Skip to main content

For arbitration, there has to be a specific allegation about existence of an arbitration agreement by one party and non denial thereof by other party

In MS. G. KAPOOR vs M/S REACON ENGINEERS PVT. LTD., before the Delhi High Court in ARB.P. 131/2019, the petitioner and the respondent entered into an agreement for carrying out internal electrical works for renovation and expansion of ESIC Hospital, Okhla Project. The main contract was between ESIC and TCIL. A further sub-contract was between the respondent and TCIL. Due to payment dispute, the petitioner applied for appointment of arbitrator arguing that clause 2 of the LOI based on which the respondent had awarded contract to the petitioner clearly states that the scope of work, commercial and technical terms and conditions including payment terms of contract between the petitioner and the respondent is on back-to-back basis with the main contract between the ESIC and TCIL and as such all the terms and conditions will apply to the agreement between the petitioner and the respondent including the arbitration clause.

The respondent argued that any incorporation of an arbitration clause has to be by way of a specific reference to the arbitration clause. In other words, there has to be a specific incorporation of the arbitration clause and in the absence of such clause having been incorporated in the LOI, it cannot be said an arbitration clause / agreement binds the parties herein.

The High Court observed that the said clause 2 does mention 'back to back basis' and that the words ''back-to-back basis‟ has some meaning / relevance. The words ''back-to-back‟ means “consecutive” as per the Cambridge Guide (Ref: Cambridge Guide to English Usage), Cambridge University Press, South Asian Edition, 2004.

Further, in reply dated December 19, 2016 to the notice of the petitioner, the respondent had not disputed the existence of the arbitration clause between them. The relevant portion of which has been reproduced above does reveal that the respondent intended to suggest its own list of Arbitrators if at all dispute is relegated for arbitration. The words “if at all the dispute is relegated for arbitration” has to be read in the context that the respondent disputed the claim raised by the petitioner in its notice but not their arbitrability.

Referring to the judgment of the Supreme Court in S.N. Prasad, Hitek Industries (Bihar) Ltd. v. Monnet Finance Ltd. and Ors. (2011) 1 SCC 320, the High Court held that it is clear, that to constitute an arbitration agreement under Section 7(4)(c) of the Act, there is a statement of claim containing a specific allegation about the existence of an arbitration agreement by the petitioner and non denial thereof by the other party. The said requirement is fulfilled in this case, inasmuch as the respondent did not dispute the existence of an arbitration clause.

Comments

Post a Comment

Most viewed this month

One Sided Clauses In Builder-Buyer Agreements Is An Unfair Trade Practice

In CIVIL APPEAL NO. 12238 OF 2018, Pioneer Urban Land & Infrastructure Ltd. vs Govindan Raghavan, an appeal was filed before the Supreme Court  by the builder against the order of the National Consumer Forum. The builder had relied upon various clauses of the Apartment Buyer’s Agreement to refute the claim of the respondent but was rejected by the commission which found the said clauses as wholly one-sided, unfair and unreasonable, and could not be relied upon. The Supreme Court on perusal of the Apartment Buyer’s Agreement found stark incongruities between the remedies available to both the parties. For example, Clause 6.4 (ii) of the Agreement entitles the Appellant – Builder to charge Interest @18% p.a. on account of any delay in payment of installments from the Respondent – Flat Purchaser. Clause 6.4 (iii) of the Agreement entitles the Appellant – Builder to cancel the allotment and terminate the Agreement, if any installment remains in arrears for more than 30 da...
Post a Comment
Read more

Inherited property of childless hindu woman devolve onto heirs of her parents

In Tarabai Dagdu Nitanware vs Narayan Keru Nitanware, quashing an order passed by a joint civil judge junior division, Pune, the Bombay High Court has held that under Section 15 of the Hindu Succession Act, any property inherited by a female Hindu from her father or mother, will devolve upon the heirs of her father/mother, if she dies without any children of her own, and not upon her husband. Justice Shalini Phansalkar Joshi was hearing a writ petition filed by relatives of one Sundarabai, who died issueless more than 45 years ago on June 18, 1962. Article referred:http://www.livelaw.in/property-inherited-female-hindu-parents-shall-devolve-upon-heirs-father-not-husband-dies-childless-bombay-hc-read-judgment/
Post a Comment
Read more

Court approached in the early stages of arbitration will prevail in all other subsequent proceedings

In National Highway Authority of India v. Hindustan Steelworks Construction Limited, the Hon'ble Delhi High Court opined that once the parties have approached a certain court for relief under Act at earlier stages of disputes then it is same court that, parties must return to for all other subsequent proceedings. Language of Section 42 of Act is categorical and brooks no exception. In fact, the language used has the effect of jurisdiction of all courts since it states that once an application has been made in Part I of the Act then ―that Court alone shall have jurisdiction over arbitral proceedings and all subsequent applications arising out of that agreement and arbitral proceedings shall be made in that Court and in no other Court. Court holds that NHAI in present case cannot take advantage of Section 14 of the Limitation Act, 1963 for explaining inordinate delay in filing present petition under Section 34 of this Act in this Court.
Post a Comment
Read more