Full Judgment Text
Priya Soparkar 1 2 carap 13118o
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
COMMERCIAL ARBITRATION APPLICATION NO.131 OF 2018
Transocean Drilling Services (India) Pvt.Ltd. ... Applicant
Vs.
Oil & Natural Gas Corporation Ltd. ... Respondent
Mr.Kaustav Talukdar with Mr.Vishesh Kalra with Ruturaj Bankar
i/by M/s Lex Legal & Partners for the Applicant.
Mr.Pankaj Sawant, Senior Advocate with Ms.D. Dabhash with
Mr.J.P.Kapadia with Mr. O. Mohandas i/by M/s Little & Co. for
the Respondent.
CORAM : R.D.DHANUKA, J.
DATE : SEPTEMBER 25, 2018.
JUDGMENT :
1. By this application filed under Section 11(6) of the
Arbitration and Conciliation Act, 1996, the applicant has invoked
clause 28.1 of the agreement entered into between the parties
and seeks appointment of an arbitrator on behalf of the
respondent. Some of the relevant facts for the purpose of deciding
this application are as under.
2. The applicant and the respondent have entered into an
th
agreement on 24 May, 2012 for Charter Hire of the applicant's
::: Uploaded on - 01/10/2018 ::: Downloaded on - 26/06/2024 07:29:18 :::
Priya Soparkar 2 2 carap 13118o
Drilling Unit “GSF Rig 140”. Clause 28.1(1) of the said
arbitration agreement is extracted as under:
“Except as otherwise provided elsewhere in the
Agreement, if any dispute, difference, question or
disagreement arises between the parties hereto or
their respective representatives or assignees, in
connection with construction, meaning, operation,
effect, interpretation of the Agreement or breach
thereof which parties are unable to settle mutually,
the same shall be referred to Arbitration as provided
hereunder:
“A party wishing to commence arbitration
proceeding shall invoke Arbitration Clause by giving
60 days notice to the other party. The notice invoking
arbitration shall specify all the points of disputes
with details of the amount claimed to be referred to
arbitration at the time of invocation of arbitration
and not thereafter. If the claim is in foreign currency,
the claimant shall indicate its value in Indian Rupee
for the purpose of constitution of the arbitral
tribunal.”
The dispute arose between the parties. The applicant invoked
th
arbitration agreement in respect of certain disputes. On 5 March,
nd
2015 followed by notice dated 22 January, 2016, those
disputes were referred to Arbitration. Those arbitral proceedings
::: Uploaded on - 01/10/2018 ::: Downloaded on - 26/06/2024 07:29:18 :::
Priya Soparkar 3 2 carap 13118o
are already concluded. The applicant thereafter invoked
th
arbitration agreement in 19 December, 2015 in respect of
certain disputes. For those disputes, arbitral tribunal is
constituted and the arbitral proceedings are going on between
the parties. The applicant, thereafter, invoked arbitration
th
agreement by notice dated 17 March, 2018 in respect of
certain disputes.
th
3. In response to the said notice dated 16 March, 2017, the
th
respondents replied vide letter dated 27 March, 2017 and
informed the applicant that before the matter was referred to
arbitrator, respondent would seek the consent of the applicant
for referring the matter to the Outside Expert Committee(OEC).
The respondent also enclosed a format for giving consent by
the applicant for referring the matter to the said OEC. The
applicant did not agree to the said suggestion of the respondent
and filed this arbitration application under Section 11 of the
Arbitration and Conciliation Act, 1996. The applicant has already
nominated Shri Justice G.S.Singhvi, a former Judge of the Hon'ble
Supreme Court as its nominee arbitrator. Since the respondent
has not nominated any arbitrator, applicant seeks appointment of
::: Uploaded on - 01/10/2018 ::: Downloaded on - 26/06/2024 07:29:18 :::
Priya Soparkar 4 2 carap 13118o
an arbitrator on behalf of the respondent.
4. The learned counsel for the applicant invited my attention
th
to the arbitration clause and the arbitration notice dated 16
March, 2017 issued by the applicant. He also invited my
th
attention to the response of the applicant dated 27 March,
2017. It is submitted that the respondent in the said response
th
dated 27 March, 2017 did not dispute the existence of the
arbitration clause or the maintainability of the arbitration notice
th
dated 16 March, 2017, but had suggested to refer the matter to
the OEC.
