Disposed

Global Cane Sugar Services Private Limited v. Rajasthan State Ganganagar Sugar Mills Limited

Rajasthan HC30 Aug 2024ARBAP/38/2024

Case brief

AI extract

What is this about?

Arbitration application under Section 11 seeking appointment of an arbitrator for claims of dues arising from an operation and maintenance contract. Finding a valid arbitration clause and respondent failure to appoint, the court appointed a sole arbitrator.

What the court decided

AI extract

Global Cane Sugar Services Private Limited Vs Rajasthan State… — Arbitration | Rajasthan HC (2024)

¶1

[2024:RJ-JP:37676]

¶2

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR

¶3

S.B. Arbitration Application No. 38/2024

¶4

M/s. Global Cane Sugar Services Private Limited, Having Its Office-4^th Floor, TDI Centre, Plot No. 7, Near Apollo Hospital, Jasola, New Delhi-110025 Through Its Authorized Representative Sh. Vijay Kumar Teotia S/o Late Sh. Bachan Singh Teotia, Aged About 62 Years

¶5

----Petitioner

¶6

Versus

¶7

Rajasthan State Ganganagar Sugar Mills Limited, 3Rd Floor, Centre Of Excellence For Revenue Research And Analytics Facilition, Near Aranya Bhawan, Jhalana Doongri, Jaipur, Rajasthan-302006 Through Its General Manager-Ho

¶8

Director-In-Charge, Rajasthan State Ganganagar Sugar Mills Limited, Fourth Floor, Nehru Sahakar Bhawan, Bhawani Singh Road, Jaipur, Rajasthan.

¶9

----Respondents

¶10

For Petitioner(s) : Mr. Pradeep Kumar Choudhary, Adv. For Respondent(s) : Ms. Supriya Rana, Adv. for Ms. Minakshi Jain, Adv.

¶11

HON'BLE MR. JUSTICE SUDESH BANSAL

¶12

Order

¶13

30/08/2024

¶14

This Arbitration Application has been filed under Sections 11 & 11(6) of the Arbitration & Conciliation Act, 1996 (hereinafter referred to as 'the A&C Act'), by the applicant for appointment of an Arbitrator seeking to adjudicate its claim of Rs.3,06,70,785/- + GST of Rs.1,02,73,766/- (total dues of Rs.4,09,44,551/-) and the interest @ 12% per annum against the respondents in relation to the work order of operation, maintenance and repairing of Sugar Factory with manpower and material under the agreement dated

[2024:RJ-JP:37676]

[ARBAP-38/2024]

(2 of 6)

07.10.2020, executed between the parties in pursuance of the acceptance of the bid of the applicant against NIT E-Bid dated 24.01.2020 issued by the respondents.

¶19

The respondents, in the reply to the Arbitration Application, has admitted the factum of the issuance of Notice Inviting Tenders (NIT) dated 24.01.2020 for Operation and Maintenance of Sugar Factory with manpower and material (Consumables, Spares Parts, Fuel, Packing Materials) at Chak 23-F, Kaminpura, Sriganganagar, Rajasthan, and issuance of letter of intent dated 16.09.2020 in favour of the applicant being declared as successful bidder. The respondents have also admitted execution of the agreement dated 07.10.2020 with the applicant in respect of aforesaid work order, but contended that the respondents had paid to the applicantCompany all the due amounts, and final settlement of dues had arrived at in the meeting held on 15.09.2023 at Head Office of the respondents at Jaipur. Thus, according to the respondents, there are no outstanding dues payable to the applicant against this contract and the claim made by the applicant is not sustainable. 3. Having considered the rival pleadings of both the parties, it appears that execution of the agreement dated 07.10.2020 between the applicant and the respondents is an admitted fact and the claim for the outstanding dues put forth by the applicant and sought to be referred to Arbitration, also arises out of such agreement. A copy of the agreement is available on record as Annexure-5. This agreement contains an arbitration agreement between parties to refer the dispute to Sole Arbitrator in Clause-8, which reads as under:-

(3 of 6)

[2024:RJ-JP:37676]

[ARBAP-38/2024]

"In case any dispute arising out of any matter related to the tender/ contract/ agreement, the matter will be referred to sole arbitrator appointed by Director Incharge, RSGSM whose decision shall be final and binding on both the parties. The place of arbitration shall be Sriganganagar. The fees and other expenses of the arbitrator shall be borne by both parties equally".

¶24

It is further undisputed that before filing of this Arbitration Application, the applicant served a legal notice dated 17.01.2024 (Annexure-10), upon the respondents, seeking appointment of an Arbitrator as per the arbitration agreement, but the respondents have not appointed any Arbitrator. Hence, this Arbitration Application has been filed after expiry of 30 days, on 19.03.2024.

¶25

The High Court being a referral Court, while exercising its powers under Section 11 of the A&C Act, 1996, is expected to look into the matter as to existence of an arbitration agreement between parties in view of clause 11(6A) of the A&C Act,1996 which reads as under:-

¶26

“(6A) 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.”

