TMI Blog2020 (4) TMI 831X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of the agreement where the venue was agreed to be at Kolkata, the arbitration proceedings be conducted accordingly. Considering the facts that the respondent failed to participate in the proceedings before the Arbitrator and did not raise any submission that the Arbitrator did not have jurisdiction or that he was exceeding the scope of his authority, the respondent must be deemed to have waived all such objections. The High Court was in error in setting aside said Order. In any case, the fact that the cause title showed that the present appellant was otherwise amenable to the jurisdiction of the Alipore Court, could not be the decisive or determining criteria - Appeal allowed. - Civil Appeal No. 2378 of 2020 [ Arising Out of Special Leave Petition ( C ) No. 11011 of 2019] - - - Dated:- 29-4-2020 - Uday Umesh Lalit And Vineet Saran , JJ. For the Petitioner : Mr. Shashank Manish, AOR For the Respondent : M/S. Kmnp Law Aor, AOR JUDGMENT Uday Umesh Lalit , J. 1. Leave granted. 2. In this appeal the Original Claimant challenges the final judgment and order dated 14.02.2019 passed by the High Court at Calcutta in CAN No.10094 of 2018. 3. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... greement (hereinafter referred to as the dispute ) between the parties, the parties hereby agreed to refer such dispute to Arbitration under Construction Industry Arbitration Association (CIAA) Rules and Regulations save and except that on behalf of both the parties to the Agreement. The owners shall be entitled to select the sole Arbitrator out of the panel of CIAA. The proceedings shall be governed by the Arbitration and Conciliation Act, 1996 with any statutory modification thereto or re-enactment thereof. The venue for holding such arbitration proceedings would be New Delhi. 4.2 On the other hand, the relevant arbitration clause in the agreement dated 14.04.2011 was to the following effect:- 24. Governing Law Jurisdiction Arbitration: All and any dispute arising out of or in connection with this contract, including any question regarding its existence, validity or termination, shall be referred to and finally resolved by arbitration in Kolkata in accordance with the arbitration Rules of the Construction Industry Arbitration Council ( CIAC Arbitration Rules ) for the time being in force at the commencement of the arbitration, which rules are deemed to be incorporat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... straining the appellant from relying on the arbitration clauses contained in the agreements. At the interim stage, a restraint order was passed by the Trial Court as a result of which the proceedings before the Arbitrator were stayed. An application under Sections 5 and 8 of the Arbitration and Conciliation Act, 1996 (for short the Act ) was filed by the appellant submitting that the dispute between the parties be referred to arbitration. 7. While accepting the application moved on behalf of the appellant the Trial Court in its Order dated 26.5.2014 observed:- The defendant has already stated that there are agreements between the parties containing arbitration clause. They referred the matter to arbitration in terms of the said arbitration clause to resolve payment related dispute. In support of their contention, the defendant produced a series of original agreements, signed by both parties. I fail to understand why the plaintiff signed in a series of documents, which they claim to be nonexisting. As stated earlier, the plaintiff failed to give any explanation regarding falsity and forgery committed by the defendant in executing the said agreements. On perusal of the agree ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and ultimately the claimant issued notice dated 02.03.2012 invoking the arbitration clause of the abovesaid agreements in order to settle the dispute with the respondent in accordance to the provisions of CIAC manual and requested to CIAC for referring the matter to arbitration and accordingly the matter has been referred to arbitration. CIAC issued notice dated 30.05.2012 to the respondents and asked for appearance and filing of reply/written statement on 04.07.2012. On receipt of the notice by the respondent, the respondent wrote to CIAC that an appeal has been filed before the Ld. Additional District Judge, at Sealdah, Kolkata against the order of the Ld. Civil Judge and the matter may be adjourned and accordingly the matter was adjourned and intimation was sent to the respondents. The respondent was also informed that without obtaining a stay order from the court of Ld. Additional District Judge, at Sealdah, Kolkata, the proceedings will not be adjourned but the respondents have not filed any stay order with CIAC in the arbitration proceedings in this matter. For not putting appearance or by not filing the reply/written statement, the respondent was proceeded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court at Calcutta being AP No.1141 of 2015, which was dismissed by the High court on 17.07.2015 after observing that it was not clear from the cause title how the petition could have been filed in the High Court. 10. Thereafter a petition under Section 34 of the Act was filed by the respondent being Miscellaneous Case No.298 of 2015 in the Court of District Judge, Alipore. The respondent reiterated its case about nonexistence of any agreement. It also stated, inter alia, that the venue of arbitration in terms of the agreement dated 14.04.2011 was at Kolkata. 