w w w . L a w y e r S e r v i c e s . i n



M/s. Haskoning B.V. Dutch Consulting Engineers & Architects rep. by its Power of Attorney holder Sunil Kumar v/s M/s. Kamarajar Port Ltd.


Company & Directors' Information:- KAMARAJAR PORT LIMITED [Active] CIN = U45203TN1999GOI043322

Company & Directors' Information:- ENGINEERS INDIA LIMITED [Active] CIN = L74899DL1965GOI004352

Company & Directors' Information:- M M ENGINEERS PRIVATE LIMITED [Active] CIN = U02919TZ1987PTC001936

Company & Directors' Information:- N L ENGINEERS PRIVATE LIMITED [Active] CIN = U27109PB1997PTC020362

Company & Directors' Information:- K. H. CONSULTING PRIVATE LIMITED [Active] CIN = U67120MH1994PTC082772

Company & Directors' Information:- S AND T ENGINEERS PRIVATE LIMITED [Active] CIN = U51103TZ2009PTC015456

Company & Directors' Information:- V A ENGINEERS PRIVATE LIMITED [Amalgamated] CIN = U29299MH1997PTC215888

Company & Directors' Information:- I & B ENGINEERS PRIVATE LIMITED [Active] CIN = U45309WB2008PTC124644

Company & Directors' Information:- AT AND T ENGINEERS PRIVATE LIMITED [Active] CIN = U45203DL2012PTC239940

Company & Directors' Information:- C C ENGINEERS PVT LTD [Active] CIN = U30009PN1991PTC063868

Company & Directors' Information:- M AND T ENGINEERS PRIVATE LIMITED [Active] CIN = U74899DL1989PTC036107

Company & Directors' Information:- J G ENGINEERS PVT LTD [Active] CIN = U45402WB1970PTC027713

Company & Directors' Information:- P E ENGINEERS PVT LTD [Active] CIN = U74210TG1981PTC003247

Company & Directors' Information:- M S ENGINEERS INDIA PRIVATE LIMITED [Strike Off] CIN = U45200MH2006PTC159314

Company & Directors' Information:- D K POWER ENGINEERS PRIVATE LIMITED [Active] CIN = U74899DL1988PTC033377

Company & Directors' Information:- C K ENGINEERS INDIA PRIVATE LIMITED [Active] CIN = U74200CH1997PTC020744

Company & Directors' Information:- A V ENGINEERS PRIVATE LIMITED [Active] CIN = U29306CH2002PTC024874

Company & Directors' Information:- J AND K ENGINEERS PVT LTD [Converted to LLP and Dissolved] CIN = U29259GJ1982PTC005625

Company & Directors' Information:- T & I ENGINEERS PRIVATE LIMITED [Active] CIN = U29252AS2000PTC006243

Company & Directors' Information:- B. K. ENGINEERS (INDIA) PRIVATE LIMITED [Active] CIN = U28112MH2011PTC214002

Company & Directors' Information:- K A ENGINEERS PRIVATE LIMITED [Active] CIN = U74999DL2003PTC119859

Company & Directors' Information:- K L R ENGINEERS PRIVATE LIMITED [Active] CIN = U74210TG1996PTC024040

Company & Directors' Information:- J B C ENGINEERS PRIVATE LIMITED. [Active] CIN = U31300DL2004PTC125469

Company & Directors' Information:- T R ENGINEERS PRIVATE LIMITED [Active] CIN = U29111DL2004PTC126852

Company & Directors' Information:- D C ENGINEERS PRIVATE LIMITED [Active] CIN = U74210MH1999PTC118382

Company & Directors' Information:- E C ENGINEERS PVT LTD [Active] CIN = U28920MH1981PTC024675

Company & Directors' Information:- K B ENGINEERS PVT LTD [Strike Off] CIN = U27202WB1987PTC041979

Company & Directors' Information:- N. C. R. ENGINEERS PRIVATE LIMITED [Active] CIN = U45400UP2008PTC034625

Company & Directors' Information:- V K G ENGINEERS PVT LTD [Strike Off] CIN = U45202PB2006PTC030194

Company & Directors' Information:- J C ENGINEERS PRIVATE LIMITED [Active] CIN = U29248HR1988PTC030208

Company & Directors' Information:- K C ENGINEERS LIMITED [Active] CIN = U74999HR2005PLC035602

Company & Directors' Information:- K C ENGINEERS PRIVATE LIMITED [Active] CIN = U74999HR2005PTC035602

