Allowed

Jana Small Finance Bank Limited v. Bank of Baroda

Karnataka HC16 Jul 2021CMP/141/2021

Case brief

AI extract

What is this about?

The High Court of Karnataka allowed a petition under Section 11(6) of the Arbitration and Conciliation Act, 1996. The Court appointed Hon'ble Dr. Justice N. Kumar as the sole arbitrator to conduct proceedings between the petitioner and respondent, holding that parties are not restricted to claims in the initial legal notice.

What did the court decide?

Appointment of Hon'ble Dr. Justice N.Kumar as the sole Arbitrator to conduct proceedings between the parties at the Bengaluru Arbitration Centre.

Jana Small Finance Bank Limited Vs Bank of Baroda — Arbitration | Karnataka HC (2021)

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 16^TH DAY OF JULY 2021

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BEFORE

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THE HON’BLE MR. JUSTICE B. M. SHYAM PRASAD CIVIL MISCELLANEOUS PETITION NO.141/2021

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BETWEEN :

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JANA SMALL FINANCE BANK LIMITED HAVING ITS REGISTERED OFFICE AT THE FAIRWAY BUSINESS PARK, #10/1, 11/2 & 12/2B, KOROMANGALA INNER RING ROAD, CHALLAGHATTA, BENGALURU-560 071. RET. BY CHIEF CREDIT AND COLLECTIONS OFFICER

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... PETITIONER

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(By SRI PRAMOD NAIR., ADVOCATE)

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AND :

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BANK OF BARODA (ERSTWHILE VIJAYA BANK) ZONAL STRESSED ASSETS RECOVERY BRANCH, NO. 41/2, M.G. ROAD, BENGALURU-560 001 REP. BY ITS ASSISTANT GENERAL MANAGER. ... RESPONDENT (By MANU KULKARNI FOR SRI SANJANTHI SAJAN POOVAYYA, ADVOCATE)

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... RESPONDENT

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THIS CIVIL MISCELLANEOUS PETITION IS FILED UNDER SEC.11(6) OF THE ARBITRATION AND CONCILIATION ACT, 1996 PRAYING TO APPOINT A SOLE ARBITRATOR AS PER THE TERMS AGREED TO BETWEEN THE PARTIES IN THEIR CORRESPONDENCE DATED 15.01.2021, ANNEXURE E AND 22.01.2021, ANNEXURE-G AND CLAUSES 12.2 OF THE ASSIGNMENT AGREEMENT, ANNEXURE-B AND 13.2 OF THE SERVICING AGREEMENT DATED 31.03.2016 ANNEXURE-H TO RESOLVE THE DISPUTES THAT HAVE ARISEN BETWEEN THE PARTIES AND ALSO PASS SUCH OTHER DIRECTIONS AS THIS HON’BLE COURT MAY DEEM FIT AND NECESSARY IN THE CIRCUMSTANCES OF THE CASE AND IN THE INTEREST OF JUSTICE.

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THIS PETITION COMING ON FOR ADMISSION, THIS DAY, THE COURT MADE THE FOLLOWING:

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O R D E R

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The learned counsel for the petitioner and learned counsel for the respondent submit that there is no dispute about the execution of the Assignment and Service agreements dated 31.03.2016 between the petitioner and the erstwhile M/s Vijaya Bank [now

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merged with the respondent] or that the parties have agreed for resolution of all disputes by arbitration subject to the provisions of Arbitration and Conciliation Act, 1996 [for short ‘the Act’].

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The respondent has initiated the proceedings with the issuance of the legal notice demanding a sum of Rs. 12,26,45,187/- (Rupees Twelve crores Twenty Six lakhs Forty Five Thousand One hundred and Eighty Seven only). The respondent has caused reply dated 13.01.2021 denying the liability. After the exchange of these notices, the respondent has caused letter dated 15.01.2021 suggesting the appointment of a Sole Arbitrator to enter reference of the dispute and conduct the arbitration proceedings at Bengaluru Arbitration Centre, Bengaluru subject to the Rules therefor. The relevant part of the respondent’s letter dated 15.01.2021 reads as follows:-

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“In light of the aforementioned clauses, we may infer the fact that for adjudicating the matter the three Arbitrator are required to be appointed at the jurisdictional place at Mumbai or any other place in India. The appointment of three Arbitrator will attract heavy cost as professional fee of Arbitrator/s and the same will be equally borne by both of us. Therefore, we propose to appoint a sole Arbitrator at the Bengaluru Arbitration Centre for the operational convenience and saving the cost for both the Banks”.

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The petitioner, who did not respond to this letter dated 15.01.2021, has filed the present petition for appointment of a Sole Arbitrator.

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Though Sri Manu Prabhakar Kulkarni, the

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learned counsel for the respondent, contends that the dispute in the light of the respondent’s recent communication dated 15.07.2021 would be inchoate (as the respondent has made further claims) and therefore the petition would be pre-mature given the provisions of

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Section 21 of the Act, submits that the respondent’s apprehension at this stage is the possibility of the petitioner contending that the dispute must be confined to the claim made in the legal notice dated 23.12.2020. In response, Sri Pramod Nair, the learned counsel for the petitioner, submits that both the parties must be at liberty to put forth their respective claims and the respondent need not be restricted to the claim made in the legal notice dated 23.12.2020.

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With these submissions, the learned counsel also submit that a Former Judge of this Court be appointed as a Sole Arbitrator to enter reference of the dispute with unhindered opportunity to both the parties to file their respective claims on merits. They also submit that Hon’ble Dr. Justice N. Kumar, a Former Judge of this Court, could be appointed as the Sole Arbitrator to enter reference of the dispute and to conduct arbitration at the Bangalore Arbitration Centre

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according to Rules therefrom. In the light of these submissions, the following:

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ORDER

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(a) The petition is allowed. Hon'ble Dr. Justice N.Kumar, a Former Judge of this Court, Address: 'Gruha' Apartment No.101, Skyline Golden Ray Apartment, K.P. Poornachandra Tejasvi Road, Kempegowda Nagar, Gavipuram, Bengaluru-560 019, Mobile No: 94482 89019) is appointed as the sole Arbitrator to enter reference of the dispute between the petitioner and respondent and conduct the proceeding at the Arbitration and Conciliation Centre (Domestic and International), Bengaluru according to the Rules governing the Arbitration Centre.

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(b) The petitioner and the respondent, subject to the statement made on behalf of the petitioner, shall be at liberty to canvass all grounds on merits.

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order to the Arbitration and Conciliation Centre and the Hon'ble Dr. Justice N. Kumar, a Former Judge of this Court as required under the Appointment of Arbitrators by the Chief Justice of Karnataka High Court

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Scheme, 1996.

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SD/JUDGE

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mbb

Jana Small Finance Bank Limited v. Bank of Baroda

Case brief

What is this about?

What did the court decide?

Jana Small Finance Bank Limited v. Bank of Baroda

Case brief

What is this about?

What did the court decide?

What the court decided

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Statutes considered

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