11. On 20.02.2016 the Appellate Court dismissed Miscellaneous Appeal No.57 of 2014 as not being maintainable. 12. On 06.01.2007, OMP No. 449 of 2015 was rejected by the High Court of Delhi, inter alia, on the ground that no prime facie case was made out by the appellant. It was, however observed that the dismissal would not have any bearing on the decision that may be rendered in the pending petition under Section 34 of the Act before the Court at Alipore. 13. Being aggrieved by the order dated 20.02.2016, the respondent filed Revision Petitions being CO Nos.1320 and 1322 of 2016 in the High Court at Calcutta, whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8) which was dismissed as not being maintainable by the High Court at Calcutta on the ground that a remedy of filing a petition under Section 37 of the Act was available. The respondent thereafter filed appropriate petition being CAN No.10094 of 2018 which was allowed by the High Court at Calcutta vide judgement dated 14.02.2019 with the following observations:- Accordingly, since it is evident from the cause title itself that the respondent herein was otherwise amenable to the jurisdiction of the Alipore court, the order impugned dated August 13, 2018 is set aside and Misc. Case No.298 of 2015 (R.No.385 of 2015) is restored to the board of the Additional District Judge, 16th Court at Alipore. Said Judgment of the High Court is presently under challenge. 16. In the circumstances, it is clear that:- (i) Though each of the four agreements provided for arbitration, the award rendered by the Arbitrator was a common award; and (ii) In one of the agreements the venue was stated to be Kolkata and yet the proceedings were conducted at Delhi; However, at no stage, the aforesaid objections were raised by the respondent before the Arbitrator and the respondent let ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce without undue delay or, if a time limit is provided for stating that objection, within that period of time, shall be deemed to have waived his right to so object. 16. Competence of arbitral tribunal to rule on its jurisdiction.- (1) The arbitral tribunal may rule on its own jurisdiction, including ruling on any objections with respect to the existence or validity of the arbitration agreement, and for that purpose, - a) An arbitration clause which forms part of a contract shall be treated as an agreement independent of the other terms of the contract; and b) A decision by the arbitral tribunal that the contract is null and void shall not entail ipso jure the invalidity of the arbitration clause. (2) A plea that the arbitral tribunal does not have jurisdiction shall be raised not later than the submission of the statement of defence; however, a party shall not be precluded from raising such a plea merely because that he has appointed, or participated in the appointment of, an arbitrator. (3) A plea that the arbitral tribunal is exceeding the scope of its authority shall be raised as soon as the matter alleged to be beyond the scope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able and not binding on the parties. These contentions found favour with a Single Judge of the Calcutta High Court who set aside the award on 17-11-1998. On 18-5- 2000 the appeal was also dismissed. Hence this appeal to this Court. 8. Mr Venugopal submits that Section 10 of the said Act is a mandatory provision which cannot be derogated. He points out that even though the parties are free to determine the number of arbitrators such number cannot be an even number. He submits that any agreement which permits the parties to appoint an even number of arbitrators would be contrary to this mandatory provision of the said Act. He submits that such an agreement would be invalid and void as the Arbitral Tribunal would not have been validly constituted. He submits that composition of the Arbitral Tribunal itself being invalid, the proceedings and the award, even if one be passed, would be invalid and unenforceable. 9. Mr Venugopal submits that Section 4 of the said Act would only apply provided: (a) a party knew that he could derogate from any provision of this part, or (b) a party knew that any requirement under the arbitration agreement had not been com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2), not later than the submission of the statement of defence. Section 16(2) makes it clear that such a challenge can be taken even though the party may have participated in the appointment of the arbitrator and/or may have himself appointed the arbitrator. Needless to state a party would be free, if it so chooses, not to raise such a challenge. Thus a conjoint reading of Sections 10 and 16 shows that an objection to the composition of the Arbitral Tribunal is a matter which is derogable. It is derogable because a party is free not to object within the time prescribed in Section 16(2). If a party chooses not to so object there will be a deemed waiver under Section 4. Thus, we are unable to accept the submission that Section 10 is a non-derogable provision. In our view Section 10 has to be read along with Section 16 and is, therefore, a derogable provision. 20. Respondents 1 and 2 not having raised any objection to the composition of the Arbitral Tribunal, as provided in Section 16, they must be deemed to have waived their right to object. Thus, even stipulation in Section 10 that number of Arbitrators shall not be an even number was found to be a derogable ..... X X X X Extracts X X X X X X X X Extracts X X X X
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