Allowed

Govindjee Dairy Milk Pvt. Ltd. v. Jaipur Zila Dugdh Utpadak Sahakri Sangh Ltd.

Rajasthan HC4 Apr 2025ARBAP/128/2024

Case brief

AI extract

What is this about?

Dispute arose from a milk-processing supply agreement breached before completion of its term. The respondent's unilateral appointment of an employee as sole arbitrator was declared non-est and void; the parties agreed to a retired judge as neutral sole arbitrator.

What the court decided

AI extract

Govindjee Dairy Milk Pvt. Ltd. Vs Jaipur Zila Dugdh Utpadak… — Arbitration | Rajasthan HC (2025)

¶1

[2025:RJ-JP:15270]

¶2

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR

¶3

S.B. Arbitration Application No. 128/2024

¶4

Govindjee Dairy Milk Pvt. Ltd., Having Its Registered Office At Govindjee Dairy Plant Nh 52(11), Village Dhodsar, Sikar Road, Tehsil-Chomu, District Jaipur-303712 Through Its Managing Director Mr. Narender Dixit.

¶5

----Petitioner-Applicant

¶6

Versus

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Jaipur Zila Dugdh Utpadak Sahakri Sangh Ltd, Having Its Registered Office At Saras Jaipur Dairy, Near Gandhi Nagar Railway Station, Jaipur 302017 Through Its Managing Director.

¶8

----Respondent-Non applicant

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For Petitioner(s)	: Mr. Yellop Singh,
	Mr. AnujSharma
For Respondent(s)	: Abhinav Sharma through VC

¶10

HON'BLE MR. JUSTICE SUDESH BANSAL

¶11

Order

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04/04/2025

¶13

Instant Arbitration Application under Section 11 (6) of the Arbitration and Conciliation Act, 1996, has been filed by the applicant-company for appointment of an Arbitrator to adjudicate/ resolve the dispute between the parties arising out of Agreement dated 30.09.2023, which contains arbitration clause as under:-

¶14

" Arbitration Clause:

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For settlement of any dispute arising out of this order, Jaipur shall be the Jurisdiction irrespective of any Jurisdiction clause mentioned in your correspondence. The arbitration proceedings shall be governed by arbitration under the provisions of the Arbitration & Conciliation Act for the time being in force and the same shall be final and binding on both the parties. If any dispute or difference shall at any time arise between the two parties in respect of or concerning any of this herein contained or arising out of this RAL/supply order/tender/agreement as to the rights,

(2 of 5)

[2025:RJ-JP:15270]

[ARBAP-128/2024]

liabilities or duties of the said parties here under or as to the recovery of any amount, the same shall be referred to the sole arbitrator appointed as per the provision of Arbitration and conciliation Act may refer the dispute to any officer of JZDUSS Ltd. for adjudication. The decision of the Sole Arbitrator shall be final and binding on both the parties. The arbitration proceedings shall be governed by arbitration under the provisions of the Arbitration & conciliation Act for the time being in force and the same shall be final and binding on both the parties. Procedure for appeal is mention at Annexure.”.

¶20

Heard learned counsel for both the parties and perused the record.

¶21

Execution of agreement dated 30.09.2023 (Ann.6) between the parties is an admitted fact whereunder applicant-company agreed with the respondent for carrying out milk processing, packing and manufacturing of milk products of different varieties in various pack and sizes. The agreed term of agreement was for 12 months, which was further extendable for another 12 months, commencing from the date of issuance of the work order by the respondent.

¶22

The claim of applicant-company is that respondent has breached the terms and conditions of agreement and stopped the issuance of work to the applicant company w.e.f. 15.05.2024 before completion of term of 12 months, that too without assigning any reasons and further the outstanding bills and earnest money deposit have not been released. Hence, in order to settle such dispute, the Arbitration clause contained in the agreement, referred hereinabove, was invoked by the applicantcompany by issuing a legal notice dated 15.08.2024 and thereafter instant arbitration application has been filed.

[2025:RJ-JP:15270]

[ARBAP-128/2024]

(3 of 5)

Learned counsel appearing on behalf of respondent though has not filed reply to the arbitration application, but verbally repudiates the claim of applicant-company, and submits that rather the respondent has a counter claim against the applicantcompany, because applicant-company did not perform the work orders as per the terms of agreement dated 30.09.2023.

¶27

It appears that at one point of time, vide order dated 21.08.2024, respondent had appointed Mr. Surendra Dodvadiya, Dy. Manager (Engineering) as sole Arbitrator but since same was unilateral appointment and was made without consent of applicant-company, hence same cannot be given approval. It is noteworthy that such unilateral appointment of Arbitrator by the respondent has also been disapproved by the Commercial Court No.1, Jaipur Metro-II in its order dated 30.08.2024, passed in the proceedings under Section 9 of the Arbitration and Conciliation Act, 1996. Otherwise also, legal position in this respect is well settled as per the judgment of Hon’ble Supreme Court in case of TRF Ltd. Versus Energo Engineering Projects Ltd.: AIR 2017 SC 3099 , which has been followed and reiterated by the Supreme Court in case of Perkins Eastman Architechs DPC & Anr.

¶28

Versus HSCC (India) Ltd.: AIR 2020 SC 59 , wherein it has been expounded that the interested party to the lis is not authorized to appoint the Arbitrator and unilateral appointment of Arbitrator, that too an employee of either of the party, has not been recognized as an independent and neutral Arbitrator. Hence, in the present matter, an independent, impartial and neutral Arbitrator is required to be appointed by this Court. Thus, this Court finds that the appointment of Mr. Surendra Dodvadiya, Dy.

[2025:RJ-JP:15270]

[ARBAP-128/2024]

(4 of 5)

Manager (Engineering) as sole Arbitrator by respondent vide order dated 21.08.2024 is non-est and void.

¶33

Learned counsel for the both parties, during the course of argument, have agreed for appointment of an independent, impartial and neutral Arbitrator to adjudicate/ resolve the present dispute between the parties and have agreed to appoint Hon’ble Mr. Justice Pankaj Bhandari (Retired), Former Judge of the Rajasthan High Court as sole Arbitrator in the present matter of dispute.

¶34

As a final result, the instant arbitration application is allowed and this Court appoints Hon’ble Mr. Justice Pankaj Bhandari (Retired), Former Judge of the Rajasthan High Court, Mob. No.9460437978;E-mail:[email protected]; Address:Bhandari Farm House, Near Hingoniya Goushala, Jaipur, as a Sole Arbitrator to adjudicate/resolve the dispute between parties in accordance with provisions of the Arbitration and Conciliation Act, 1996.

¶35

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

¶36

The arbitration fee of 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

[2025:RJ-JP:15270]

[ARBAP-128/2024]

(5 of 5)

4^th Schedule appended to the Arbitration & Conciliation Act, 1996 or as determined by the Arbitrator with consensus of parties. 11. The Registry is directed to intimate Arbitrator Hon’ble Mr. Justice Pankaj Bhandari (Retired), for his approval and consent to act as Arbitrator.

¶41

All other issues may be raised by the parties before the Arbitrator, which shall be considered in accordance with law. 13. 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 28.04.2025 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 sent 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.

¶42

The Arbitration Application stands disposed of accordingly.

¶43

(SUDESH BANSAL),J

¶44

TN/67

Govindjee Dairy Milk Pvt. Ltd. v. Jaipur Zila Dugdh Utpadak Sahakri Sangh Ltd.

Case brief

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Govindjee Dairy Milk Pvt. Ltd. v. Jaipur Zila Dugdh Utpadak Sahakri Sangh Ltd.

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