Company & Directors' Information:- C & L ENGINEERS (INDIA) PVT. LTD. [Strike Off] CIN = U29190DL1998PTC096952

Company & Directors' Information:- G AND M ENGINEERS PVT. LTD. [Strike Off] CIN = U74210MH1986PTC041517

Company & Directors' Information:- ENGINEERS AND ARCHITECTS INDIA PVT LTD [Active] CIN = U74210WB1990PTC048382

Company & Directors' Information:- H V ENGINEERS PVT LTD [Active] CIN = U45202PB1978PTC003839

Company & Directors' Information:- I T ENGINEERS PRIVATE LIMITED [Active] CIN = U45201DL2005PTC136156

Company & Directors' Information:- E B P ENGINEERS PRIVATE LIMITED [Strike Off] CIN = U52392DL2003PTC118311

Company & Directors' Information:- S M R ENGINEERS PRIVATE LIMITED [Strike Off] CIN = U29199TZ2000PTC009464

Company & Directors' Information:- V B ENGINEERS PRIVATE LIMITED [Active] CIN = U25209MH2009PTC191163

Company & Directors' Information:- D V ENGINEERS PRIVATE LIMITED [Strike Off] CIN = U74899DL1994PTC061013

Company & Directors' Information:- E CONSULTING INDIA PRIVATE LIMITED [Strike Off] CIN = U72900KA2000PTC028060

Company & Directors' Information:- F L B ENGINEERS PRIVATE LIMITED [Active] CIN = U28932MH1985PTC035994

Company & Directors' Information:- S B R ENGINEER'S PRIVATE LIMITED [Strike Off] CIN = U45202WB2000PTC092506

Company & Directors' Information:- J. S. W. ENGINEERS PRIVATE LIMITED [Active] CIN = U29120PN2010PTC136515

Company & Directors' Information:- S 2 S CONSULTING PRIVATE LIMITED [Active] CIN = U74140KA2001PTC029034

Company & Directors' Information:- H M S ENGINEERS PRIVATE LIMITED [Strike Off] CIN = U29219CH1991PTC011585

Company & Directors' Information:- P M C ENGINEERS PVT LTD [Strike Off] CIN = U74210KL1981PTC003354

Company & Directors' Information:- S L V ENGINEERS PRIVATE LIMITED [Active] CIN = U72501TZ2000PTC009366

Company & Directors' Information:- B.V. ENGINEERS PRIVATE LIMITED [Active] CIN = U27109DL2000PTC107876

Company & Directors' Information:- P C ENGINEERS PRIVATE LIMITED [Active] CIN = U34300CH1985PTC006093

Company & Directors' Information:- R H ENGINEERS PVT LTD [Active] CIN = U74200CH1984PTC005944

Company & Directors' Information:- G S ENGINEERS PVT LTD [Active] CIN = U74210PB1994PTC014225

Company & Directors' Information:- H I ENGINEERS PVT LTD [Active] CIN = U74210WB1984PTC037097

Company & Directors' Information:- S A ENGINEERS LTD [Strike Off] CIN = U28932WB1977PLC031202

Company & Directors' Information:- ENGINEERS LTD [Strike Off] CIN = U29100WB1933PLC007579

Company & Directors' Information:- G B ENGINEERS PVT LTD [Strike Off] CIN = U74210WB1982PTC034958

Company & Directors' Information:- R. J. ENGINEERS PRIVATE LIMITED [Active] CIN = U29199TZ1990PTC002690

Company & Directors' Information:- AMP ENGINEERS PVT LTD [Strike Off] CIN = U21011UP1988PTC010091

Company & Directors' Information:- SUNIL & CO PVT LTD [Active] CIN = U32109WB1984PTC037810

Company & Directors' Information:- A R ENGINEERS PVT LTD [Strike Off] CIN = U45203OR1993PTC003413

Company & Directors' Information:- S P CONSULTING ENGINEERS PRIVATE LIMITED [Active] CIN = U74210MH2000PTC128827

Company & Directors' Information:- P & A ENGINEERS PRIVATE LIMITED [Active] CIN = U70101OR2011PTC014428

Company & Directors' Information:- M AND D (ENGINEERS) PRIVATE LIMITED [Active] CIN = U28932MH1975PTC018333

Company & Directors' Information:- A G ENGINEERS PRIVATE LIMITED [Active] CIN = U74899DL1986PTC024138

Company & Directors' Information:- Y A ENGINEERS PRIVATE LIMITED [Active] CIN = U74899DL2001PTC110304

Company & Directors' Information:- R. F. ENGINEERS PRIVATE LIMITED [Active] CIN = U32100DL2010PTC199732