5. It is submitted by the learned counsel that though the
th
arbitration notice issued by the applicant on 16 March, 2017
refers to some of the amounts deducted by the respondent during
th
the period 3rd September, 2018 and 18 December, 2015, the
dispute in respect of those notices arose only after the applicant
had invoked the arbitration agreement for the second time on
th
19 December, 2016. He submits that the respondent has refused
to refund the said amount illegally deducted by the respondent.
He submits that successive references are permitted under the
said arbitration agreement. In support of this submission, the
::: Uploaded on - 01/10/2018 ::: Downloaded on - 26/06/2024 07:29:18 :::
Priya Soparkar 5 2 carap 13118o
learned counsel placed reliance on the judgment of Supreme
Court in case of Dolphin Drilling Limited Vs. Oil and Natural
1
Gas Corporation Limited and in particular Paragraph Nos.7
and 8.
6. Mr.Pankaj Sawant, learned Senior counsel for the
respondent on the other hand laid emphasis on the words “not
thereafter” provided in clause 28.1 in the arbitration agreement.
He submits that the said arbitration clause could be invoked only
once. He submits that the clause providing that “The notice
invoking arbitration shall specify all the points of disputes with
details of the amount claimed to be referred to arbitration at the
time of invocation of arbitration agreement and not thereafter.”
would indicate that arbitration agreement could be invoked only
once.
7. It is submitted that all the claims arising out of the dispute
under the said contract awarded had to be made only once with
all the details and not thereafter. He submits that the applicant
th
had already invoked the arbitration agreement firstly on 5
th
March, 2015 r/w notice dated 27 January, 2016 and
1 (2010)3 Supreme Court Cases 267
::: Uploaded on - 01/10/2018 ::: Downloaded on - 26/06/2024 07:29:18 :::
Priya Soparkar 6 2 carap 13118o
th
thereafter, on 19 December, 2016. He submits that in so far as
second arbitration notice is concerned, the respondent has already
filed application before the arbitral tribunal under Section 16 of
the Act. It is submitted by the learned senior counsel that though
there may not be an issue of limitation, however, the arbitration
clause which permits invocation once, which is already
invoked by the applicant earlier, the dispute alleged in the third
notice if any could be referred to Civil Court by the applicant and
not to arbitral tribunal under clause 28.1 of the said agreement.
8. Learned Senior counsel also invited my attention to some
parts of clause of 28.1 in support of the submission that the said
agreement would clearly indicate that the appointment of the
arbitral tribunal is made on the basis of quantification of
claims.
9. Learned senior counsel placed reliance on the judgment of
the Supreme Court in the case of Dolphin Drilling Limited
(supra) on the ground that the arbitration clause in question
before the Hon'ble Supreme Court in the said judgment did not
state the words “and thereafter” and thus, the said judgment
would not assist the case of the applicant.
::: Uploaded on - 01/10/2018 ::: Downloaded on - 26/06/2024 07:29:18 :::
Priya Soparkar 7 2 carap 13118o
10. In support of the submission that the interpretation of the
arbitration clause in question has to be done strictly, the Learned
Senior counsel placed reliance on the judgment of the Hon'ble
Supreme Court in case of United India Insurance Co. Ltd. Vs.
1
Hyundai Engineering and Construction Co. Ltd . and in
particular Paragraph Nos. 2, 10, 12, 14, 17 and 18. He submits
that the Hon'ble Supreme Court has interpreted an identical
arbitration clause in an insurance policy and held that the clause
has to be construed strictly and if there is noncompliance of the
conditions mentioned therein, no arbitrator can be appointed
under Section 11 of the Arbitration and Conciliation Act, 1996.
11. Learned counsel for the applicant in rejoinder submits that
whether claims made by the applicant are arbitrable or not can be
agitated by the respondent by invoking under Section 16 of the
Arbitration and Conciliation Act, before the arbitral tribunal. It is
submitted by the learned counsel for the applicant that
respondent does not dispute the arbitration agreement but has
requested the applicant to give consent to refer the dispute to
Outside Expert Committee and thus, cannot be allowed to raise
1 2018 SCC Online SC 1045
::: Uploaded on - 01/10/2018 ::: Downloaded on - 26/06/2024 07:29:18 :::
Priya Soparkar 8 2 carap 13118o
an issue of alleged nonexistence of arbitral agreement in this
arbitration application.
