, and permanent injunction on the transfer of shares under Award. An application under Order 7 Rule 11 of the CPC was filed for rejection of the plaint. The trial court allowed the said application and rejected the plaint. The challenge thereto before the High Court did not succeed. The High Court held that the Award cannot be challenged even if it is against the public policy and in contravention of statutory provisions. Against the said order the appeal was preferred to the Apex Court. The Apex Court did not interfere with the reject ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Whether said brokers are the agents of the plaintiff or of the defendant No. 1 and whether there is any agreement in writing by the said brokers with the defendant No. 1 so as to bring an arbitration Clause into operation cannot be permitted to be adjudicated in this suit. The spirit of change in the arbitration law, even independently of Bhatia International was to minimize the intervention of the Court in arbitration proceedings and to expedite the same. If the suits as the present one are to be entertained, it would give tool in the hands of the party who is interested in delaying the arbitration (as one party is generally found to be) to in every case of arbitration first institute a suit for determination of validity thereof. 18. Though Bhatia International aforesaid has held the provisions of Part I of the Arbitration Act to be applicable to International Commercial Arbitrations also and which would include Section 16 as well, I had repeatedly asked from the senior Counsel for the plaintiff as to whether the Arbitration Forum relied upon by defendants did not permit the plaintiff to take the pleas as taken in the plaint in this suit. The plaintiff in para 20 of the plaint ..... X X X X Extracts X X X X X X X X Extracts X X X X
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