1. This application under section 11 of the Arbitration and Conciliation Act, 1996 ('the Act, 1996') has been filed by the applicant seeking appointment of sole independent arbitrator to adjudicate the disputes between the applicant and nonapplicant - Hindustan Zinc Limited.
2. It is inter alia claimed in the application that the applicant is engaged in manufacture and supply of hydrated lime and limestone chips, pursuant to the contract with the nonapplicant, the applicant started supplying hydrated lime and limestone chips on regular basis. The applicant kept on supplying the hydrated lime to the non-applicant to the best of its ability. It is claimed that on account of certain developments, a dispute arose between the parties and the outstanding amount towards undisputed supply by the applicant due in non-applicant is Rs. 38,98,172/-. Where after, on account of risk purchase made by the non-applicant, the applicant was called upon to make payment of a huge sum.
3. A notice dated 17/7/2018 invoking the arbitration clause was given by the applicant to the non-applicant, however, vide reply dated 7/8/2018 the contents of the notice were denied and appointment of arbitrator was declined.
4. Based on the above submissions, appointment of an independent arbitrator is being sought.
5. A reply to the application has been filed by the non-applicant disputing the averments made in the application and denying any outstanding amount in the non-applicant. On the other hand it is claimed that the non-applicant has a claim against the applicant.
6. Learned counsel for the parties made submissions in consonance with the contents of the application and reply.
7. I have considered the submissions made by learned counsel for the parties and have perused the material available on record.
8. Clause 14 relating to arbitration & Clause 15 Governing Law and Jurisdiction of the General Terms and Conditions as attached to the Release Order against Contract reads as under:
Any dispute or difference whatsoever arising between the parties out of or relating to the interpretation, meaning, scope, operation or effect of this Agreement or the existence, validity, breach or anticipated breach thereof or determination and enforcement of respective rights, obligations and liabilities of the parties thereto shall be amicably settled by way of mediation. If the dispute is not conclusively settled within a period of twenty-one (21) days from the date of commencement of mediation or such further period as the parties shall agree in writing, the dispute shall be referred to and finally resolved by arbitration under Indian Arbitration and Conciliation Act, 1996. The arbitration shall be conducted as follows:
(i) The Arbitration shall be conducted by a forum of three arbitrators with one arbitrator nominated by each Party and the presiding arbitrator selected by the nominated arbitrators.
(ii) The language of the mediation and arbitration proceedings shall be English. The seat of the arbitration shall be Udaipur, India.
(iii) The award made in pursuance thereof shall be final and binding on the parties. 15. Governing Law and Jurisdiction.
This Agreement shall be governed by, construed and enforced in accordance with the laws of India.
The parties submit to the exclusive jurisdictions of the courts of Udaipur, India and any courts that may hear appeals from those courts in respect of any proceedings in connection with this Agreement."
9. The Hon'ble Supreme Court in Duro Felguera, S.A. v. Gangavaram Port Limited (2017) 9 SCC 729 in para 18, 47, 48 & 59 observed and laid down as under:-
"18. The language in Section 11(6) of the Act "the Chief Justice or any person or institution designated by him" has been substituted by "Supreme Court or as the case may be the High Court or any person or institution designated by such Court". Now, as per subsection (6A) of Section 11, the power of the Court has now been restricted only to see whether there exists an arbitration agreement. The amended provision in sub-section (7) of Section 11 provides that the order passed under Section 11(6) shall not be appealable and thus finality is attached to the order passed under this Section.
47. What is the effect of the change introduced by the Arbitration and Conciliation (Amendment) Act, 2015 (hereinafter referred to as "the 2015 Amendment") with particular reference to Section 11(6) and the newly added Section 11(6A) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as "the 1996 Act") is the crucial question arising for consideration in this case.
48. Section 11(6A) added by the 2015 Amendment, reads as follows:
"11(6A) The Supreme Court or, as the case may be, the High Court, while considering any application under subsection (4) or sub-section (5) or subsection (6), shall, notwithstanding any judgment, decree or order of any Court, confine to the examination of the existence of an arbitration agreement."
From a reading of Section 11(6A), 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. (supra) and Boghara Polyfab (supra). 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 (6A) ought to be respected."
10. From the above, it is apparent that post 2015 amendment in the Act, the Court while considering any application under Section 11 of the Act should and needs to look into the existence of an arbitration agreement, nothing more or nothing less and that the Court only needs to see if the agreement contains a clause, which provides for arbitration pertaining to the disputes, which have arisen between the parties to the agreement.
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br />11. In view of the above, as it is apparent that a dispute has arisen between the parties and there exists an arbitration agreement between the parties, the dispute between them, deserves to be referred for arbitration. 12. In view of the above discussion, the application is allowed. Justice Ramchandra Singh Jhala, former Judge of this Court, resident of A-28, Chitrakoot Nagar, Udaipur (Mobile No. 98291- 49514) is appointed as a sole arbitrator to adjudicate upon the dispute between the parties in terms of the arbitration agreement and as per the Manual of Procedure for Alternative Dispute Resolution, 2009, as amended up-to date. The above appointment is subject to necessary disclosure being made under Section 12 of the Act.