12. I shall first decide whether applicant could invoke the
arbitration agreement only once or successive reference was
permissible. In my view, clause 28.1 of the arbitration agreement
provides the method for referring the matter to the arbitration. It
provides that the party invoking the arbitration agreement has to
give 60 days notice to the other party. It further provides that in
the notice invoking the arbitration, the party shall indicate all the
points of dispute with details of the amount claimed at the time
of invocation of the agreement and not thereafter.
13. In my view, what is contemplated in subclause 1 of clause
28.1, is that the notice invoking arbitration must indicate the
dispute with the details of the amount. The said clause does not
prohibit successive reference. If all the points of dispute with
details are not referred in the arbitration notice, such details of
the claims with amount cannot be supplied before the arbitral
tribunal. In my view, if the submission of the learned Senior
counsel for the respondent is accepted, the applicant who seeks to
invoke arbitration agreement will have to wait till completion of the
::: Uploaded on - 01/10/2018 ::: Downloaded on - 26/06/2024 07:29:18 :::
Priya Soparkar 9 2 carap 13118o
contract or can invoke arbitration only when the contract is
terminated. In my view, that is not the intent of the parties
reflected on the plain reading of subclause 1 of the clause
28.1 of the contract.
14. In this matter, the case of the applicant is that though the
deductions of various amounts were made from the bills of the
applicant during the period between 2013 and 2015, the dispute
arose and crystallized after invocation of the arbitration
agreement by the applicant for the second time. The issue as to
whether dispute arose subsequently or at the earlier point of time
can be agitated by the respondent before the arbitral tribunal.
15. A perusal of the notice invoking arbitration agreement
prima facie indicates that the applicant had summarized its case
as to when the dispute arose between the parties. The applicant
has already nominated a former Judge of the Supreme Court in
the said notice invoking arbitration agreement while raising a
demand in the sum of Rs.2,16,59,520/. A perusal of the reply of
rd
the respondent dated 23 March, 2018 to the said notice
invoking arbitration clearly indicates that it was the case of the
respondent that as the arbitration was the long drawn process to
::: Uploaded on - 01/10/2018 ::: Downloaded on - 26/06/2024 07:29:18 :::
Priya Soparkar 10 2 carap 13118o
settle the matter, the other alternative as per contract is to refer
the dispute to the “Outside Expert Committee” and based on such
understanding of the respondent of the arbitration agreement, the
respondent requested the applicant to give consent for referring
the dispute to the OEC. The respondent also forwarded a
format to the applicant for giving consent for referring the
dispute to conciliation to the said OEC.
16. In my view, the respondent has thus not disputed the
existence of the arbitration agreement or the maintainability of
th
notice invoking arbitration by the applicant on 16 March, 2017.
th
It is clear from the plain reading of the response dated 27
March, 2017 that the respondent wanted the applicant to give
consent for referring the dispute to the OEC in view of the long
drawn process of the arbitral proceedings.
17. The Hon'ble Supreme Court in case of United India
Insurance Co. Ltd. has interpreted one of the arbitration
agreement in a contract between the petitioner therein and the
ONGC Limited. Though the words “not thereafter” is not referred
th
in clause 28.1 of the agreement dated 27 October, 2003, which
was the subject matter before the Hon'ble Supreme Court, in view
::: Uploaded on - 01/10/2018 ::: Downloaded on - 26/06/2024 07:29:18 :::
Priya Soparkar 11 2 carap 13118o
of the fact that this court has held that the successive references
under said clause 28.1 are permissible, in my view the judgment of
the Hon'ble Supreme Court in case of United India Insurance
Co. Ltd. (supra) would assist the case of the applicant.
18. In so far as the judgment delivered by the Hon'ble Supreme
Court in case of United India Insurance Co. Ltd., relied upon by
the senior learned counsel for the respondent is concerned, the
clause in question before the Hon'ble Supreme Court was “It is
clearly agreed and understood that no difference or dispute shall
be referable to arbitration as herein before provided, if the
Company has disputed or not accepted liability under or in
respect of this Policy.”
19. On interpretation of the said clause and after considering
the correspondence exchanged between the parties, the Hon'ble
Supreme Court held that the Insurance Company had
repudiated the claim of the insurer and thus, arbitration clause
providing that if the insurance company had disputed or not
accepted the liability, then only the reference of dispute shall be
referred to arbitration, the dispute could not be referred to
arbitration. The arbitration clause in question and under
::: Uploaded on - 01/10/2018 ::: Downloaded on - 26/06/2024 07:29:18 :::
Priya Soparkar 12 2 carap 13118o
consideration in this arbitration application is totally different.
