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ILandFS Skills Develop v. Automotivesipvt.Lt

Orissa HC8 Oct 2015ARBP/38/2014

Case brief

AI extract

What is this about?

In an application under Section 11(6) of the Arbitration and Conciliation Act, 1996, the Court appointed a sole arbitrator to adjudicate a dispute arising from a lease agreement where parties failed to concur on the arbitrator's nomination.

What did the court decide?

Appointment of Shri Justice B.K. Patel as sole Arbitrator; venue fixed at High Court of Orissa Arbitration Centre; proceedings to be conducted per HC Orissa Rules, 2014.

The brief facts of the case is that the petitioner Company entered int o a Lease Agreement with the opposite party for taking on rent the premises situated at Plot N os.22 & 23, Zone-D, Sector-A, Mancheswar Industrial Estate, Bhubaneswar, including open space and parking for a period of 5 years, vide Lease Deed dated 03.1.2013. The said Lease Deed con tained a Arbitration Clause, which reads as under:-

It is hereby agreed between LESSOR and LESSEE, the parties hereto, that the le ase shall be executed in the manner and form outlined in this Lease Deed. In the event of any disagreements or disputes arising out of this Lease Deed between LESSOR and LESSEE, such disa greements or disputes shall be referred to an independent arbitrator(s) and the provisions of the Arbitration and Conciliation Act, 1996 (Central Act 26 of 1996) shall apply to the arbitra tion proceedings. The Arbitration proceedings shall be conducted in English language and the seat of the Arbitration proceedings shall be at New Delhi.

Pursuant to the execution of the Lease Deed, the petitioner Company deposited a sum of Rs.18,45,000/- with the opposite party towards security deposit and after taking poss ession of the premises, the petitioner Company invested a huge amount towards renovation and i nstallation of machineries and equipments. During subsistence of the lease, the petitioner Co mpany came to learn that there is a dispute with regard to the ownership of the property with IDCO, who is the original owner of the land. As the opposite party had sublet the premises to the petitioner Company, in violation of the terms of the agreement entered into with the IDCO , the allotment of land made in favour of the opposite party was cancelled and the land was re sumed by IDCO. Against the said decision of the IDCO, the opposite party moved the Civil Judg e (Jr.Divn.), Bhubaneswar, in Civil Suit No.379 of 2013 and obtained an interim order of statu s quo.

The petitioner Company on coming to know that the property in question is disputed and there is pending litigations between the IDCO and the opposite party, the pet itioner Company issued notice to the opposite party for termination of the Lease Deed and took steps for vacating the premises.

It is the case of the petitioner Company that while vacating the premi ses and removing the machineries and equipments installed by them, the opposite party did not allow the petitioner Company to remove 160 KVA Diesel Generator Set and Blower belonging to th e petitioner Company. The petitioner Company vide notice dated 18.9.2014 requested the opposi te party to release the 160 KVA Diesel Generator Set and Blower within 7 days, failing which, the petitioner Company would be constrained to take resort to legal proceedings. Subsequently , the petitioner Company were forced to move the learned District Judge, Khurda, under Section 9 of the Arbitration and Conciliation Act, 1996, vide ARBP No.530 of 2014, for taking release of the 160 KVA Diesel Generator Set and Blower.

It is the further case of the petitioner that pursuant to notice, the opposite party instead of releasing the said plant and machineries/equipments, issued a notice to the petitioner Company nominating Shri Justice Bimal Prasad Das, a former Judge of this Co urt, to act as the Arbitrator to adjudicate the dispute between the parties. As the petitione r Company did not agree to such nomination of Arbitrator by the opposite party, it has approac hed this Court in the present application filed under Section 11(6) of the Arbitration and Con ciliation Act, 1996, for appointment of Arbitrator.

Learned counsel for the petitioner Company submits that as the Lease D eed entered into between the parties has an arbitration clause, as detailed above and as there is a dispute between the parties and in absence of a consensus with regard to the nomination of a Arbitrator, this Court has the jurisdiction to appoint the Arbitrator in exercise of its powers conferred under Section 11(6) of the Arbitration and Conciliation Act, 1996.

Learned counsel for the opposite party submits that the opposite party had invested a huge amount towards repair and renovation of the premises and due to sudden te rmination of the Lease Deed, it has suffered loss/damage to the tune of Rs.2.80 crores, it had nominated Shri Justice Bimal Prasad Das, a former Judge of this Court to act as the Arbitrato r, as per clause-19 of the Lease Deed. It is submitted that instead of agreeing to the nomina tion made by the opposite party or suggesting any other name, the opposite party has approache d this Court under Section 11(6) of the Arbitration and Conciliation Act, 1996, for appointmen t of Arbitrator. However, learned counsel for the opposite party has no serious objection if the Arbitrator is appointed by this Court, to adjudicate the dispute between the parties.

itration clause, as detailed above. As there is a dispute between the parties and they have f ailed to agree with regard to appointment of Arbitrator to adjudicate the dispute, this Court has the jurisdiction to appoint the Arbitrator in exercise of its powers conferred under Secti on 11(6) of the Arbitration and Conciliation Act, 1996.

In view of the above, I hereby appoint Shri Justice B.K. Patel, a form er Judge of this Court, as the sole Arbitrator to adjudicate the dispute between the parties. The venue of the arbitration shall be at the High Court of Orissa Arbitration Centre and the p roceeding shall be conducted by the learned Arbitrator as per the High Court of Orissa Arbitra tion Centre (Arbitration Proceedings) Rules, 2014.

ILandFS Skills Develop v. Automotivesipvt.Lt

Case brief

What is this about?

What did the court decide?

ILandFS Skills Develop v. Automotivesipvt.Lt

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

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