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Westart Communications India Private Limited, represented by its Authorised Signatory, Chennai v/s The Greater Chennai Corporation, represented by its Commissioner, Chennai & Others

    Arb. O.P (Com. Div) No. 326 of 2022

    Decided On, 22 July 2022

    At, High Court of Judicature at Madras

    By, THE HONOURABLE MR. JUSTICE M.SUNDAR

    For the Petitioner: K. Doraisami, Senior Counsel, Kandhan Duraisami, Advocate. For the Respondents: M. Dhanisha, Karthikaa Ashok, Standing Counsel.



Judgment Text

(Prayer: Petitioner filed under Section 11(6)(a) of the Arbitration and Conciliation Act, 1996 to appoint an Arbitrator to adjudicate the disputes between the petitioner and the respondent Corporation in terms of the Concession Agreement dated 03.01.2020 with reference to (1) the proposal of the Greater Chennai Corporation for suspension of Demurrage clauses incorporated in Articles 16.2.1 and 16.2.2 of the Concession Agreement dated 03.01.2020; (2) non-supply of Construction and Demolition (C&D) waste from Zones 1, 2, 3 and 7 to the Processing Facility at Kodungaiyur established and operated by the petitioner; (3) supply of Minimum Guaranteed C&D waste to the Processing Facility at Kodungaiyur established and operated by the petitioner as contemplated in Schedule 3 of the Concession Agreement dated 03.01.2020; (4) issuance of COD (Commercial Operations Date) Certificate; (5) to settle the monthly invoices raised by the Petitioner for the months from December 2021 onwards; (6) payment of interest in terms of Article 28.5 of the Concession Agreement for the Delayed Payment of the Invoices raised by the petitioner; and (7) any other disputes in the contract between the petitioner and the Greater Chennai Corporation arising out of the Concession Agreement No.A7/3155/2019 dated 03.01.2020 and to pay costs.)

1. This order will now dispose of captioned 'Arbitration Original Petition' ['Arb.OP' for the sake of brevity].

2. This order has to be read in conjunction with and in continuation of earlier proceedings made by this Court in the previous listing on 20.07.2022, which reads as follows:

'Captioned 'Arbitration Original Petition' [hereinafter 'Arb OP' for the sake of convenience and clarity] has been presented in this Court on 04.07.2022 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 a prayer for appointment of an Arbitrator qua 'Concession Agreement dated 03.01.2020' [hereinafter 'primary contract' for the sake of convenience and clarity]. To be noted, this concession agreement is inter alia regarding establishment of processing facility qua construction and demolition waste generated from Zones 1 to 8 at Kodungaiyur Dump site of Chennai Corporation.

2. Mr.K.Doraisami, learned Senior counsel instructed by counsel on record for the petitioner submits that clause 27.3 of primary contract is the arbitration clause and therefore, the same serves as arbitration agreement between the parties i.e., 'Arbitration Agreement' within the meaning of Section 2(1)(b) read with Section 7 of A and C Act.

3. When the primary contract was operated, arbitrable disputes arose between the parties inter alia touching upon (a) Suspension of Demurrage clause (b) Non-supply of construction and demolition waste (c) Non-issuance of commercial operation dates (d) pending invoices raised by the petitioner. It is not necessary to give an exhaustive list of arbitrable disputes as this is a Section 11 legal drill that too in the Admission Board. Suffice to say that learned Senior counsel drew the attention of this Court to a notice dated 11.05.2022 and submitted that this is the notice invoking arbitration agreement between the parties owing to eruption of inter alia the aforementioned arbitrable disputes when the primary contract was worked / operated as already alluded to supra. This trigger notice i.e., notice invoking arbitration clause has been duly received by the respondent Corporation on 12.05.2022 is learned Senior counsel's further say, on instructions.

4. There has been no reply to the aforementioned trigger notice necessitating the presentation of the captioned Arb OP in this Court on 04.07.2022 is the further submission of the learned Senior counsel.

5. Prima facie case for issue of notice has been made out.

6. Issue notice.

7. Ms.M.Dhanisha, learned counsel representing Ms.Karthikaa Ashok learned standing counsel for Chennai Corporation with address for service at No.160, Additional Law Chambers, High Court, Chennai- 600 104, accepts notice on behalf of all the respondents [collectively Chennai Corporation for the sake of convenience and clarity] and requests for a short accommodation to get instructions regarding appointment of Arbitrator and revert to this Court.

8. Registry to show the name of learned standing counsel for Chennai Corporation in the next listing.

9. List day-after-tomorrow in the Admission Board. List on 22.07.2022.'

3. Aforementioned 20.07.2022 proceedings shall be read as an integral part and parcel of this order. This means that the abbreviations, short forms and short references used in the aforementioned proceedings dated 20.07.2022 will continue to be used in the instant order also for the sake of convenience and clarity.