The facts before the Hon'ble Supreme Court were totally
different. It was not the case of the respondent before the Hon'ble
Supreme Court that insurance company had not disputed the
liability of the claim proposed to be made by the respondent. In
my view, the judgment of the Supreme Court in case of United
India Insurance Co. Ltd. is clearly distinguishable in the facts of
this case and would not assist the case of the respondent. The
reliance placed by the learned senior counsel on the said
judgment is misplaced. In my view, since the respondent has not
nominated any arbitrator inspite of receipt of the notice
invoking arbitration agreement by the applicant, the present
application filed under Section 11(6) of the application is
maintainable for appointment of the nominee arbitrator on
behalf of the respondent. I therefore, pass the following order:
ORDER
i) I propose to nominate Shri Justice J.P.Deodhar, a former
Judge of this court as an arbitrator on behalf of the respondent.
ii) The learned prospective arbitrator is required to file
statement of disclosure under Section 11(8) read with Section
::: Uploaded on - 01/10/2018 ::: Downloaded on - 26/06/2024 07:29:18 :::
Priya Soparkar 13 2 carap 13118o
12(1) of the Arbitration and Conciliation Act, 1996. The address
of the learned prospective arbitrator is as under:
“311, Churchgate Chambers, 5 New Marine Lines,
Next to American Centre, Churchgate, Mumbai 400
020.”
iii) The applicant is directed to obtain the statement of
disclosure from the learned prospective arbitrator on or before the
next date and tender the same before this court on the next date.
th
19. Place the matter on board on 8 October, 2018, for
directions.
( R.D.DHANUKA, J. )
::: Uploaded on - 01/10/2018 ::: Downloaded on - 26/06/2024 07:29:18 :::
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
COMMERCIAL ARBITRATION APPLICATION NO.131 OF 2018
Transocean Drilling Services (India) Pvt.Ltd. ... Applicant
Vs.
Oil & Natural Gas Corporation Ltd. ... Respondent
Mr.Kaustav Talukdar with Mr.Vishesh Kalra with Ruturaj Bankar
i/by M/s Lex Legal & Partners for the Applicant.
Mr.Pankaj Sawant, Senior Advocate with Ms.D. Dabhash with
Mr.J.P.Kapadia with Mr. O. Mohandas i/by M/s Little & Co. for
the Respondent.
CORAM : R.D.DHANUKA, J.
DATE : SEPTEMBER 25, 2018.
JUDGMENT :
1. By this application filed under Section 11(6) of the
Arbitration and Conciliation Act, 1996, the applicant has invoked
clause 28.1 of the agreement entered into between the parties
and seeks appointment of an arbitrator on behalf of the
respondent. Some of the relevant facts for the purpose of deciding
this application are as under.
2. The applicant and the respondent have entered into an
th
agreement on 24 May, 2012 for Charter Hire of the applicant's
::: Uploaded on - 01/10/2018 ::: Downloaded on - 26/06/2024 07:29:18 :::
Priya Soparkar 2 2 carap 13118o
Drilling Unit “GSF Rig 140”. Clause 28.1(1) of the said
arbitration agreement is extracted as under:
“Except as otherwise provided elsewhere in the
Agreement, if any dispute, difference, question or
disagreement arises between the parties hereto or
their respective representatives or assignees, in
connection with construction, meaning, operation,
effect, interpretation of the Agreement or breach
thereof which parties are unable to settle mutually,
the same shall be referred to Arbitration as provided
hereunder:
“A party wishing to commence arbitration
proceeding shall invoke Arbitration Clause by giving
60 days notice to the other party. The notice invoking
arbitration shall specify all the points of disputes
with details of the amount claimed to be referred to
arbitration at the time of invocation of arbitration
and not thereafter. If the claim is in foreign currency,
the claimant shall indicate its value in Indian Rupee
for the purpose of constitution of the arbitral
tribunal.”
The dispute arose between the parties. The applicant invoked
th
arbitration agreement in respect of certain disputes. On 5 March,
nd
2015 followed by notice dated 22 January, 2016, those
disputes were referred to Arbitration. Those arbitral proceedings
::: Uploaded on - 01/10/2018 ::: Downloaded on - 26/06/2024 07:29:18 :::
Priya Soparkar 3 2 carap 13118o
are already concluded. The applicant thereafter invoked
th
arbitration agreement in 19 December, 2015 in respect of
certain disputes. For those disputes, arbitral tribunal is
constituted and the arbitral proceedings are going on between
the parties. The applicant, thereafter, invoked arbitration
th
agreement by notice dated 17 March, 2018 in respect of
certain disputes.
th
3. In response to the said notice dated 16 March, 2017, the
th
respondents replied vide letter dated 27 March, 2017 and
informed the applicant that before the matter was referred to
arbitrator, respondent would seek the consent of the applicant
for referring the matter to the Outside Expert Committee(OEC).