Company & Directors' Information:- K J S ENGINEERS PRIVATE LIMITED [Strike Off] CIN = U74210DL1998PTC093851

Company & Directors' Information:- SUNIL KUMAR PVT LTD [Strike Off] CIN = U17111RJ1985PTC003429

Company & Directors' Information:- A P ENGINEERS PRIVATE LIMITED [Strike Off] CIN = U29269UP1991PTC013866

Company & Directors' Information:- S S ENGINEERS PVT LTD [Strike Off] CIN = U28931TN1987PTC015093

Company & Directors' Information:- A S ENGINEERS PVT LTD [Strike Off] CIN = U74999TG1988PTC008455

Company & Directors' Information:- N R S ENGINEERS PRIVATE LIMITED [Strike Off] CIN = U29269UP1992PTC014881

Company & Directors' Information:- K KUMAR ENGINEERS PRIVATE LIMITED [Active] CIN = U74899DL1979PTC009636

Company & Directors' Information:- H J ENGINEERS PRIVATE LTD [Active] CIN = U74899DL1987PTC027668

Company & Directors' Information:- T & A CONSULTING PRIVATE LIMITED [Active] CIN = U51909DL2006PTC156226

Company & Directors' Information:- J & A CONSULTING PRIVATE LIMITED [Active] CIN = U74140KA1984PTC006255

Company & Directors' Information:- POWER CONSULTING PRIVATE LIMITED [Strike Off] CIN = U74140TN2007PTC062311

Company & Directors' Information:- A R ENGINEERS PVT LTD [Not available for efiling] CIN = U71220UP1978PTC004701

Company & Directors' Information:- K K ENGINEERS INDIA PRIVATE LIMITED [Active] CIN = U74200CH1984PTC005826

Company & Directors' Information:- D H ENGINEERS PVT LTD [Strike Off] CIN = U51109WB1963PTC025758

Company & Directors' Information:- R B ENGINEERS PRIVATE LIMITED [Active] CIN = U24230MH2003PTC141901

Company & Directors' Information:- F S ENGINEERS PRIVATE LIMITED [Active] CIN = U74210TN1973PTC006482

Company & Directors' Information:- U. K. ENGINEERS PRIVATE LIMITED [Active] CIN = U31900PN2008PTC132332

Company & Directors' Information:- J B ENGINEERS PRIVATE LIMITED [Strike Off] CIN = U74900MH2012PTC226187

Company & Directors' Information:- S & E ENGINEERS PRIVATE LIMITED [Active] CIN = U74999PN2010PTC135666

Company & Directors' Information:- D B S ENGINEERS PRIVATE LIMITED [Active] CIN = U74210UP2010PTC084195

Company & Directors' Information:- G H ENGINEERS PRIVATE LIMITED [Strike Off] CIN = U28939DL2004PTC130703

Company & Directors' Information:- N R ENGINEERS PRIVATE LIMITED [Active] CIN = U29292DL2011PTC221986

Company & Directors' Information:- T F ARCHITECTS PRIVATE LIMITED [Active] CIN = U74210DL2007PTC163940

Company & Directors' Information:- D KUMAR CONSULTING ENGINEERS PRIVATE LIMITED [Active] CIN = U74899DL1971PTC005665

Company & Directors' Information:- K M ENGINEERS PRIVATE LIMITED [Strike Off] CIN = U45400DL2014PTC272465

Company & Directors' Information:- V & V CONSULTING ENGINEERS PRIVATE LIMITED [Strike Off] CIN = U74140DL2013PTC261328

Company & Directors' Information:- POWER CONSULTING ENGINEERS PRIVATE LIMITED [Active] CIN = U70200DL2013PTC251488

Company & Directors' Information:- O P CONSULTING PRIVATE LIMITED [Active] CIN = U74140KL2015PTC038338

Company & Directors' Information:- J N PORT PRIVATE LIMITED [Active] CIN = U45209GJ2013PTC073918

Company & Directors' Information:- AMP CONSULTING ENGINEERS PRIVATE LIMITED [Active] CIN = U40300MH2019PTC329319

Company & Directors' Information:- N K ENGINEERS PRIVATE LIMITED [Strike Off] CIN = U65921UP1954PTC002533

Company & Directors' Information:- H. R. ENGINEERS PVT LTD [Strike Off] CIN = U74999PB1973PTC003316

Company & Directors' Information:- ENGINEERS CORPORATION PVT LTD [Strike Off] CIN = U74300WB1946PTC022035

