Allowed

Concept Hospitality Pvt. Ltd., Thr.Its Managing Director, K. P. Kannampilly v. Spazio Leisure Resort, Thr. Its Prop., Ireneu Aleluia Rodigues and Rosa Hermengilda Rodrigues

Bombay HC6 Jul 2021AAR/5/2021

Case brief

AI extract

What is this about?

The High Court of Bombay at Goa, M.S. Sonak, J., allowed an application under Section 11(6-A) of the Arbitration and Conciliation Act, 1996. Confined to examining the existence of an arbitration agreement as per Section 11(6-A), held that disputes arose and the clause covers the issues. Appointed Hon'ble Mr. Justice A.P. Lavande as arbitrator.

What did the court decide?

Application allowed. Hon'ble Mr. Justice A.P. Lavande appointed as Sole Arbitrator to adjudicate disputes. Disclosures verified. Merits left open.

Concept Hospitality Pvt. Ltd., Thr.Its Managing Director, K. P… — Arbitration | Bombay HC (2021)

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1 24-aar-5-2021

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IN THE HIGH COURT OF BOMBAY AT GOA APPLICATION FOR APPOINTMENT OF ARBITRATOR No. 5 OF 2021

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Concept Hospitality Pvt. Ltd.
Thr. Its Managing Director, K. P. Kannampilly .... Applicant.

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V e r s u s

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Spazio Leisure Resort, thr. Its prop.,
Ireneu Aleluia Rodrigues And
Rosa Hermengilda Rodrigues

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 .....Respondent

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Mr. Gauravvardhan A.S. Nadkarni and Mr. D. Lawande, Advocates for the
Applicant.

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Mr. A.D. Bhobe, Advocate for the Respondent.

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CORAM : M. S. SONAK, J

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 DATE : 6th July, 2021

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P.C.:

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On 29.06.2021, on hearing the learned Counsel for the parties,

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the following order came to be made:

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'Heard Mr. Gauravvardhan A.S. Nadkarni for the
Applicant and Mr. A. D. Bhobe for the Respondent.

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2.This is an application under Section 11 of the
Arbitration and Conciliation Act, 1996 (said Act), seeking
appointment of an arbitrator.

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3.The record bears out that the Applicant and the
Respondent entered into a management agreement dated
18/6/2019. This agreement, in its Article XXVI, contains
an arbitration clause, which reads as follows :

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“If any dispute, difference, claim or question shall
arise between the parties hereto touching this
Agreement or any claim or thing contained in this
Agreement or the construction of any article or
section of this Agreement or as to any matter in
any way connected with or arising out of this
Agreement or the operation thereof or the rights,
duties and liabilities of either party in connection
with this Agreement, then and every such case,
shall be referred to the Sole Arbitrator to be
appointed in accordance with the Arbitration &
Conciliation Act, 1996. The place of sitting for
Arbitration shall be the State of Goa”

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4.The record also bears out that on 11/6/2020, the
Respondent issued a termination notice purporting to
terminate the agreement dated 18/6/2019. The Applicant
contested such termination and further, addressed a notice
dated 29/8/2020 to the Respondent, purporting to invoke
the arbitration clause contained in clause XXVI of the
agreement dated 18/6/2019.

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5.On 7/9/2020, the Respondent raised certain
pleas resisting resolution of the disputes by arbitration.
However, in the same letter, the Respondent, without
prejudice, proposed the name of an arbitrator who could
go into the disputes which had obviously arisen between

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the parties.

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6.Thereafter, some correspondence was exchanged
with a view to arrive at some settlement of the disputes.
However, the record bears out and the learned Counsel for
the parties confirm that no amicable settlement was
possible.

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7.Accordingly, the Applicant instituted this
application, seeking appointment of an arbitrator.

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8.Mr. Gauravvardhan Nadkarni, the learned
Counsel for the Applicant invited my attention to Section
11(6) of the said Act and submitted that this being an
application under Section 11(6-A) of the said Act, this
Court is required to confine itself to the examination of
the existence of an arbitration agreement. He submitted
that in the present case, existence of an arbitration
agreement is not even in dispute. He submitted that the
issues raised by the Respondents in their replies, resisting
resolution by arbitration or in their reply to the present
application, are really not the issues which can be gone
into at this stage. He submitted that the issues raised lack
merit and in any case, these are the issues that will have to
be considered by the Arbitral Tribunal. He relies on Duro
Felguera, SA vs. Gangavaram Port Limited1; Mayavati
Trading Private Limited vs. Pradyut Deb Burman2, and
Branch Manager, Magma Leasing and Finance Limited
and anr. vs. Potluri Madhavilata and anr.3 in support of
his contentions.

