Full Text
HIGH COURT OF DELHI
O.M.P. (I) (COMM) 21/2019 & I.A. No.6725/2019
Date of Decision: 28th May, 2019 HIMALAYAN HELI ADVENTURES PRIVATE LIMITED..... Petitioner
Through Mr.Kirit S. Javali, Mrs.Mana Imtiyangla and Ms.Priya
Sharma, Advs.
Through Ms.Smitakshi Talukdar and Mr.Rahul Jain, Advs.
JUDGMENT
1. This petition under Section 9 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the „Act‟) has been filed inter-alia praying for the following reliefs: “i) Pass an ad-interim measure of protection in favour of the Petitioner in terms of Section 9 (ii) (b) of the Arbitration and Conciliation Act, 1996 for securing the amount of Rs.2,17,57,100 (Rupees two crores seventeen lacs fifty seven thousand and one hundred) by directing the Respondent No.1 company to deposit the said amount before this Hon'ble Court pending resolution of disputes before the Arbitrator(s); 2019:DHC:2894 O.M.P. (I) (COMM) 21/2019 Page 2 ii) Pass an ad-interim measure of protection in terms of Section 9 (ii)(c) and/or (d) of the Act directing/restraining the Respondent No.1 company not to de-register, change the ownership and/or export its helicopters VT-UTA, VT-UTB and VT-UTC out of the country pending resolution of disputes before the Arbitrator(s).”
2. The primary issue to be determined in the present petition is as to whether there is a binding Arbitration Agreement between the parties.
3. It is the case of the petitioner that on 05.09.2017 the petitioner met respondent Nos.[4] and 5 to negotiate the terms of hiring two helicopters out of three owned by the respondent no.1 company for the Heli-skiing Season 2018-19. It is further averred that the parties had similar agreements in 2011, 2012, 2015, and 2016-17. Vide email dated 18.09.2017, the respondents communicated the financial terms, including the rate, period of contract and fuel cost etc. to the petitioner for the Heli-skiing Season 2018-19. In the said email the respondent no.5 further stated as under: “The detailed draft Agreement is under preparation and shall follow. In the meantime (sic), kindly transfer the advance payment in our account.”
4. Pursuant to the above email, the petitioner made certain payments to the respondent no.1, while the respondent no.1 by its letter dated 15.11.2017 requested the Embassy of India, Switzerland for employment visa for one of the pilots to visit India. O.M.P. (I) (COMM) 21/2019 Page 3
5. By an email dated 13.02.2018 the respondent informed the petitioner of certain changes in draft Agreement that had been “decided”. The said email further states as under: “Please make the correction as above and send as the signed Agreement today positively.”
6. On the same day, the petitioner made a payment of approximately Rs.35,88,000/- to the respondent no.1 towards Flying Charges and Ground Running Charges. Further by an email dated 15.02.2018 the petitioner sent a copy of the Agreement to the respondent no.1 stating as under: “Goel Sahib, attached is the corrected version of the agreement corrections as per Poojas letter ji... Call follows ji Best regards, Manjeev”
7. It is not disputed by the respondents that the copy of the Agreement attached with this email incorporated all the changes and infact, only those changes which had been “decided” and communicated by the respondents to the petitioner vide email dated 13.02.2018.
8. The respondents thereafter supplied one helicopter to the petitioner on 20.02.2018. The petitioner thereafter made repeated attempts to contact the respondent no.1 and its officers primarily for O.M.P. (I) (COMM) 21/2019 Page 4 the supply of the second helicopter, which as per the case of the petitioner, was essential for proper running of its operation.
9. In this process one text message addressed by the petitioner to the respondent no.5 on 17.02.2018 has been relied upon by the counsel for the respondents to suggest that the same indicates that the Agreement was under discussion and had not been finalized. The said text message is reproduced hereinbelow: “Good morning Goel Sahib l have been trying to talk to you for a few days now. Seems you are really busy... I have been meaning to finalise the agreement with you and secondly request that please send one of your ski basket with the Helos ji,,, BTW we are still awaiting FATAs and I am very nervous about the matter.... Wish you good day ji, Manjeev.”
