Rashtriya Chemical Fertilizers Limited and… — Contract and Commercial Disputes | Bombay HC (2010)

Rashtriya Chemical Fertilizers Limited and… — Contract and Commercial Disputes | Bombay HC (2010)

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORIGINAL SIDE

WRIT PETITION NO.184 OF 2010

1. Rashtriya Chemical
 Fertilizers Ltd., a
 Public Sector Undertaking,
 registered and/or
 incorporated under the
 provisions of Companies
 Act, 1956, having its
 registered office at
 Administrative Building,
 Chembur, Mumbai-400 074.
2. Mr. K.C. Prakash,
 adult, Indian Inhabitant
 and Company Secretary
 of Petitioner No.1
 abovenamed, working for
 gain at Administrative
 Building, Chembur,
 Mumbai-400 074..... Petitioners
- Versus -
1. J.S. Ocean Liner Pte. Ltd.,
 a body corporate,
 registered under the laws
 of Singapore, having its
 registered office at
 18-03, High Street Centre,
 1, North Bridge Road,
 Singapore-179 094.
2. Indian Council of
 Arbitration, having its
 office at Federation House,
 Tansen Marg, New Delhi -
 110 001.

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3. Mr. Jagdish C. Seth,
 an adult, Indian
 Inhabitant, having his
 office at 917, Dalamal
 Tower, 211, Nariman
 Point, Mumbai-400 021.
4. Captain V.K. Gupta,
 an adult, Indian
 Inhabitant having his
 office address at 124,
 Maker Tower, �L�,
 Cuffe Parade, Mumbai -
 400 005.

5. Mr. G.J. Kodwaney,
 an adult, Indian
 Inhabitant having his
 address at 29/12-C,
 Mahesh Rose, 4 Bungalows,
 Andheri (West),
 Mumbai-400 058..... Respondents

Dr. Milind Sathe, Senior Advocate with
Shri Ashish Kamath i/b M/s. M.P. Savla
& Co. for the Petitioners.

Shri S.U. Kamdar, Senior Advocate with
Ms Pooja Patil i/b Shri Ashwin Shankar
for Respondent No.1.

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CORAM: J.N. PATEL AND
 A.P. BHANGALE, JJ.

RESERVED ON : APRIL 12, 2010

PRONOUNCED ON: APRIL 20, 2010

JUDGMENT (Per A.P.Bhangale, J.):

1.Rule. The learned counsel appearing
on behalf of respondent No.1 waives notice. By
consent, the rule is made returnable forthwith.
Heard learned counsel for the petitioners and
respondent No.1.

2.By this writ petition under Article
226 of the Constitution of India, the
petitioners are praying for issuance of a writ
of mandamus in the nature of an order or
direction, ordering and/or declaring that the
arbitral proceedings between the petitioners
and respondent No.1 stands terminated and the
Arbitral Tribunal consisting of Mr. Jagdish C.
Sheth, Captain V.K. Gupta and Mr. G.J. Kodwaney
has ceased to have jurisdiction over the
disputes with further prayer to quash and set
aside the order dated 24-12-2009, as also the
Minutes of the Meeting dated 19-12-2009 and the
e-mail dated 18-12-2009, addressed by
respondent No.2 to the petitioners.

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3.Briefly stated, the facts of the case
are thus:

Petitioner No.1 is a Public Sector
Undertaking, owned by the Government of India
and is engaged in the business of chemicals and
fertilizers, having its registered office at
Chembur, Mumbai-400 074. Petitioner No.2 is the
Company Secretary of petitioner No.1.
Respondent No.1 is a body corporate registered
under the laws of Singapore. On 6-11-2006, a
charter party was executed between the
petitioners and respondent No.1. Under Clause
43 of the charter party, the parties had agreed
that all disputes arising under the charter
party would be settled in India. Clause 43
reads thus:

�43.All disputes arising under
this charter party shall be settled
in India in accordance with the
provisions of the Arbitration &
Conciliation Act, 1996 (Act No.26 of
1996) or any further amendments
thereof and under the Maritime
Arbitration Rules of the Indian
CouncilofArbitration.The
Arbitrators to be appointed from out
of the Maritime Panel of Arbitrators
oftheIndianCouncilof
Arbitration. The Arbitrators shall
be commercial men.�

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4.On 6-12-2007, respondent No.1 by its
Advocate�s notice invoked the arbitration
clause and requested for a reference of the
disputes to arbitration. The petitioners
replied to the said notice on 20-12-2007 and
both the parties nominated their respective
arbitrators, who in turn appointed the
presiding arbitrator. Thus, the Arbitral
Tribunal was constituted.