Company & Directors' Information:- I S C ENGINEERS PRIVATE LIMITED [Strike Off] CIN = U74140DL1983PTC017046

Company & Directors' Information:- POWER PORT PRIVATE LIMITED [Strike Off] CIN = U32109KA1990PTC011470

Company & Directors' Information:- THE ENGINEERS PRIVATE LIMITED [Strike Off] CIN = U99999KA1948PTC000551

Company & Directors' Information:- M. AND S. (ENGINEERS) LIMITED [Dissolved] CIN = U99999MH1952PLC008956

    O.P. No. 75 of 2019

    Decided On, 22 August 2019

    At, High Court of Judicature at Madras

    By, THE HONOURABLE MRS. JUSTICE PUSHPA SATHYANARAYANA

    For the Petitioner: Arjun Suresh, Advocate. For the Respondent: Manoj Menon for M/s.Menon, Karthik, Mukundan, Neelankandan, Advocates.



Judgment Text


(Prayer: Petition filed under Section 11(6) of the Arbitration and Conciliation Act, 1996, praying to appoint the Arbitral Tribunal in terms of Clause 6.05 of the Consultancy Agreement.)

1. This Original Petition is filed seeking appointment of an Arbitral Tribunal in terms of Clause 6.05 of the Consultancy Agreement to settle the dispute between the parties.

2. The petitioner company is engaged in the business of, inter alia, providing engineering and architectural consultancy services for projects relating to port constructions, having incorporated under the laws of Netherlands. It entered into a Consultancy Agreement dated 17.08.1994 (in short, “the Agreement”) with the Madras Port Trust for construction of Ennore Port, which is now renamed as Kamarajar Port/the respondent herein. Since disputes arose between the parties, the arbitration clause contained in the agreement was invoked. It is pertinent to mention here that the dispute with respect to the payment/reimbursement of tax was not covered under the arbitration proceedings. An award dated 11.03.2009 was passed, which was modified on 27.04.2009 favouring the petitioner, though some of its claims were rejected. Challenge was made by the respondent to the award in O.P.No.348 of 2013 in vain on 02.06.2014 and this Court directed the respondent to pay the petitioner NLG 3,369,832.48 (Euros 1,529,163.31) ; USD 161,429.56 and INR 2,76,48,974.32 along with interest at the rate of 6% p.a. on the foreign exchange component and 9% on the INR component.

3. The petitioner filed E.P.No.47 of 2015, wherein, the respondent agreed to pay the amounts directed to be paid in the aforesaid order of this Court dated 02.06.2014. Accordingly, the respondent filed a Memo of Calculation on 19.08.2015 stating that certain amounts would be deposited. After the disposal of the execution petition, the petitioner sought for furnishing TDS Certificate from the respondent, which was given only on 15.07.2016 and at that time only, the petitioner came to know that the respondent remitted only a sum of INR.1,24,44,359/-, which is 4.5% of the foreign exchange component of INR.21,75,05,004/- instead of depositing INR.2,44,07,134.40 and the balance tax liability is now INR.1,19,62,775/-. The petitioner requested the respondent to remit the balance of the tax liability amount. Since they failed to oblige, the petitioner remitted the said amount and sought for reimbursement along with interest as per Clause 4.01(g) of the Agreement. Even then the respondent failed to respond.

4. It is stated by the petitioner that in the aforesaid backdrop, it once again invoked clause 6.05 of the Agreement, which provides for arbitration, and sent notice dated 01.06.2018 nominating Hon'ble Mr.Justice N.V.Balasubramanian on their side and sought the respondent to nominate their Arbitrator, so that both the learned Arbitrators can appoint the third Arbitrator to constitute the Tribunal. The respondent through its counsel sent a reply notice dated 29.01.2018 refusing to come for arbitration stating that no arbitrable dispute exists. Hence, the present petition.

5. Resisting the prayer of the petitioner, the respondent filed a counter-affidavit dated 20.07.2019. It is stated by the respondent therein that the Hon'ble Arbitrators held that the Agreement was not extended after May 1999 and the petitioner cannot rely on Clause 4.01(g) of the same and thus, the petitioner cannot maintain this petition relying upon the said clause contained in the Agreement. Since the tax liability was not the subject matter of the arbitration proceedings, now the petitioner cannot subject it to another arbitration. It is claimed by the respondent that since it deposited a sum of INR.27,38,84,675/- on 25.08.2015 in full and final settlement of all the amounts payable to the petitioner under the award and the execution petition was closed recording full satisfaction of the Award, the petitioner cannot invoke Clause 6.05 of the Agreement. It is also stated that the respondent having not received any tax demand from any statutory authorities, the amount remitted by the petitioner on its own volition without notice to the respondent, cannot be sought to be recovered from the respondent. The respondent stated that since the Agreement itself expired in May 1999, there is no arbitrable dispute exist with the petitioner and they sent reply notice to that effect on 29.06.2018 and thus, the petitioner is not entitled to any relief and sought for dismissal of this petition.