10. Certain payments were also made by the petitioner for the helicopters that had been supplied by the respondents.
11. The claim of the petitioner in present petition is that due to delay in supply of the second helicopter the petitioner has suffered damages which it seeks recover through arbitration, however, as the respondents are in the process of de-registering/changing the ownership of the helicopters, the petitioner may not recover its money even if the award is passed in its favour.
12. As recorded above, the main disputes between the parties pertain to existence of the Arbitration Agreement with the exchange of emails as mentioned hereinabove. While it is the case of the petitioner O.M.P. (I) (COMM) 21/2019 Page 5 that such an Agreement came into existence, this is denied by the respondents. The respondents insisted that as the Agreement was not signed by the petitioner, the emails/SMS messages cannot be read as acceptance of the terms of the Agreement and as such no Arbitration Agreement came into being between the parties.
13. I have considered the submissions of the learned counsels for the parties. Admittedly, the petitioner not only made the payment on 13.02.2018 of an amount of more than Rs.35 lacs to the respondents but also by the email dated 15.02.2018 sent the copy of the Agreement duly incorporating all changes suggested by the respondents therein by email dated 13.02.2018. The respondents in turn duly supplied first helicopter to the petitioner on 20.02.2018 and the second helicopter on 05.03.2018. The petitioner has thereafter made further payments in accordance with the Agreement to the respondents. In view of this conduct, it is not possible to accept the contention of the respondents that no Agreement came into being between the parties, especially an Arbitration Agreement.
14. It is contended by the learned counsel for the petitioner and not denied by the respondents, that all previous Agreements between the parties also had an Arbitration Agreement in identical terms. Even in the Agreement in question for the period 2018-2019, there was no disagreement on the clause containing the Arbitration Agreement between the parties. By the email dated 13.02.2018 the respondents had not suggested any changes in the said clause. O.M.P. (I) (COMM) 21/2019 Page 6
15. Section 7(4) of the Act reads as under: “7. Arbitration agreement.— xxxx (4) An arbitration agreement is in writing if it is contained in— (a) a document signed by the parties; (b) an exchange of letters, telex, telegrams or other means of telecommunication including communication through electronic means which provide a record of the agreement; or
(c) an exchange of statements of claim and defence in which the existence of the agreement is alleged by one party and not denied by the other.”
16. In Trimex International FZE Ltd., Dubai v. Vedanta Aluminium Ltd, India (2010)3 SCC 1, the Supreme Court, relying upon the exchange of emails between the parties, held as under: “57. Both in the counter-affidavit as well as at the time of arguments Mr C.A. Sundaram, learned Senior Counsel for the respondent has pointed out various differences between the version of the respondent and the petitioner. However, a close scrutiny of the same shows that there were only minor differences that would not affect the intention of the parties. It is essential that the intention of the parties be considered in order to conclude whether the parties were ad idem as far as adopting arbitration as a method of dispute resolution was concerned. In those circumstances, the stand of the respondent that in the absence of signed contract, the O.M.P. (I) (COMM) 21/2019 Page 7 arbitration clause cannot be relied upon is liable to be rejected.
58. Smita Conductors Ltd. v. Euro Alloys Ltd. was a case where a contract containing an arbitration clause was between the parties but no agreement was signed between the parties. The Bombay High Court held that the arbitration clause in the agreement was binding. Finally, this Court upholding the judgment of the Bombay High Court held that the arbitration clause in the agreement that was exchanged between the parties was binding.
59. In Shakti Bhog Foods Ltd. v. Kola Shipping Ltd., this Court held that from the provisions made under Section 7 of the Arbitration and Conciliation Act, 1996 that “the existence of an arbitration agreement can be inferred from a document signed by the parties, or an exchange of letters, telex, telegrams or other means of telecommunication, which provide a record of the agreement” (SCC p. 142, para 14).
60. It is clear that in the absence of signed agreement between the parties, it would be possible to infer from various documents duly approved and signed by the parties in the form of exchange of e-mails, letter, telex, telegrams and other means of telecommunication.”