5.On or about 2-4-2008 respondent No.1
filed its statement of claim of US$ 293,588.78
against the petitioners, towards purported
unpaid freight, which was forwarded to the
petitioners through the Indian Council of
Arbitration (respondent No.2 herein). The
petitioners filed their written statement and
counter-claim on 30-6-2008. On 12-12-2009, the
Arbitral Tribunal invited the attention of the
parties to Rule 20(1) of the Maritime
Arbitration Rules (as amended on 1-4-2004)
which provides for a maximum limit of two years
for making the award, extendable by agreement
between the parties to the dispute or by the
MaritimeArbitrationCommittee.While
respondent No.1 agreed to extend the time limit
upto 31-12-2010, the petitioners through their

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Advocate�s letter dated 17-12-2009 called upon
the Arbitral Tribunal to declare itself as
functus officio and terminate the arbitral
proceedings. The Secretary of respondent No.2
by an e-mail dated 18-12-2009 contended that
the time count would commence from 2-4-2008.
On 19-12-2009 the petitioners moved an
application before the Arbitral Tribunal
seeking termination of the arbitral proceedings
and declaration that it became functus officio
and ceased to have jurisdiction over the
disputes between the parties. The Arbitral
Tribunal held a meeting on 19-12-2009. The
contention of the petitioners was rejected and
the order of rejection was communicated to the
petitioners on 28-12-2009.

6.Respondent No.1 opposed the petition
on the ground that it is frivolous and contrary
to the ICA Maritime Arbitration Rules (as
amended on 1-4-2004). Respondent No.1 submitted
that the petitioners� contention that in view
of Rule 21 of the Arbitration and Conciliation
Act, 1996, the arbitral proceedings commence on
the date on which a request for the dispute to
be referred to arbitration is received by the
respondent, is incorrect as the provision is
enacted for the purpose of calculation of

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limitation and as such no time limit is
provided for termination of an arbitral
proceedings under the Act and, secondly, the
parties are free to extend the time limit and
further more, there are various conditions
contemplated under the Rules which are to be
fulfilled before the commencement of the
arbitration proceedings. The Rules and the
provisions of the Act are to be read
harmoniously and not selectively. The
petitioners have also made a counter-claim
before the Arbitral Tribunal mention of which
is conveniently omitted from their petition as
also from their application before the
Tribunal. It is also submitted on behalf of
respondent No.1 that a party cannot, by time
consuming tactics, cause immense delay and then
turn around to say that the mandate of Arbitral
Tribunal should be terminated. It is further
contended that the petitioners have alternative
efficacious remedies under the provisions of

the Arbitration & Conciliation Act, 1996 and
the writ petition is not maintainable in this
case. Section 5 of the Act, which incorporates
a non-obstante clause, restrains judicial
intervention except as specifically provided in
Part-I of the Act. The parties are required to
participate in the proceedings before the

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Arbitral Tribunal for final award by the
Tribunal. Respondent No.1 had taken out an
application for interim award for unpaid,
undisputed claim which is pending since August,
2008 and delayed only because of the numerous
interim applications made by the petitioners.
Respondent No.1 thus blamed the petitioners�
conduct of delaying the arbitral proceedings
before respondent Nos.3 to 5 under the aegis of
respondent No.2-Indian Council of Arbitration.
The Arbitral Tribunal has already decided the
issue raised by the petitioners considering the
Rules in the light of the provisions of the
Act. In judicial review, a Writ Court cannot
substitute its own opinion with that of the
Arbitral Tribunal.