6. Learned counsel for the petitioner contended that the respondent in the Memo of Calculation dated 19.08.2015 had agreed to deposit the entire amount of foreign exchange component without deducting taxes, i.e. INR.21,75,05,004/-, which is the amount equivalent to foreign currency component in terms of Clause 4.01(g)(1) of the Agreement. In other words, the tax liability with regard to the foreign currency component is that of the respondent and it has to deposit the same directly to the tax authorities and with regard to the INR component, the respondent deducted the tax at the rate of 4.5% in terms of Advance Tax Ruling passed in AAR No.291 of 1996 dated 11.11.1996 and thus, the amount agreed to be deposited by the respondent in toto is Rs.27,38,84,675/-. The learned counsel further contended that the respondent, who ought to have remitted a sum of INR.2,17,50,500.40, being 10% of INR.21,75,05,004/-, directly with the tax authorities in terms of Clause 4.01(g) of the Agreement, besides paying on INR.25,56,634/-, being 4.5% taxes deducted at sources totaling to INR.2,44,07,134.40, deposited only a sum of INR.1,24,44,359/- leaving the shortfall of tax liability of INR.1,19,62,775/-. Thus, he prayed for constitution of an Arbitral Tribunal to resolve the said tax dispute that arose between the parties in terms of Clause 6.05 of the Agreement.

7. Heard the learned counsel for the respondent Port elaborately on the above submissions and perused the materials available on record.

8. According to the parties, Clause 4.01(g)(1) is relevant for the purpose of this case and the same reads as follows : “Clause 4.01 (g)(1) :

The Client shall bear the cost of any taxes, duties, fees, levies and other imposition under the laws and regulations in effect in India in respect of ;

(1) payments made in foreign currency to the Consultant or the Personnel other than Indian nationals in connection with the carrying of the Services.”

8.1. Clause 5.01 is also reproduced hereinafter, for better appreciation of this petition :

“Clause 5.01 :

The Consultant shall pay all taxes, duties, fees, levies and other imposition by or under any authority in India in respect of all services, equipment, materials, goods, personal effects and other supplies etc. except those mentioned in clause 4.01(g).”

8.2. The findings of the Hon'ble Tribunal with regard to the aforesaid clause 4.01(g) read as follows :

"88. Agreement No.58 of 1994 was for the period ending with May, 1999. We have already held that the NOD did not crystallise into a valid agreement and hence the penultimate clause therein, viz., that the Agreement 58 of 94 shall be extended without any discontinuity in the provision of services by the Consultants and payment thereof by the Chennai Port Trust has no legal effect. The NLG invoices in respect of which the claimant seeks reimbursement of Service Tax are for the period from January, 2000 to March, 2001 i.e., for a period after the currency of the Agreement No.58 of 94 and during which period consultancy services had been brought under the Service Tax net. Hence, the claimant cannot successfully rely on the aforesaid Clause 4.01(g)(1) of the Consultancy Agreement to claim reimbursement of the Service Tax paid in Foreign Currency. Inasmuch as Agreement No.58 of 94 ended with May, 1999, Clause 5.01 cannot also be availed of by Chennai Port Trust in answer to the claimant's claim for reimbursement of Service Tax paid in NLG. The claimant having paid the Service Tax in NLG during the period in question the payment of which was the ultimate responsibility of Chennai Port Trust and the claimant having paid it without intending to do so gratuitously the benefit of which was enjoyed by Chennai Port Trust, the Chennai Port Trust is under a legal obligation to reimburse it to the claimant. There cannot be undue enrichment of one party at the cost of another. Considering these, we hold that the claimant is entitled to recover from the respondents the amount of Service Tax paid by it in NLG and covered by part of the NLG invoice. Ex.A32 and parts of similar NLG invoices A33, A34, A35, A36, A37, A38, A39, A40, A41, A42, A43, A44, A45 and A46."