4. Ms.M.Dhanisha, learned counsel representing Ms.Karthikaa Ashok, learned Standing Counsel for Chennai Corporation who has accepted notice on behalf of all the respondents is before this Court.

5. Adverting to the aforementioned earlier proceedings made on 20.07.2022, learned counsel for Chennai Corporation submits that Chennai Corporation not responding to trigger notice dated 11.05.2022 cannot be put against the Chennai Corporation. However, learned counsel, on instructions submits that Chennai Corporation is not filing a counter affidavit and there is no disputation about the existence of Clause 27.3 of primary contract which serves as arbitration agreement between the parties.

6. As the respondents have made it clear that they are not filing a counter affidavit and are not disputing the existence of arbitration agreement between the parties, this Court deems it appropriate to appoint a sole Arbitrator as the only point contended by the respondents is, not responding /replying to the trigger notice dated 11.05.2022 cannot be put against them. This only point pales into insignificance as there is no disputation that this trigger notice has been duly received by the Chennai Corporation on 12.05.2022 and that arbitral proceedings have commenced within the meaning of Section 21 of A and C Act on 12.05.2022. To put it differently, there has been proper invocation of arbitration clause by the petitioner. This Court reminds itself of sub-section (6A) of Section 11 of A and C Act, which reads as follows:

'(6A) 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.'

7. Aforementioned sub-section (6A) came up for consideration before Hon'ble Supreme Court in oft-quoted Mayavati Trading case law, i.e., ratio laid down by Hon'ble Supreme Court in Mayavati Trading Private Limited Vs. Pradyuat Deb Burman reported in (2019) 8 SCC 714, relevant paragraph in Mayavati Trading case law is paragraph No.10 and the same reads as follows:

'10. This being the position, it is clear that the law prior to the 2015 Amendment that has been laid down by this Court, which would have included going into whether accord and satisfaction has taken place, has now been legislatively overruled. This being the position, it is difficult to agree with the reasoning contained in the aforesaid judgments, as Section 11(6-A) is confined to the examination of the existence of an arbitration agreement and is to be understood in the narrow sense as has been laid down in the judgment in Duro Felguera SA.'

(underlining made by this Court to supply emphasis and highlight)

8. Aforementioned paragraph 10 of Mayavati Trading case law takes this Court to Duro Felguera, S.A case law i.e., Duro Felguera, S.A. Vs. Gangavaram Port Limited reported in (2017) 9 SCC 729, relevant paragraphs in Duro Felguera case law are paragraphs 47, 59 and the same read as follows:

'47. What is the effects 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(6-A) of the Arbitration and Conciliation Act, 1996, (hereinafter referred to as “the 1996 Act”) is the crucial question arising for consideration in this case.'

'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 minimize the Court’s intervention at the stage of appointing the arbitrator and this intention as incorporated in Section 11 (6A) ought to be respected. '

9. As already alluded to / delineated supra, in the case on hand, there is no disputation about the existence of arbitration agreement between the parties. As the respondents are not filing counter affidavit, no other issues such as ex facie barred by limitation [Nortel principle i.e., ratio laid down by Hon'ble Supreme Court in Bharat Sanchar Nigam Limited and another Vs. Nortel Networks India Private Limited reported in (2021) 5 SCC 738] or any other issues which are clear and glaring (not debatable, disputable and reasonably arguable) all of which have now been brought under the sweep of a Section 11 legal drill vide order rendered by Hon'ble Supreme Court day-before-yest

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erday i.e., on 20.07.2022 in Indian Oil Corporation Limited Vs.NCC Limited [Civil Appeal No.341 of 2022 (originally S.L.P (C) No.13161 of 2019)] arise. 10. Sum sequitur of the narrative, discussion and dispositive reasoning thus far, leaves this Court appointing Hon'ble Mr.Justice V.Parthiban (Retd.,), a former Judge of this Court, residing at No.5069, Z Block, 12th Street, Anna Nagar (West), Chennai – 600 040 [Ph:26280804, 26214850, Mob: 9444094401], as sole Arbitrator. Hon'ble sole Arbitrator is requested to enter upon reference, adjudicate upon arbitrable disputes qua primary contract dated 03.01.2020 and render an award by holding sittings in the 'Madras High Court Arbitration and Conciliation Centre under the aegis of this Court' (MHCAC) in accordance with the Madras High Court Arbitration Proceedings Rules 2017 and fee of the Hon'ble Arbitrator shall be as per Madras High Court Arbitration Centre (MHCAC) (Administrative Cost and Arbitrator's Fees) Rules 2017. 11. Captioned Arb.OP disposed of in the aforesaid manner. There shall be no order as to costs.
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