7.We have heard at length the
submissions made by the learned counsel of the
respective parties and have also perused the
affidavits on the record as also the rulings
cited during the course of the arguments. In
our view, the mandamus in the nature of a
declaration cannot be granted for the reasons
stated herein below:

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submitted that under the Maritime Rules of
Arbitration of ICA, the Arbitral Tribunal
shall make the award as expeditiously as
possible preferably within six months from the
date of the reference, subject to the maximum
limit of two years from the date of
commencement of the arbitral proceedings,
extendable by the parties to the dispute or by
the Maritime Arbitration Committee. Rule 20
cannot, in our opinion, be read in isolation.
The overall procedure laid down under the
Rules has to be considered. When a party to
theproceeding,bymakingnumerous
applications at interim stage, cause delay in
the conduct of the proceedings before the
Arbitral Tribunal, such party cannot plead
outer limit fixed under Rule 20 to argue that
the Arbitral Tribunal should conclude the
hearing within two years. This, in our
opinion, is not a hard and fast rule,
particularly when the legislative intention is
clear to allow the parties the freedom to
extend the period of adjudication.

9.Thelearnedcounselforthe

petitioners then urged that unless agreed
otherwise by the parties under Section 21 of
the Act, an arbitral proceeding commence on

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the date on which request for the dispute to
be referred to arbitration is received by the
respondents. Reference is made to the ruling
in the case of M/s. Sundaram Finance Ltd. v.
M/s. NEPC India Ltd. {AIR 1999 SC 565} to
support the proposition that the interim
orders as listed can be passed under Section 9
of the Act. The learned counsel for the
petitioners then submitted that in view of
ruling in M/s. Anuptech Equipments Private
Ltd. v. M/s. Ganpati Co-op Housing Society
Ltd. {AIR 1999 Bombay 219} in which, in
paragraph, the Court has observed thus:

�To my mind, therefore, in a case
where arbitral proceedings have been
closed when the order itself ex
facie does not amount to nullity,
the remedy of civil suit may not be
available�

10.In the facts and circumstances of the
present case, the ruling cannot be of any
assistance to the petitioners as the arbitral
proceedings are pending. The learned counsel
for the petitioners sought to rely upon the
ruling in M/s. Senbo Engineering Ltd. v. State
of Bihar {AIR 2004 Patna 33) to argue that the
Patna High Court held that writ petition under
Article 226 can lie against an order

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terminating proceedings passed by the Arbitral
Tribunal. In our opinion, this ruling also
cannot came to the rescue of the petitioners
in the facts and circumstances of the present
case when the arbitration proceedings are
still pending, and not terminated.

11.On the other hand, the learned counsel
for respondent No.1 submitted that in State of
U.P. and others v. Bridge & Roof Company
(India) Ltd. {(1996) 6 SCC 22}, the Apex Court
has ruled thus:

�21.Thereisyetanother
substantialreasonfornot
entertaining the writ petition.
The contractin question contains a
clause providing inter a1ia for
settlementofdisputesby
reference to arbitration [Clause 67
of the Contract]. The Arbitrators
can decide both questions of fact as
well as questions of law. When
the contract itself provides for a
mode of settlement of disputes
arising from the contract, there is
no reason why the parties should not
follow and adopt that

remedy and invoke the extra-
ordinary jurisdiction of the High
Court under Article 226. The
existenceofaneffective
alternative remedy - in this case,
provided in the contract itself -
is a good ground for the court to
decline to exercise its extra-

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ordinary jurisdiction under Article
226. The said Article was not
meant to supplant the existing
remedies at law but only to
supplement them in certain well-
recognised situations. As pointed
out above, the prayer for issuance
of a writ of mandamus was wholly
misconceived in this case since the
respondent was not seeking to
enforce any statutory right of
theirs nor was it seeking to enforce
any statutory obligation cast upon
the appellants. Indeed, the very
resort to Article 226 � whether for
issuance of mandamus or any
other writ, order or direction -
was misconceived for the reasons
mentioned supra.�

12.Reference is then made to the majority
view expressed by the Constitution Bench in SBP
& Co. v. Patel Engineering Ltd. & Anr. {(2005)
8 SCC 618}. In paragraph 16, the Apex Court has
observed thus:

�16.We may at this stage notice
the complementary nature of Sections
8 and 11. Where there is an
arbitration agreement between the
parties and one of the parties,
ignoring it, files an action before
a judicial authority and the other
party raises the objection that
there is an arbitration clause, the
judicial authority has to consider
that objection and if the objection
is found sustainable to refer the

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partiestoarbitration.The
expression used in this section is
�shall� and this Court in P. Anand
Gojapathi Raju V. P.V.G. Raju and in
Hindustan Petroleum Corpn. Ltd. V.
Pinkcity Midway Petroleums has held
that the judicial authority is bound
to refer the matter to arbitration
once the existence of a valid
arbitration clause is established.
Thus, the judicial authority is
entitled to, has to and and bound to
decide the jurisdictional issue
raised before it, before making or
declining to make a reference.
Section 11 only covers another
situation. Where one of the parties
has refused to act in terms of the
arbitration agreement, the other
party moves the Chief Justice under
Section 11 of the Act to have an
arbitrator appointed and the first
partyobjects,itwouldbe
incongruous to hold that the Chief
Justice cannot decide the question
of his own jurisdiction to appoint
an arbitrator when in a parallel
situation, the judicial authority
can do so. Obviously, the highest
judicial authority has to decide
that question and his competence to
decide cannot be questioned. If it
is held that the Chief Justice has
no right or duty to decide the
question or cannot decide the
question, it will lead to an
anomalous situation in that a
judicial authority under Section 8
can decide, but not a Chief Justice
under Section 11, though the nature
of the objection is the same and the
consequenceofacceptingthe

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objection in one case and rejecting
it in the other, is also the same,
namely, sending the parties to
arbitration. The interpretation of
Section 11 that we have adopted
would not give room for such an
anomaly.�

13.In Vimal Madhukar Wasnik (Dr.), Nagpur
v. Sole Arbitrator {2006 (1) Bom.C.R. 419},
this Court in paragraph 5 has observed thus:

�Even if Arbitral Tribunal is held
not to be a Tribunal subject to
Article 226 or 227, yet considering
the provisions of Section 19 of the
Act it is not bound by any
proceduralimpedimentinits
exercise of jurisdiction�

This Court had refused to exercise its extra-
ordinary jurisdiction on the facts of the
case.

14.ThelearnedCounselforthe

respondents made a reference to the decision
in K. Narayana Raju, Contractor v. Union of
India {2006 (2) Arb.LR 267 (AP)} to urge that
the Andhra Pradesh High Court held that
without prayer for termination of mandate of
arbitrator,thepetitionercannot
automatically seek appointment of substitute
arbitrator.

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15.Reference is also made to the ruling
in Empire Jute Company Limited and others v.
Jute Corporation of India Limited and another
{(2007) 14 SCC 680} to argue that writ
petition is not ordinarily maintainable if
arbitration clause exists and dispute between
the parties is covered thereby. Writ court
should not ordinarily exercise its power of
judicial review. In paragraph 18 of the
ruling, it is observed thus:

�18. The power of judicial review
vested in the superior courts
undoubtedly has wide amplitude but
the same should not be exercised
when there exists an arbitration
clause. The Division Bench of the
High Court took recourse to the
arbitration agreement in regard to
one part of the dispute but
proceeded to determine the other
part itself. It could have refused
to exercise its jurisdiction leaving
the parties to avail their own
remedies under the agreement but if
it was of the opinion that the
dispute between the parties being
covered by the arbitration clause
should be referred to arbitration,
it should not have proceeded to
determine a part of the dispute
itself.�

The Arbitration & Conciliation Act (26

16.