9. As the award has specifically mentioned that the Chennai Port Trust is under a legal obligation to reimburse the service tax paid by the petitioner, the petitioner is entitled for recovery of the same from the respondent. As it is only after the execution petition was disposed of, the respondent had furnished the particulars and the petitioner had made the demand. Admittedly, the petitioner had remitted the balance tax (i.e. 5.5% of the foreign component received) on the foreign currency component received by it with the tax authorities. Therefore, the petitioner sought for the reimbursement of the same with interest @ 18% p.a. from the date of remittance by the petitioner till the date of reimbursement as per Clause 4.01 (g) of the Consultancy Agreement, which is also affirmed in paragraph 88 of the award.

10. The learned counsel for the petitioner placed his reliance on the judgment of the Hon'ble Supreme Court reported in 2017 (9) SCC 729 [Duro Felguera.S.A vs. Gangavaram Port Limited], wherein, in paragraphs 48 and 59, it has been held as follows:-

"48. Section 11(6-A) added by the 2015 Amendment, reads as follows:

“11. (6-A) 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.” (emphasis supplied) From a reading of Section 11(6-A), the intention of the legislature is crystal clear i.e. the court should and need only look into one aspect—the existence of an arbitration agreement. What are the factors for deciding as to whether there is an arbitration agreement is the next question. The resolution to that is simple—it needs to be seen if the agreement contains a clause which provides for arbitration pertaining to the disputes which have arisen between the parties to the agreement.

59. The scope of the power under Section 11(6) of the 1996 Act was considerably wide in view of the decisions in SBP and Co. [SBP and Co. v. Patel Engg. Ltd., (2005) 8 SCC 618] and Boghara Polyfab [National Insurance Co. Ltd. v. Boghara Polyfab (P) Ltd., (2009) 1 SCC 267 : (2009) 1 SCC (Civ) 117]. This position continued till the amendment brought about in 2015. After the amendment, all that the courts need to see is whether an arbitration agreement exists—nothing more, nothing less. The legislative policy and purpose is essentially to minimise the Court's intervention at the stage of appointing the arbitrator and this intention as incorporated in Section 11(6-A) ought to be respected.”

In the above case, the Hon'ble Supreme Court has held that after the amendment of the year 2015, while appointing an Arbitrator, all that the Court has to see is whether the arbitration agreement exists nothing more or nothing less. The Court's intervention at the stage of appointing the arbitrator should be minimised.

11. However, the learned counsel appearing for the respondent has relied upon the judgment of the Hon'ble Apex Court in M/s.S.B.P & Co., -vs- M/s. Patel Engineering Ltd and Another, (2005) 8 SCC 618, to urge the Court to look into question that if the claim is a dead one or is barred, as after the Amendment Act, 2015 that inserted Section 11(6A) the scope of the Court under Section 11 of the Arbitration and Conciliation Act is restricted only to examine the existence of the arbitration agreement. Though the respondent attempted to convince the Court that the issue of reimbursement of tax had already been settled by the Arbitral Award dated 10.03.2009, from the perusal of paragraph 88 of the award pertaining to NLG invoices for the period from January 2000 to March 2001, the issue cannot be said to have been covered.

12. It was further contended by the learned counsel for the respondent that there was no arbitrable dispute exists between the petitioner and the respondent, as the Consultancy Agreement itself had expired in May 1999 and therefore, the petitioner is estopped from invoking the Arbitration Clause contained therein. In this regard, reliance was placed upon the judgment of the Hon'ble Supreme Court in CENTROTRADE MINERALS AND METAL INC., -VSHINDUSTAN COPPER LIMITED [2017 (2) SCC 228]. Paragraph Nos.32, 33 and 34 of the said judgment are extracted hereunder:

"32. The learned counsel for HCL contended that since an award of the first instance is final and binding on the parties under Section 35 of the A&C Act there cannot be an “appeal” provision in the agreement between the contracting parties. The “final and binding” nature of an arbitral award (postulated by Section 35 of the A&C Act) has come up for consideration in this Court. This Court has taken the view that an award is not a waste paper only because it has not been enforced. The existence of an award has some legal consequences as well. In Satish Kumar v. Surinder Kumar [Satish Kumar v. Surinder Kumar, (1969) 2 SCR 244 : AIR 1970 SC 833] Para 7 of Schedule I of the Arbitration Act, 1940 [ Para 7, Schedule I: “The award shall be final and binding on the parties and persons claiming under them respectively.”] was considered. This is almost in pari materia with Section 35 of the A&C Act. The question before this Court was: whether an award given under the Arbitration Act, 1940 on a private reference requires registration under Section 17(1)(b) of the Registration Act, 1908 if the award effects partition of immovable property exceeding the value of Rs 100?