17. Learned counsel for the respondents sought to distinguish this judgment by contending that in the said case terms of the agreement had been unequivocally accepted by both the parties which is not the case in the present petition. She submits that as far as the present O.M.P. (I) (COMM) 21/2019 Page 8 petition is concerned, the respondents had insisted that the petitioner sign the Agreement and return the same to the respondents. She submits that the petitioner never signed or unequivocally accepted the terms thereof, therefore, no Agreement can be deemed to have come into existence between the parties.
18. I am unable to agree with the said submission of the counsel for the respondents. As noted hereinabove, the petitioner not only accepted the same terms as were offered by the respondents, the parties have thereafter acted on the same with the respondents supplying the helicopters and the petitioner making the payment for the same.
19. I may also in this regard make reference to the judgment of the Supreme Court in Govind Rubber Ltd. v. Louis Dreyfus Commodities Asia (P) Ltd, (2015) 13 SCC 477, wherein the Supreme Court held as under:
20. In Unissi (India) Pvt. Ltd. v. Post Graduate Institute of Medical Education and Research, MANU/SC/4495/2008, the Supreme Court again relying upon the acceptance of the tender condition and supply of the machines, held that even in absence of the signed formal Agreement between the parties, the Arbitration Agreement would be deemed to have come into existence.
21. Learned counsel for the respondents has placed reliance on the judgment of the Supreme Court in PSA Mumbai Investments PTE Ltd. v. Board of Trustees of the Jawaharlal Nehru Port Trust and Anr., (2018) 10 SCC 525, to contend that the acceptance of the offer has to be absolute and unqualified and in the present case as the petitioner did not sign the Agreement and the respondents did not acknowledge the email dated 15.02.2018, no contract can be said to have come into existence. I am unable to agree with the submission made by the learned counsel for the respondents.
22. In PSA Mumbai Investments PTE Ltd. (supra), the Request for Proposal (RFP) itself made it clear that nothing contained therein will be construed to make RFP an Agreement between the parties. The Letter of Award further stated that a Special Purpose Vehicle solely for the purpose of implementing the project would be set up. In the facts of the case, it was found that there was no absolute and unqualified acceptance by the said Letter of Award, as two or three very important steps had to be undergone before there could be said to O.M.P. (I) (COMM) 21/2019 Page 11 be an Agreement which would be enforceable in law as a contract between the parties. It was in those circumstances that the Court held that the arbitration clause contained in the draft Concession Agreement would not apply.
23. Learned counsel for the respondents stated that the helicopters were supplied to the petitioner not on the basis of the Agreement but on basis of an oral understanding between the parties. In my opinion, the very fact that the respondents were insisting on the Agreement to be first finalized before supply of the helicopters; supplied helicopters on the receipt of email dated 15.02.2018 from the petitioner; and did not respond to the repeated correspondences thereafter addressed by the petitioner to the respondents, including those making reference to this Agreement, does not support the contention of the counsel for the respondents.
24. Similarly, reliance of the learned counsel for the respondents on the SMS message dated 17.02.2018 is also ill-founded. The said message does not denude from the already concluded Arbitration Agreement between the parties
25. In view of the above, I have no hesitation in holding that there is an Arbitration Agreement between the parties as contained in the draft Agreement circulated by the respondents first and duly accepted by the petitioner.
26. As far as the relief claimed by the petitioner, the disputes between the parties are in relation to the supply of helicopters in the O.M.P. (I) (COMM) 21/2019 Page 12 year 2018 which in the submission of the petitioner was to be made by February, 2018. The claim of the petitioner is one of damages. Admittedly, the arbitration proceedings are yet to be commenced between the parties. In view of the above, I do not deem this to be a fit case for grant of an order which would infact amount to an attachment before judgment. For such an order, the petitioner has to make a stronger than prima facie case and has to also prove that in case the Award is made in its favour, the respondents would not be in a position to honour the same. I do not find such a case to have been made out by the petitioner.
27. In view of the above, the petition is dismissed, however, any observation made in the present order shall not influence the Arbitrator while adjudicating the disputes. There shall be no order as to cost.
NAVIN CHAWLA, J MAY 28, 2019