The Court held that an arbitration request under Section 11 was not maintainable as the applicant had already filed a petition to set aside the arbitral award which was pending before the District Court, making parallel proceedings unsustainable.
Arbitration Request AR No. 15 of 2018 rejected.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE SMT. JUSTICE P.V.ASHA
THURSDAY ,THE 13TH DAY OF DECEMBER 2018 / 22ND AGRAHAYANA, 1940 ARBITRATION REQUEST NO.15 of 2018
APPLICANT:
RADHA.V AGED 43 YEARS,DAUGHTER OF (LATE) GOPALAN, PROPRIETRIX, SREEKRISHNA AUTO FUELS,B.P.C.L DEALER,RAILWAY STATION ROAD, PALAKKAD,RESIDING AT 'SWAPNA', KESAVAMENON COLONY,OLAVAKODE MURI, PALAKKAD VILLAGE & TALUK,PALAKKAD DISTRICT 678 002
BY ADVS. SRI.P.B.KRISHNAN SRI.P.B.SUBRAMANYAN SRI.P.M.NEELAKANDAN SRI.SABU GEORGE
RESPONDENT
M/S. BHARATH PETROLEUM CORPORATION LTD BHARAT BHAVAN, 4 & 6 CURRIMBOY ROAD,BALLARAD ESTATE, MUMBAI 400 001REPRESENTED BY ITS TERRITORY MANAGER(RETAIL)CALICUT TERRITORY, 3RD FLOOR, CEEKAY TOWERS,KANNUR ROAD, NADAKKAVU WEST,KOZHIKODE 673 011
BY ADVS. SRI.M.GOPIKRISHNAN NAMBIAR SRI.JOSON MANAVALAN SRI.K.JOHN MATHAI SRI.KURYAN THOMAS SRI.PAULOSE C. ABRAHAM SRI.P.GOPINATH (SR.)
THIS ARBITRATION REQUEST HAVING COME UP FOR ADMISSION ON 13.12.2018, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:
AR.No.15 of 2018
2
JUDGMENT
Petitioner has entered into an agreement with
the respondent based on which she is operating a
petrol pump. The agreement is being renewed every year. Her license and dealership were terminated and the same was challenged before this court in W.P.(C) No.37245 of 2015, when petitioner was set at liberty to seek remedy under the Arbitration and Conciliation Act, 1996 ('the Act' for short). Clause 19(a) of Annexure-B Memorandum of Agreement read as follows:
“ Any dispute or difference of any nature whatsoevr, any claim, cross-claim, Counter-claim or set off of the Company against the Licensee or regarding any right, liability, act, omission or account of any of the parties hereto arising out of or in relation to this agreement shall be referred to the Sole Arbitration of the Director(Marketing) of the company or of some Officer of the Company who may be nominated by the Director(Marketing). The licensee will not be entitled to raise any objection to any such arbitrator on the ground that the arbitrator is an officer of the company or that he has dealt with the matters to which the Contract relates or that in the course of his duties an an Officer of the Company, he had expressed view on all or any other matters in dispute or difference. In the event of the arbitrator to whom the matter is originally referred being transferred or vacating his office or being unable to act for any reason, the Director(Marketing)as aforesaid at the time of such transfer, vacation of office or inability to
AR.No.15 of 2018 3
act may in the discretion of the Director(Marketing) designate another person to act as arbitrator in accordance with the terms of the agreement to the end and intent that the original Arbitrator shall be entitled to continue the arbitration proceedings notwithstanding his transfer or vacation of office as an officer of the Company if the Director(Marketing)does not designate another person to act as arbitrator on such transfer, vacation of office or inability or original arbitration. Such person shall be entitled to proceed with the reference from the point at which it was left by his predecessor. It is also a term of this contract that no person other than the Director(Marketing) of the Company or a person nominated by such Director(Marketing)as aforesaid shall act as arbitrator hereunder. The award of the arbitrator so appointed shall be final, conclusive and binding on all parties to the agreement subject to the provisions of the Arbitration & Conciliation Act 1996 or any statutory modification or reenactment thereof and the rules made thereunder”.
The Sole Arbitrator, as per the agreement is the Director (Marketing) of the Company or an Officer of the Company to be nominated by him. The petitioner thereafter, as per Annexure-G notice dated 24.05.2016 requested the respondent for the appointment of an Arbitrator. Thereupon the respondent issued Annexure-H letter dated 19.07.2016 asking the petitioner to forward a copy of the judgment in order to consider her request.