33. In that case, this Court relied upon the following passage from Uttam Singh Duggal & Co. v. Union of India [Uttam Singh Duggal & Co. v. Union of India, Civil Appeal No. 162 of 1962, decided on 11- 10-1962 (SC) (Unreported decision)] which held that once an award is made on a subject-matter, no action can be started on the original claim which had been the subject-matter of reference. This Court was not concerned with any agreement between parties to subject the correctness of the award to further scrutiny through an “appeal” procedure. It was held: (Satish Kumar case [Satish Kumarv. Surinder Kumar, (1969) 2 SCR 244 : AIR 1970 SC 833] , AIR p. 836, para 8)

“8. … ‘The true legal position in regard to the effect of an award is not in dispute. It is well settled that as a general rule, all claims which are the subject-matter of a reference to arbitration merge in the award which is pronounced in the proceedings before the arbitrator and that after an award has been pronounced, the rights and liabilities of the parties in respect of the said claims can be determined only on the basis of the said award. After an award is pronounced, no action can be started on the original claim which had been the subject-matter of the reference. As has been observed by Mookerjee, J. in Bhajahari Saha Banikya v. Behary Lal Basak [Bhajahari Saha Banikya v. Behary Lal Basak, ILR (1906) 33 Cal 881] : (ILR p. 888)

“…The award is in fact a final adjudication of a court of the parties' own choice, and until impeached upon sufficient grounds in an appropriate proceeding, an award, which is on the face of it regular, is conclusive upon the merits of the controversy submitted, unless possibly the parties have intended that the award shall not be final and conclusive. … in reality, [an award] possesses all the elements of vitality, even though it has not been formally enforced, and it may be relied upon in a litigation between the parties relating to the same subject-matter….”

This conclusion, according to the learned Judge, is based upon the elementary principle that, as between the parties and their privies, an award is entitled to that respect which is due to the judgment of a court of last resort. Therefore, if the award which has been pronounced between the parties has, in fact, or can, in law, be deemed to have dealt with the present dispute, the second reference would be incompetent. This position also has not been and cannot be seriously disputed.”

(emphasis supplied)

34. This Court held that the above decision stated the correct position in law and was binding. This Court further adverted to Para 7 of Schedule I to the Arbitration Act, 1940 to state: (Satish Kumar case [Satish Kumar v. Surinder Kumar, (1969) 2 SCR 244 : AIR 1970 SC 833] , AIR p. 837, para 13)

“13. … We may mention that no comment was made in these cases on the provisions of Para 7 of Schedule I to the Act. This para provides:

‘7. The award shall be final and binding on the parties and persons claiming under them respectively.’ If the award is final and binding on the parties it can hardly be said that it is a waste paper unless it is made a rule of the Court.”

13. Once an award is made on a subject mater, no action can be started on the original claim which has been the subject matter of reference. It is relevant to refer the paragraphs 38 and 40 of the judgment reported in (2005) 8 SCC 618, which read as follows:-

38. It is true that finality under Section 11(7) of the Act is attached only to a decision of the Chief Justice on a matter entrusted by sub-section (4) or sub-section (5) or sub-section (6) of that section. Sub-section (4) deals with the existence of an appointment procedure and the failure of a party to appoint the arbitrator within 30 days from the receipt of a request to do so from the other party or when the two appointed arbitrators fail to agree on the presiding arbitrator within 30 days of their appointment. Sub-section (5) deals with the parties failing to agree in nominating a sole arbitrator within 30 days of the request in that behalf made by one of the parties to the arbitration agreement and sub-section (6) deals with the Chief Justice appointing an arbitrator or an Arbitral Tribunal when the party or the two arbitrators or a person including an institution entrusted with the function, fails to perform the same. The finality, at first blush, could be said to be only on the decision on these matters. But the basic requirement for exercising his power under Section 11(6), is the existence of an arbitration agreement in terms of Section 7 of the Act and the applicant before the Chief Justice being shown to be a party to such an agreement. It would also include the question of the existence of jurisdiction in him to entertain the request and an enquiry whether at least a part of the cause of action has arisen within the State concerned. Therefore, a decision on jurisdiction and on the existence of the arbitration agreement and of the person making the request being a party to that agreement and the subsistence of an arbitrable dispute require to be decided and the decision on these aspects is a prelude to the Chief Justice considering whether the requirements of sub-section (4), sub-section (5) or sub-section (6) of Section 11 are satisfied when approached with the request for appointment of an arbitrator. It is difficult to understand the finality referred to in Section 11(7) as excluding the decision on his competence and the locus standi of the party which seeks to invoke his jurisdiction to appoint an arbitrator. Viewed from that angle, the decision on all these aspects rendered by the Chief Justice would attain finality and it is obvious that the decision on these aspects could be taken only after notice to the parties and after hearing them.