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of 1996) was enacted with an objective to cover
international and commercial arbitrations as
also domestic arbitrations. It provides
arbitral procedure which is fair, efficient and
capable of meeting the needs of all concerned,
with judicial intervention kept at minimal
level. While it is an experience that there is
delay in justice delivery system mostly due to
time consuming tactics, the arbitral procedure
provides for a ray of hope for an easy and
expedient mechanism to enforce rights and
obligations under the contract. Thus, an
arbitration clause in a contract is an
extremely important collateral clause capable
of meeting the needs of the parties concerned.
When an arbitration clause is incorporated in a
contract in a clear and unambiguous words, the
true effect of it cannot be changed when it can
cover all disputes arising out of and in
relation to the contract. It is for these
reasons that the arbitration clause in a
contract is needed to be construed as stand
alone, severable, as also final and binding
between the parties to the contract. Thus, an
arbitration clause stands apart from the rest
of the contract in which it is contained, in
the sense, that it does not impose obligation
upon one party and in favour of the other, but

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lays down that if any dispute arises with
regard to the obligation which one party has
undertaken to the other party, such a dispute
shall be settled by arbitration. A mechanism
which is strong enough to meet myriad
situations of every kind is provided under the
Act for difficulties in enforcement of an
arbitration clause in the contract.

17.

In Branch Manager, M/s. Magma Leasing &
Finance Ltd., & Anr. v. Potluri Madhavilata &

Anr. {2009 AIR SCW 7041}, the question that
arose for consideration by the Apex Court was,
whether an arbitration agreement survived for
the purpose of resolution of disputes arising
under or in connection with the contract even
if its performance has come to an end on
account of termination due to breach? The Apex
Court following its earlier decisions held that
merely because the contract has come to an end
by its termination due to breach, the
arbitration clause does not get perished nor
rendered inoperative; rather it survives for
resolution of disputes arising �in respect of�
or �with regard to� or �under� the contract.
Thus, the Apex Court also affirmatively
answered the incidental question as to whether

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the parties were required to be referred to
arbitration under Section 8 of the Act and
observed thus:

�22.An analysis of Section 8
wouldshowthatforits
applicability,thefollowing
conditions must be satisfied: (a)
that there exists an arbitration
agreement; (b) that action has been
brought to the court by one party to
the arbitration agreement against
the other party; (c) that the
subject-matter of the suit is same
as the subject-matter of the
arbitration agreement; (d) that the
other party before he submits his
first statement of the substance of
the dispute, moves the court for
referringthepartiesto
arbitration; and (e) that along with
the application the other party
tenders the original arbitration
agreement or duly certified copy
thereof.

23.Section 8 is in the form of
legislative command to the Court and
once the pre-requisite conditions as
aforestated are satisfied, the court
mustreferthepartiesto
arbitration. As a matter of fact,
on fulfillment of conditions of
Section 8, no option is left to the
court and the court has to refer the
parties to arbitration.�

18.In Part-I of the Act, general

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provisions as to arbitration in India are
incorporated, which is known as domestic
arbitration. The non-obstante clause in Section
5 ensures that in matters governed by the first
part, no judicial authority i.e., Court shall
intervene except where so provided under Part-
I. Section 7 defines arbitration agreement as
an agreement by the parties to submit to
arbitration all or certain disputes which have
arisen or which may arise between them in
respect of a defined legal relationship,
whether contractual or not. An arbitration
agreement is required to be in writing i.e., in
a document by the parties or spelled out from
communication between the parties or by
admission in exchange of statements as to claim
or defence which may be in the form of
arbitration clause in a written contract or in
the form of a separate agreement. Even if there
is a reference in a written contract to a
document containing an arbitration clause, it
would be constituted or construed as an
arbitration agreement in relation to written
contract between the parties.

19.Once it is shown that an arbitration
clause or agreement is existing, a judicial
authority before which action is brought has

20

power to refer parties to arbitration. Section
8 enables a judicial authority to exercise
power to refer parties to arbitration upon an
application, accompanied with the duly
certified copy of arbitration agreement, when
made by the applicant at the earliest
opportunity before submission of his statement
on the substance of the dispute. During the
pendency of such application, an arbitration
may commence or continue and an arbitral award
may be made, subject to interim measures that
may be taken by the Court under Section 9 of
the Act.