¶27

A seven judges’ Bench of the Hon’ble Supreme Court in recent judgment dated 13^th December 2023, delivered In Re: Interplay Between Arbitration Agreements Under The Arbitration and Conciliation Act 1996 And the Indian Stamp Act, 1989 [AIR 2024 SC 1] , has observed in Para Nos.152 &

[2024:RJ-JP:37676]

[ARBAP-38/2024]

(4 of 6)

154 that the omission of Section 11(6A), through Arbitration and Conciliation (Amendment) Act, 2019 (Act 33 of the 2019), has not been notified in the official gazette and therefore, the said provision continues to remain in full force. In this judgment, placing reliance on previous judgments of the Apex Court delivered in cases of Duro Felguera, S.A. Vs. Gangavaram Port Limited: (2017) 9 SCC 129 and Mayavati Trading Private Limited Vs. Pradyuat Deb Burman: (2019) 8 SCC 714 , it has been held that the legislature confined the scope of reference under Section 11(6A) to the examination of existence of an arbitration agreement. It has been held that the referral Court only need to consider one aspect to determine the existence of an arbitration agreement- whether underlying contract contains arbitration agreement which provides for arbitration pertaining to the dispute which has arisen between parties to the agreement. Thus, this Court has to rely upon the provision of Section 11(6A) of the A&C Act, which is extracted hereinabove.

¶32

It may be noted that Section 11(6A) was added by the Legislature by introducing the Arbitration and Conciliation (Amendment) Act, 2015 (Act 3 of 2016), and there was an impression that the provision of Section 11(6A) has been omitted vide Arbitration and Conciliation (Amendment) Act, 2019 (Act 33 of the 2019), but the present prevailing position about such proposition of law, has been clarified by the seven judges’ Bench of the Apex Court in the above referred judgment recently delivered on 13^th December 2023.

¶33

Finally, this Court comes to the conclusion that a written arbitration agreement exists between the parties, and the

[2024:RJ-JP:37676]

[ARBAP-38/2024]

(5 of 6)

respondents have failed to appoint an Arbitrator. Therefore, a sole impartial and neutral Arbitrator is required to be appointed by this Court to adjudicate the dispute of claim of the applicant against the respondents.

¶38

Accordingly, the Arbitration Application succeeds and this Court constitutes Arbitration Tribunal of Sole Arbitration of Mr. Vishnu Dutt Sharma, (Retired District & Sessions Judge), Mobile No.9414376586, [email protected], Address: 114, N-Block, Second Floor above State Bank of India, Sri Gangangar , to adjudicate the dispute between parties in accordance with the provisions of the Arbitration and Conciliation Act, 1996.

¶39

The appointment of the Sole Arbitrator is subject to the declarations being made under Section 12 of the Arbitration & Conciliation Act, 1996 with respect of independence and impartiality, and the ability to devote sufficient time to complete the arbitration within the prescribed period.

¶40

The arbitration fee to the Sole Arbitrator shall be payable in accordance with the provisions contained in the Manual of Procedure for Alternative Dispute Resolution, 2009 as amended by the Manual of Procedure for Alternative Dispute Resolution (Amendment), 2017 vide notification dated 23.03.2017 read with 4^th Schedule appended to the Act of 1996.

¶41

The Registry is directed to intimate Arbitrator - Mr. Vishnu Dutt Sharma, (Retired District & Sessions Judge), for his approval and declaration in terms of Section 11(8) read with Section 12(1) of the A&C Act, 1996.

¶42

All other issues may be raised by the parties before the Arbitrator, which shall be considered in accordance with law.

[2024:RJ-JP:37676]

[ARBAP-38/2024]

(6 of 6)

Since as per Section 29A of the Arbitration and Conciliation Act, 1996, the arbitration proceedings are required to be concluded within scheduled time as stipulated therein, it is expected from the parties to appear before the Arbitrator on 30.09.2024 or any other date as informed by the Arbitrator to parties or agreed between parties with the consent of Arbitrator, and further parties shall provide their respective E-mail/ Contact Number/ Mobile Number as also of their authorized representatives/lawyers, appearing on their behalf before the Arbitration Tribunal, in order to facilitate the Arbitrator to send information to the parties, whenever required. The information send by the Arbitrator, on such address/ E-mail/ cellphone of the parties/ their authorized representatives/lawyers, shall be treated as sufficient unless same is not changed.

¶47

The Arbitration Applications stand disposed of.

¶48

(SUDESH BANSAL),J

¶49

SUNIL SOLANKI /73

Global Cane Sugar Services Private Limited v. Rajasthan State Ganganagar Sugar Mills Limited

Case brief

What is this about?

What the court decided

Global Cane Sugar Services Private Limited v. Rajasthan State Ganganagar Sugar Mills Limited

Case brief

What is this about?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

Mahaveer Singh S/O Kailash Vs Shailendra @ Shoru Adopted Son of Babulal

Smt. Anisa Begam W/O Late Shri Mujaffar Khan Vs Saddiq S/O Jahur

M/S Hungama Fresh Food Comp Vs U O I and Anr.

M/S Rajendra Prasad Bansal Vs Union of India, through General Manager

M/S Rajendra Prasad Bansal Vs Union of India, through General Manager

Smt. Pushpa W/O Vinod Kumar Vs Shri Hansraj S/O Shri Mohan Singh