Thereafter the respondent, as per letter
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dated 09.08.2016, appointed Adv.Rashmi K.V as Sole Arbitrator. However the petitioner did not appear before the Arbitrator and therefore as per Annexure-I award dated 17.12.2016 the Arbitrator terminated the proceedings under section 25(1) of the Arbitration and Conciliation Act 1996.
arbitrator and the same is pending before the Court of Additional District Judge-VIII, Ernakulam. This Arbitration Request is filed
thereafter alleging that the Director(MARKETING) had became incompetent to appoint an Arbitrator.
Relying on the judgment of the Apex Court in ' TRF LIMITED Vs. ENERGO ENGINEERING PROJECTS LIMITED',(2017) 8 SCC 377, it is argued that the Director cannot act as an Arbitrator or nominate an arbitrator.
Therefore, according to the petitioner, the
appointment of the Arbitrator as well as the award are null and void.
affidavit stating that the petitioner has already
AR.No.15 of 2018 5
preferred an Arbitration (O.P) which is pending before the District Court, Ernakulam for setting aside the award dated 17.12.2016 passed by the Sole Arbitrator. During the pendency of such original petition filing of this request before this Court for appointment of an Arbitrator under Section 11 is unsustainable. It is stated that the Arbitrator, who was appointed had issued notice
to both parties and requested to file claim statement. The notice issued by the Arbitrator was served on petitioner on 31.08.2016 and another notice was issued on 27.09.2016 asking the
petitioner to file a claim statement within 10 days from the date of receipt of notice. Since the petitioner did not respond, the Arbitrator issued
another notice dated 28.11.2016, fixing the sitting to 17.12.2016 for submitting the claim statement. It is stated that though the petitioner received notice on 05.12.2016, she failed to
submit the claim statement on that day and accordingly Arbitration award was passed under section 25(1) of the Act. Therefore, respondent's
AR.No.15 of 2018 6
contention is that the petitioner should have raised these issues, in case the petitioner had any objection, before the Arbitrator itself. It is also stated that there was no occasion for the petitioner to file an Arbitration Request before this Court and the right of the respondent to make an appointment of the Arbitrator is not forfeited.
appointment of the Arbitrator by the
Director(Marketing) is null and void in the light of the judgment of the Apex Court in ' TRF LIMITED
Vs. ENERGO ENGINEERING PROJECTS LIMITED' (2017)8 SCC
AR.No.15 of 2018 7
I find that such an arbitration request is not maintainable, under Section 11 of the Act, in these circumstances.
Hence the Arbitration Request is rejected.
Sd/-
P.V.ASHA
JUDGE
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APPENDIX
PETITIONER'S EXHIBITS:
| ANNEXURE 'A' | DATED 11.07.2009- A TRUE COPY OF THE MEMORANDUM OF AGREEMENT BETWEEN THE PARTIES |
|---|---|
| ANNEXURE 'B' | DATED 18.02.2014- A TRUE COPY OF THE MEMORANDUM OF AGREEMENT BETWEEN THE PARTIES |
| ANNEXURE 'C' | DATED 02.12.2015- A TRUE COPY OF THE TERMINATION LETTER ISSUED BY THE RESPONDENT TO THE PETITIONER |
| ANNEXURE 'D' | DATED 24.12.2015- A TRUE COPY OF THE TERMINATION LETTER ISUED BY THE RESPONDENT TO THE PETITIONER |
| ANNEXURE 'E' | DATED 08.12.2015- A TRUE COPY OF THE JUDGMENT IN WP(C) NO.37242 OF 2015 PASSED BY THIS HON'BLE COURT |
| ANNEXURE 'F' | DATED 31.03.2016- A TRUE COPY OF THE JUDGMENT IN W.P(C) NO.989 OF 2016 |
| ANNEXURE 'G' | DATED 24.05.2016- A TRUE COPY OF HTE NOTICE ISSUED BY THE PETITIONER TO THE RESPONDENT COMPANY |
| ANNEXURE 'H' | DATED 19.07.2016- A TRUE COPY OF THE COMMUNICATION ISSUED BY THE RESPONDENT TO THE PETITIONER |
| ANNEXURE 'I' | DATED 17.12.2016- A TRUE COPY OF THE AWARD PASSED BY THE SOLE ARBITRATOR, RASHMI K.V |
| ANNEXURE 'J' JJ |
DATED 20.10.2017- A TRUE COPY OF HTE INTERIM ORDER IN O.P(ARB) NO.53 OF 2017 PASSED BY THE LEARNED ADDITIONAL DISTRICT JUDGE, ERNAKULAM |
1 issue framed by the court
Whether an arbitration request under Section 11 of the Arbitration and Conciliation Act is maintainable when the applicant has already filed a petition to set aside the award pending before a District
RADHA V
M/S BHARATH PETROLEUM CORPORATION LTD
P.V. ASHA
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