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9.Mr. A.D. Bhobe, the learned Counsel for the
Respondent submits that no disputes, as such, have arisen
on account of COVID-19 pandemic. He submits that the
so called disputes are not arbitrable and, therefore, this

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1 (2017) 9 SCC 729

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2 (2019) 8 SCC 714

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3 (2009) 10 SCC 103

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application may be dismissed.

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10.Having considered the rival contentions in the
context of the provisions contained in Section 11 of the
said Act, in my judgment, a case is made out for referring
the parties to arbitration.

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11.Clearly, disputes have arisen between the parties
and existence of arbitration agreement is not even in
dispute. At least, prima facie, the arbitration agreement is
quite wide and would encompass the issues which the
parties have raised against one another. In any case, as
pointed out by Mr. Nadkarni, all such matters can be
effectively looked into and resolved by the Arbitral
Tribunal once it is constituted. Based on the objections
raised in the response to this application, no case is made
out to either dismiss this application or not to refer the
parties to arbitration.

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12.In Duro Felguera, SA (supra), this is what the
Hon'ble Apex Court has held in the context of the
provisions of Section 11(6-A) of the said Act :

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“48. Section 11(6-A) added by the 2015
Amendment, reads as follows:

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“11. (6-A) The Supreme Court or, as the
case may be, the High Court, while
considering any application under sub-section
(4) or sub-section (5) or sub-section (6), shall,
notwithstanding any judgment, decree or
order of any court, confine to the examination
of the existence of an arbitration agreement.”

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(emphasis supplied)
From a reading of Section 11(6-A), the
intention of the legislature is crystal clear i.e.
the court should and need only look into one

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aspect—the existence of an arbitration
agreement. What are the factors for deciding as
to whether there is an arbitration agreement is
the next question. The resolution to that is
simple—it needs to be seen if the agreement
contains a clause which provides for arbitration
pertaining to the disputes which have arisen
between the parties to the agreement.

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x x x x x x x x

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59. The scope of the power under Section
11(6) of the 1996 Act was considerably wide in
view of the decisions in SBP and Co. V. Patel
Engg. Ltd. (2005) 8 SCC 618 and National
Insurance Co. Ltd. v. Boghara Polyfab (P) Ltd.
(2009) 1 SCC 267. This position continued
till the amendment brought about in 2015.
After the amendment, all that the courts need
to see is whether an arbitration agreement
exists—nothing more, nothing less. The
legislative policy and purpose is essentially to
minimise the Court’s intervention at the stage
of appointing the arbitrator and this intention
as incorporated in Section 11(6-A) ought to be
respected.”

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13.In Mayavati Trading Private Limited (supra),
the Hon'ble Apex Court has overruled its decision in
United Insurance Company Limited vs. Antique Art
Exports Private Limited - (2019) 5 SCC 362 and
affirmed its ruling in Duro Felguera, SA (supra). These
decisions, undoubtedly, support the contentions today
advanced by Mr. Nadkarni.

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14.For the aforesaid reasons, it is proposed to allow
this application and to appoint Hon'ble Mr. Justice A.P.
Lavande, Retired Judge of this Court, as an arbitrator.

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15.The matter is now posted on 6th July, 2021 in
order to enable Hon'ble Mr. Justice A.P. Lavande to file
disclosure statement in terms of Section 12 of the said
Act.

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16.The learned Counsel for the parties state that
they will forward an authenticated copy of this order to
Hon'ble Mr. Justice A.P. Lavande, at the earliest.
17.S.O. to 6th July, 2021.'

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2.Today, the parties have placed on record the Disclosure
Statement furnished by Hon'ble Shri Justice A. P. Lavande, retired Judge of
this Hon'ble Court. Having perused the same, there can be no difficulty
whatsoever in appointing Hon'ble Shri Justice A. P. Lavande, as the
Arbitrator in the matter.

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3.Accordingly, Hon'ble Shri Justice A. P. Lavande, is apponinted
as an Arbitrator to adjudicate into the disputes which have arisen between
the parties. Needless to add that all contentins of all parties on merits or
otherwise are expressly left open.

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4.The parties to communicate this order to Hon'ble Shri Justice
A. P. Lavande and, further, the parties, to act on authenticated copy of this
order.

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 M. S. SONAK, J.

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msr.

Concept Hospitality Pvt. Ltd., Thr.Its Managing Director, K. P. Kannampilly v. Spazio Leisure Resort, Thr. Its Prop., Ireneu Aleluia Rodigues and Rosa Hermengilda Rodrigues

Case brief

What is this about?

What did the court decide?

Concept Hospitality Pvt. Ltd., Thr.Its Managing Director, K. P. Kannampilly v. Spazio Leisure Resort, Thr. Its Prop., Ireneu Aleluia Rodigues and Rosa Hermengilda Rodrigues

Case brief

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What did the court decide?

What the court decided

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