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Suzlon Global Services Ltd., Rep. by its Authorized Signatory, Chitbabu Sundareswaran, Ahmedabad v/s Sangeeth Textiles (P) Ltd, Rep. by its Managing Director, E.R. Elango, Coimbatore

    Arb O.P(Com. Div.)Nos. 312 to 314 of 2022 & Arb. Appln. Nos. 46 & 47 of 2022 & O. A. Nos. 50 to 52 of 2022

    Decided On, 22 July 2022

    At, High Court of Judicature at Madras

    By, THE HONOURABLE MR. JUSTICE M. SUNDAR

    For the Petitioner: Abhinav Parthasarathy, Advocate. For the Respondent: R. Roshini, Advocate.



Judgment Text

(Prayer: Arbitration Original Petition Nos.312 to 314 of 2022 filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 to appoint a sole Arbitrator to adjudicate the differences and disputes that have arisen between the parties in terms of the Operation & Maintenance Agreements dated 31.03.2016, 15.06.2013 and 01.04.2014 respectively.)

1. This common order will now dispose of the captioned three 'Arbitration Original Petitions' [hereinafter 'Arb OPs' for the sake of convenience and clarity], captioned two 'Arbitration Applications' [hereinafter 'Arb Applns' for the sake of convenience and clarity] and captioned three Original Applications [hereinafter 'OAs' for the sake of convenience and clarity].

2. There are two parties in the captioned matters. Both parties are Companies incorporated in India. One is a public limited company and other is a private limited company but it is not necessary to dilate on this aspect of the matter. Suffice to say that the two parties are 'Suzlon Global Services Ltd.,' [hereinafter 'contractor' for the sake of convenience and clarity] and 'Sangeeth Textiles (P) Ltd.,' [hereinafter 'employer' for the sake of convenience and clarity].

3. Mr.Abhinav Parthasarathy, learned counsel on record for contractor and Ms.R.Roshini, learned counsel on record for employer are before this Court.

4. Captioned three Arb OPs have been presented in this Court by the contractor under Section 11 of 'The Arbitration and Conciliation Act, 1996 (Act No.26 of 1996)' [hereinafter referred to as 'A and C Act' for the sake of convenience, clarity and brevity] with prayers for appointment of Arbitrator. Captioned OAs namely, O.A.Nos.50 to 52 of 2022 have also been taken out by contractor albeit under Section 9 of A and C Act with various interim prayers. However, Arb Applns namely, Arb Appln Nos.46 and 47 have been taken out by employer under Section 9 of A and C Act with different interim prayers.

5. Both the aforementioned learned counsel, on instructions, submit that a sole Arbitrator (Arbitrator of this Court's choice) can be appointed. To be noted, consensus begins and ends here. There is no other consent or concession by either side and all the questions are left open.

6. Aforementioned limited consent/consensus has now made the task of disposal of the captioned matters fairly simple.

7. Suffice to say that there are three agreements between employer and contractor being agreements dated 31.03.2016, 15.06.2013 and 01.04.2014. [hereinafter collectively 'primary contracts' in plural and 'I primary contract', 'II primary contract' and 'III primary contract' respectively wherever, there is a need to refer to contract individually i.e., independent of one another].

8. The arbitration clause in I primary contract is clause 14 captioned 'DISPUTE RESOLUTION'. This clause has to be read with clause 15 captioned 'Jurisdiction and Governing Law'. A scanned reproduction of these clauses 14 and 15 in I primary contract is as follows:

“IMAGE”

9. The arbitration clauses in II and III primary contracts is also clause 14 captioned 'Dispute Resolution' but there is a difference regarding seat / venue. The arbitration clause in II and III primary contract have to be read along with clause 15 thereat captioned 'Jurisdiction and Governing Law'. A scanned reproduction of these clauses 14 and 15 in II and III primary contract are as follows:

“IMAGE”

