EVEREST INDUSTRIES LTD v. S. GROWRITE SUBSTRATES INDIA PVT. LTD

1. The petitioner is a cornpany dealing with supply and erection of pre designed steel buildings.

2. Around July, 2009, the respondent approached the petitioner that it is setting up a unit in the name of and style of \zIlS Growrite Substrates (India).t. Prrt. Limited at Theni, Madurai, Tarnil Nadu and requested the petitioner to '. subrnit a proposal for supply of a material for pre ettgineered building and for erection thereof.. 3. The petitioner subrnitted its proposal with detailed tenns and conditions, held discussions with the respondent leading to finalization of contract and placed an order on the petitroner on 9d' July, 2009. The petitioner duly supplied the material, performed its obligations raised, invoices and forwarded the same for payrnent to the respondent. The petitioner received solne payments against the said invoices and a snm of % 'aj- Arb. P. No.J.97/2072 Poge 7 of 4 2013:DHC:8370 v * l[2] Rs.17,67,5201- remained due and payable by the respondent. As per the agreement dated 9ft July, 2009 between the parties, it was agreed that in the event of the respondent failing to make the payment, it shall be liable to pay interest on the outstanding amount @18% per annum'

4. The petitioner got a legal notice dated 10tr October, 2011 issued to the respondent dernanding the said outstanding amount along with interest. As per the agreement dated 9u' July, 2009 between the parties, it was agreed to the adjudication of disputes arising out of the agreement by arbitration. Thereby the petitioner invoked the arbitration clause and issued a notice dated 27|fr January, 2012 to the respondent thereby appointing Sh.S.K.Mahajan (Retd.) Judge as the sole arbitrator and called upon the respondent to give its concurrence to the said appointment. The respondent vide its reply dated 22nd Febmary,2012 admitted that the disputes between the parties were to be resolved by arbitration but did not give its consent to the appointrnent of Sh.S.K.Mahajan, Retd. Judge, Delhi High Court, as the sole arbitrator.

5. As per the arbitration agreement between the parties, ttnresolved issues will be settled by arbitration as per the Indian fubitration and Conciliation Act, 1996. The venue will be at New Delhi and all the issues shall be subject to the juisdiction of Courts in New Delhi. The petitioner's claims against the respondent exceed a value of Rs.17,67,520/- together with interest @18% per annum. Therefore, the petitioner has filed the present petition under Section 1l of the fubitration and Conciliation Act, 1996 for appointment of a sole Arbitrator to adjudicate upon the disputes and differences arisen between the parties.

6. Notice was issued to the respondent. Upon service, the respondent has filed its reply denying fl1e aforesaid claim rnade by the petitioner. Arb.P. No.1-g7/20L[2]

8.

7. I have heard the learned counsels for the parties and have perused the contents of the petition coupled with the documents placed on the record. Duing the course of argurnents, the learned counsel for the respondent has only raised an objection with regard to territorial jurisdiction of this Court. He says that since the respondent is from Chennai, therefore, this Court has no jurisdiction to entertain the petition.. However, it is not denied by him that under clause 13 where the venue of the arbitration as mutually agreed between the parties is of Delhi. The jndgrnent of Supreme Court in the matter of Bhurat Alumfuium Co. Ltd. Vs. Kaiser Aluminium Technical Services, 2012 (9) SCC 552 (Para 96) reads as under: *96. we are of the opinion, the tenn "subject matter of the arbitration" cannot be conftised with "subject matter of the suit". The term "strbject l1atter" in Section 2(1)(e) is confined to Paft I. It has a reference and connection with the process of dispgte resolution. Its purpose is to identiff the colrts having supervisory control over the arbitration proceedings. Hence, it refers to a court which. would essentially be a court of the seat of the arbination process. In our opinion, the provision in Section 2(1)(e) has to be consffued keeping in view the provisions in Section 20 which give recognition to party autonomy. Accepting the narrow construction as projected by the learned counsel for the appellants would, in fact, render Section 20 nugatory. In our view, the legislature has intentionally given jurisdiction to two courts i.e. the court which would have jurisdiction where the cause of action is located and the courts where the arbitration tirkes place. This was necessary as on many occasions the agreement may provide for a seat of arbitration at a place which would be neutral to both the parties' " "" a Arb. P. No.197/201-2 t[1] I

9. In view of the above, the objection raised by the learned counsel for the respondent is without any substance and the same is rejected.

10. The present petition is allowed. Mr. Justice S.K.Mahajan, (N4obile No.98733 04200124615134) a Retired Judge of this Court is appointed as a sole Arbitrator to adjudicate upon the disputes and difference that have arisen between the parties. The parties also agreed that the arbiration be taken place under the aegis of Rules of the Delhi High Court Arbitration Centre. The fees of the Arbitrator be also paid under the said Rules. 11.. The petition is disposed of in the above said terms.

12. A copy of this order be communicated to the learned Arbitrator as well as the Secretary to the Arbitration Cenfre forthwith. Copies of the same be also given dasti to the learned counsels for the parties. &?sffiotA*ffihrr \ JUDGE FEBRUARY 04, 2OI[3] -J