40. An aspect that requires to be considered at this stage is the question whether the Chief Justice of the High Court or the Chief Justice of India can designate a non-judicial body or authority to exercise the power under Section 11(6) of the Act. We have already held that, obviously, the legislature did not want to confer the power on the Court as defined in the Act, namely, the District Court, and wanted to confer the power on the Chief Justices of the High Courts and on the Chief Justice of India. Taking note of Section 5 of the Act and the finality attached by Section 11(7) of the Act to his order and the conclusion we have arrived at that the adjudication is judicial in nature, it is obvious that no person other than a Judge and no non-judicial body can be designated for entertaining an application for appointing an arbitrator under Section 11(6) of the Act or for appointing an arbitrator. In our dispensation, judicial powers are to be exercised by the judicial authorities and not by non-judicial authorities. This scheme cannot be taken to have been given the go-by by the provisions in the Act in the light of what we have discussed earlier. Therefore, what the Chief Justice can do under Section 11(6) of the Act is to seek the help of a non-judicial body to point out a suitable person as an arbitrator in the context of Section 11(8) of the Act and on getting the necessary information, if it is acceptable, to name that person as the arbitrator or the set of persons as the Arbitral Tribunal.”

14. In the light of the above, while deciding the petition under Section 11 (6) of the Arbitration and Conciliation Act, 1996, the Court cannot decide as to whether a live claim made is one which comes within the purview of the arbitration clause. It will be appropriate to leave that question to be decided by the Arbitral Tribunal on taking evidence, along with the merits of the claims involved in the Arbitration. This Court is only called upon to decide whether the petitioner has satisfied the conditions for appointing an Arbitrator under Section 11(6) of the Act.

15. Even presuming that, as contended by the learned counsel for the respondent, the agreement expired as early as in May 1999, the Arbitration Clause would survive even when the agreement is terminated. In 2009 (10) SCC 103 [The Branch Manager, MAGMA Leasing and Finance Ltd., -vs- Potluri Madhavilata], the Hon'ble Supreme Court has addressed the question whether the Arbitration Agreement survives the termination of the main contract, wherein, it has been held that an Arbitration Clause will survive even if the contract containing the clause comes

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to an end or has been terminated. The doctrine of severability of an Arbitration clause has been statutorily recognised in the Country. Section 16(1) of the Act makes it clear that while considering any objection with respect to the existence or validity of the arbitration agreement, an arbitration clause, which forms part of the contract, must be treated as an agreement independent of the other terms of the contract. Further, a decision that the contract is null and void does not result, by virtue of the law itself, in invalidity of the arbitration clause. 16. Learned counsel for the petitioner also placed reliance on 2018 SCC Online SC 381 [IBI Consultancy India Private Limited - vs- DSC Limited], wherein, in paragraph 7, it has been held as follows: "7. The first and the foremost thing is the existence of an arbitration agreement between the parties to the petition under Section 11 of the Act and the existence of dispute(s) to be referred to Arbitrator is condition precedent for appointing an Arbitrator under Section 11 of the Act. It is also a well settled law that while deciding the question of appointment of Arbitrator, court has not to touch the merits of the case as it may cause prejudice to the case of the parties. The scope under Section 11(6) read with Section 11(9) is very limited to the extent of appointment of Arbitrator. This Court has to see whether there exists an Arbitration Agreement between the parties and if the answer is affirmative then whether the petitioner has made out a case for the appointment of Arbitrator." 17. In the light of the above discussions and also considering the notice dated 01.06.2018 nominating Hon'ble Mr.Justice N.V.Balasubramanian, a retired Judge of this Court as the petitioner's nominee Arbitrator and calling upon the respondent to nominate their Arbitrator and also the response given by the respondent dated 29.06.2018, the respondent is directed to nominate their choice of Arbitrator within a period of 30 days from the date of receipt of a copy of this order. The learned Arbitrators so appointed shall appoint the Presiding Arbitrator within a period of 30 days from the date of acceptance of the respondent's nominee Arbitrator. 18. The Arbitral Tribunal may, after issuing notice to the parties and upon hearing them, pass an award as expeditiously as possible, preferably within a period of six months from the date of receipt of the order. 19. The Original Petition is ordered accordingly. The parties shall bear their own costs.
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