10. Aforementioned clauses serve as arbitration agreements i.e., 'Three Arbitration Agreements' between employer and contractor being arbitration agreements within the meaning of Section 2(1)(b) read with Section 7 of A and C Act is the common say of both learned counsel. As regards arbitration agreement qua I primacy contract, both learned counsel, on instructions, submit that the parties have agreed that Seat / Venue shall be Chennai and not Pune. In this regard, a letter dated 13.01.2022 qua I primary contract from employer forming part of typed set of papers was referred to. A scanned reproduction of this letter is as follows:

“IMAGE”

11. Adverting to the aforementioned letter, learned counsel for contractor on instructions submits that contractor also agrees that Seat / Venue qua I primary contract also shall be Chennai. This submission is recorded and this Court proceeds to appoint a sole Arbitrator for three contracts on this basis.

12. As regards arbitrable disputes, suffice to say that employer issued a notice dated 06.09.2021 saying that they would be terminating primary contracts by taking recourse to clause 9 of A and C Act. This was resisted by contractor by saying that it is only a route to evade the payments for one year period from January 2021 to January 2022. On this basis, contractor issued a notice dated 11.01.2022 (trigger notice) invoking arbitration agreement, suggesting a name as Arbitrator and calling upon employer to consent for the same. For this trigger notice, employer replied vide communication dated 13.01.2022 refusing to give consent for the name suggested. This has necessitated the presentation of captioned three Arb OPs is the say of learned contractor's counsel.

13. Before appointing a arbitrator owing to consensus alluded to supra, it is necessary to deal with the aforementioned five applications under Section 9 of A and C Act. As already alluded to supra, three Section 9 applications have been taken out by contractor and two Section 9 applications have been taken out by the employer. Both learned counsel request that their respective Section 9 applications may please be referred to arbitration for settlement one way or the other. This request is acceded to. Applicants in the captioned five Section 9 applications can present copies of their respective Section 9 applications before 'Arbitral Tribunal' [hereinafter 'AT' for the sake of convenience and clarity] to be appointed / constituted (infra elsewhere in this order) and this shall be treated as reference of the parties to arbitration for settlement. Both learned counsel point out that arbitration is one of the modes of settlement of dispute adumbrated under Section 89(1) of the 'Code of Civil Procedure, 1908 (Central Act V of 1908)' [hereinafter 'CPC' for the sake of brevity].

14. Ms.R.Roshini, learned counsel for employer draws the attention of this Court to Section 69-A of 'The Tamil Nadu Court Fees and Suits Valuation Act, 1955 (Tamil Nadu Act XIV of 1955)' [hereinafter 'TN Court Fees Act' for the sake of convenience and clarity] and submits that once there is a reference to arbitration for settlement, refund of Court fee can be ordered without awaiting settlement of disputes. To be noted, Section 69-A of TN Court Fees Act reads as follows:

'Section 69-A. Refund on Settlement of disputes under Section 89 of Code of Civil Procedure:

Where the Court refers the parties to the suit to any of the modes of settlement of dispute referred to in Section 89 of the Code of Civil Procedure, 1908 (Central Act V of 1908), the fee paid shall be refunded upon such reference. Such refund need not await for settlement of the dispute.'

15. Section 89 of CPC reads as follows:

'89. Settlement of disputes outside the Court.-

(1) Where it appears to the court that there exist elements of a settlement which may be acceptable to the parties, the court shall formulate the terms of settlement and give them to the parties for their observations and after receiving the observation of the parties, the court may reformulate the terms of a possible settlement and refer the same for—

(a) arbitration;

(b) conciliation

(c) judicial settlement including settlement through Lok Adalat; or

(d) mediation.

(2) Where a dispute has been referred—

(a) for arbitration or conciliation, the provisions of the Arbitration and Conciliation Act, 1996 (26 of 1996) shall apply as if the proceedings for arbitration or conciliation were referred for settlement under the provisions of that Act.