20.Under Section 11(6) of the Act, Chief
Justice or his designate can take necessary
measures if under an appointment procedure
agreed between the parties (unless agreed
appointment procedure provide other means to
secure the appointment) -

(a)a party fails to act as required under
that procedure or

(b)the parties or two appointed arbitrators
fail to reach an agreement expected of
them under that procedure or

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(c)a person, including an institution fails
to perform any function entrusted to him
or it under that procedure.

21.Section 14 of the Act provides for
termination of mandate of an arbitrator upon
happening of frustrating event such as failure
or impossibility to act as an arbitrator.
Sometimes unexpected events occur which are
beyond the control of the parties alike
principle of frustration under Section 56 of
Indian Contract Act.

(a)An arbitrator becomes de jure or de facto
unable to perform his functions or for
other reasons fails to act without undue
delay; and

(b) he withdraws from his office or the parties agree to the termination of his mandate.

22.If controversy persists in respect of
inability of the arbitrator to perform his
functions or about his failure to act
expeditiously, a party aggrieved may (unless
otherwise agreed between the parties) apply to
the Court to decide on the termination of the

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mandate. The judicial intervention of the
Court is specifically provided for under
Section 14(2) of the Act while controversy
concerning dejure or de facto inability of the
arbitrator to perform his functions continues.
If for any reason the arbitrator has failed to
discharge his functions with reasonable
promptitude, the party has statutory remedy
available under Section 14(2) of the Act to
prefer an application to the Court with prayer
todecidethecontroversyregarding
termination of arbitrator�s mandate. The
Court is empowered to consider (a) �dejure�
inability i.e., legal disability of the
arbitrator or want of his legitimate authority
to arbitrate and (b) �de facto� inability of
the arbitrator to perform his functions as an
arbitrator, and can terminate the mandate of
the arbitrator on any of the above grounds.
There is inbuilt statutory alternative remedy
for a party aggrieved by undue delay in
arbitral proceedings. In Oil & Natural Gas
Corporation Ltd. v. Saw Pipes Ltd. {2003 (4)
Scale 92}, the Apex Court observed as under:

�It is true that under the Act, there
is no provision similar to section 23
and 28 of the Arbitration Act, 1940
which specifically provided that the
Arbitrator shall pass award within

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reasonable time as fixed by the
Court. It is also true that on
occasions, arbitration proceedings
are delayed for one or the other
reason; but it is for the parties to
take appropriate action of selecting
proper Arbitrator(s) who could
dispose of the matter within
reasonable time fixed by them. It is
for them to indicate the time limit
for disposal of the arbitral
proceedings. It is for them to decide
whether they should continue with
Arbitrator(s) who cannot dispose of
the matter within reasonable time.
However, non-providing of time limit
for deciding the dispute by the
Arbitrator(s) could have no bearing
on the interpretation of Section 34.
Further for achieving the object of
speedier disposal of dispute, justice
in accordance with law cannot be
sacrificed. In our view, giving
limited jurisdiction to the Court for
having finality to the award and
resolving dispute by speedier method
would be much more frustrated by
permitting patently illegal award to
operate. Patently illegal award is
required to be set at naught,
otherwiseitwouldpromote
injustice.�

23.By the above observations, the Apex
Court expressed its anxiety to ensure
expeditious and speedier justice in accordance
with law applicable to arbitration proceedings
and also the necessity of judicial
intervention to promote the interest of

24

justice. However, the role of Courts is of
supervisory nature over arbitral process and
judicial intervention need to be as minimum as
possible. An arbitrator must be essentially
an independent & impartial person possessing
requisite qualification, as has been agreed by
the parties. If the party becomes aware
subsequently that the arbitrator does not
possess the eligibility and qualification as
required, the appointment may be challenged in
view Section 12 of the Act by adopting the
procedure prescribed to challenge such
appointment as indicated in Section 13 of the
Act. The arbitrators are at liberty to
withdraw from their office if their
appointment is challenged or have option to
proceed further and decide the challenge and
to pass an award. Such arbitral award can be
challenged in accordance with Section 34 of
the Act by recourse to the Court on various
grounds if there is evidence that party to the
arbitral proceedings was incapable to
participate in the arbitral proceedings or had
no proper notice about the appointment of
arbitrator(s) or if in such proceedings the
party was unable to present its case, or if
the award is passed beyond the scope of
controversy submitted by the parties or if the