(b) to Lok Adalat, the court shall refer the same to the Lok Adalat in accordance with the provisions of sub-section (1) of section 20 of the Legal Services Authority Act, 1987 (39 of 1987) and all other provisions of that Act shall apply in respect of the dispute so referred to the Lok Adalat;

(c) for judicial settlement, the court shall refer the same to a suitable institution or person and such institution or person shall be deemed to be a Lok Adalat and all the provisions of the Legal Services Authority Act, 1987 (39 of 1987) shall apply as if the dispute were referred to a Lok Adalat under the provisions of that Act;

(d) for mediation, the court shall effect a compromise between the parties and shall follow such procedure as may be prescribed.'

16. Learned counsel also referred to a judgment of Hon'ble Supreme Court in M.C.Subramaniam case law reported in (2021) SCC Online SC 109 [High Court of Judicature at Madras, represented by its Registrar General Vs. M.C.Subramaniam and others] and submitted that even in cases where there is out of Court settlement, a party will be entitled to refund and learned counsel drew the attention of this Court to a portion of this case law (paragraph No.15 onwards) and submitted that refund of Court fee in the captioned five Section 9 applications may please be ordered.

17. In the light of the language in which Section 89 of CPC and Section 69-A of TN Court Fees Act are couched and in the light of ratio laid down by Hon'ble Supreme Court in M.C.Subramaniam case law, this Court accedes to the request for refund of Court fee in the captioned five Section 9 applications namely, Arb Appln.Nos.46 and 47 of 2022 and O.A.Nos.50 to 52 of 2022 to the respective applicant's counsel. Refund shall be by following the usual refund procedure and making standard / permissible deductions (if any) and refund shall be by way of a instrument drawn in favour of the respective applicant-Companies. Registry to process the refund and do the needful as expeditiously as the business of Registry would permit and in any event, this exercise shall be completed within six weeks from today i.e., on or before 02.09.2022 subject of course to the respective counsel complying with all the requirements qua refund procedure.

18. In the light of the narrative thus far, it is open to the employer as well as contractor to present copies of captioned Section 9 applications before ATs (to be appointed / constituted infra) with prayer to treat the same as applications under Section 17 of A and C Act. If such a course is adopted by the parties, though obvious, it is made clear for the purpose of clarity and specificity that ATs shall deal with the applications under Section 17 of A and C Act on their own merits in accordance with law including exploring the possibility of settlement by resorting to Section 30 of A and C Act as it is a reference for settlement under Section 89 of CPC.

19. In the light of the narrative thus far, Hon'ble Mr.Justice N.Kirubakaran (Retd), a former Hon'ble Judge, Madras High Court, with address for service at No.36, 2nd Cross Street, Rayala Nagar, Ramapuram, Chennai-600 089, Mobile: 94450 25454 (email: justice.n.k

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irubakaran@gmail.com) is appointed as sole Arbitrator. Hon'ble sole Arbitrator will constitute three ATs in Arb.OP.(Com.Div.)Nos.312, 313 and 314 of 2022 qua primary contract i.e., Agreements dated 31.03.2016, 15.06.2013 and 01.04.2014 respectively. Whether the AT will take up the matters together or deal with the same in any other manner is obviously subject to the discretion of Hon'ble AT and plea of learned counsel concerned. Hon'ble Arbitrator who will now constitute three ATs is requested to enter upon reference, qua primary contracts i.e., Agreements dated 31.03.2016, 15.06.2013 and 01.04.2014, adjudicate upon arbitrable disputes that have arisen between the parties and render Arbitral Awards by holding sittings in the 'Madras High Court Arbitration Centre under the aegis of this Court' (MHCAC) as per Madras High Court Arbitration Proceedings Rules 2017 and fee of Hon'ble sole Arbitrator shall be in accordance with the Madras High Court Arbitration Centre (MHCAC) (Administrative Cost and Arbitrator's Fees) Rules 2017. 20. Captioned Arb OP is disposed of in the aforesaid manner. Captioned five applications are closed in the aforesaid manner i.e., by way of reference to arbitration for settlement. There shall be no order as to costs.
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