25

composition of Arbitral Tribunal was not as
agreed between the parties. The order passed
by the Court under Section 34 as also the
order passed under Sections 9, 16(2), 16(3)
and 17 of the Act are appealable to the Court
which can hear appeals from the original
decrees of the Court passing the order. No
second appeal is permissible excepting an
appeal which a party may prefer to the Apex
Court. The judicial authority or the Court
concerned, when approached, is required to
bear in mind the object of the Act to achieve
speedy disposal of arbitral proceedings with
minimal court intervention in such matters.
The provisions as waiver of objections etc. in
Sections 4, 12, 15(4) 16(5), 19(1) and 25 are
really intended to ensure speedy expeditious
disposalandcompletionofarbitral

proceedings. The legislative intention is
clear that arbitral proceedings shall not be
unduly prolonged by time consuming tactics by
one or other party to the dispute.

24.Maritime Arbitration Rules of the
Indian Council of Arbitration governed under
the Act do prescribe procedure in details
which is in aid of the provisions of the Act
to conduct the domestic and international

26

maritime arbitrations in India. Arbitration is
initiated through the Secretary of the ICA
with a request, incorporating required
particulars, accompanied by payment of fees
etc. as per Rules. The respondents in arbitral
proceedings can make a counter claim which is
required to be adjudicated by the arbitrators
who constituted the Arbitral Tribunal under
the Rules is not bound by the provisions of
the Civil Procedure Code and the Indian
Evidence Act. The Arbitral Tribunal has
requisite power to examine witnesses and allow
their cross-examination and consider arguments
oral as well as written before the Award is
passed. Thus, there is alternative and
efficaciousremedyavailableforthe
petitioner considering policy of the law to
provide for speedy adjudication by alternative
dispute resolution system in accordance with
provisions of the Act and inbuilt remedies
available to over ride difficulties faced by
the parties. The arbitration agreement must be
construed ordinarily as �deemed to subsist� so
as to encourage ADR and enable the parties to
enforce obligations under commercial contract
brought to arbitration. In the present case
there is specific arbitration clause 43 in the
charter executed between the petitioners and

27

respondent No.1 and reference is pending
before the Arbitral Tribunal duly constituted
under the Rules of ICA. The Arbitral Tribunal
is in seisin of the dispute pursuant to the
reference by the parties invoking its
jurisdiction by lodging claim and counter
claim before it. Thus disputing parties have
chosen an alternative, speedy and efficacious
remedy for to determine controversy between
themselves. If we entertain and admit the
petition of this nature for hearing in due
course, after years, the very object and
policy of the Act providing speedy and cheaper
mode of adjudication of disputes by process of
arbitration would stand frustrated and
defeated. In such cases intervention by way of
judicial review under Article 226 of the
Constitution of India must be kept minimum in
very exceptional and a deserving case. The
parties must be left to choose their
alternative statutory remedies available under
the Act. They are required to be exhausted
before invoking writ jurisdiction under
Article 226 of the Constitution of India. This
Court cannot sit as an Appellate Court over
decision of Arbitral Tribunal in pending
Arbitration proceedings to substitute it�s own
opinion.

28

25.For all the above reasons, the writ
petition is devoid of merits and is liable to
be dismissed and is accordingly dismissed. The
rule is discharged. No order as to costs.

Sd/-Sd/-

After the Judgment was pronounced, the
learned counsel appearing for the petitioners
requested that the interim order granted by
this Court may be continued for a period of two
weeks to enable the petitioners to seek an
appropriate remedy. In view of the fact that
this Court had passed the interim order during
the pendency of the petition, we are inclined
to grant the request, though the same is
strongly objected by the learned counsel
appearing for respondent No.1. The interim
order stands extended by two weeks. It is made
clear that no further extension in the matter
will be granted. Needless to say, the time
consumed in prosecuting the petition shall not
be computed for the purpose of limitation;
before the arbitral Tribunal.