The respondent also enclosed a format for giving consent by
the applicant for referring the matter to the said OEC. The
applicant did not agree to the said suggestion of the respondent
and filed this arbitration application under Section 11 of the
Arbitration and Conciliation Act, 1996. The applicant has already
nominated Shri Justice G.S.Singhvi, a former Judge of the Hon'ble
Supreme Court as its nominee arbitrator. Since the respondent
has not nominated any arbitrator, applicant seeks appointment of
::: Uploaded on - 01/10/2018 ::: Downloaded on - 26/06/2024 07:29:18 :::
Priya Soparkar 4 2 carap 13118o
an arbitrator on behalf of the respondent.
4. The learned counsel for the applicant invited my attention
th
to the arbitration clause and the arbitration notice dated 16
March, 2017 issued by the applicant. He also invited my
th
attention to the response of the applicant dated 27 March,
2017. It is submitted that the respondent in the said response
th
dated 27 March, 2017 did not dispute the existence of the
arbitration clause or the maintainability of the arbitration notice
th
dated 16 March, 2017, but had suggested to refer the matter to
the OEC.
5. It is submitted by the learned counsel that though the
th
arbitration notice issued by the applicant on 16 March, 2017
refers to some of the amounts deducted by the respondent during
th
the period 3rd September, 2018 and 18 December, 2015, the
dispute in respect of those notices arose only after the applicant
had invoked the arbitration agreement for the second time on
th
19 December, 2016. He submits that the respondent has refused
to refund the said amount illegally deducted by the respondent.
He submits that successive references are permitted under the
said arbitration agreement. In support of this submission, the
::: Uploaded on - 01/10/2018 ::: Downloaded on - 26/06/2024 07:29:18 :::
Priya Soparkar 5 2 carap 13118o
learned counsel placed reliance on the judgment of Supreme
Court in case of Dolphin Drilling Limited Vs. Oil and Natural
1
Gas Corporation Limited and in particular Paragraph Nos.7
and 8.
6. Mr.Pankaj Sawant, learned Senior counsel for the
respondent on the other hand laid emphasis on the words “not
thereafter” provided in clause 28.1 in the arbitration agreement.
He submits that the said arbitration clause could be invoked only
once. He submits that the clause providing that “The notice
invoking arbitration shall specify all the points of disputes with
details of the amount claimed to be referred to arbitration at the
time of invocation of arbitration agreement and not thereafter.”
would indicate that arbitration agreement could be invoked only
once.
7. It is submitted that all the claims arising out of the dispute
under the said contract awarded had to be made only once with
all the details and not thereafter. He submits that the applicant
th
had already invoked the arbitration agreement firstly on 5
th
March, 2015 r/w notice dated 27 January, 2016 and
1 (2010)3 Supreme Court Cases 267
::: Uploaded on - 01/10/2018 ::: Downloaded on - 26/06/2024 07:29:18 :::
Priya Soparkar 6 2 carap 13118o
th
thereafter, on 19 December, 2016. He submits that in so far as
second arbitration notice is concerned, the respondent has already
filed application before the arbitral tribunal under Section 16 of
the Act. It is submitted by the learned senior counsel that though
there may not be an issue of limitation, however, the arbitration
clause which permits invocation once, which is already
invoked by the applicant earlier, the dispute alleged in the third
notice if any could be referred to Civil Court by the applicant and
not to arbitral tribunal under clause 28.1 of the said agreement.
8. Learned Senior counsel also invited my attention to some
parts of clause of 28.1 in support of the submission that the said
agreement would clearly indicate that the appointment of the
arbitral tribunal is made on the basis of quantification of
claims.
9. Learned senior counsel placed reliance on the judgment of
the Supreme Court in the case of Dolphin Drilling Limited
(supra) on the ground that the arbitration clause in question
before the Hon'ble Supreme Court in the said judgment did not
state the words “and thereafter” and thus, the said judgment
would not assist the case of the applicant.
::: Uploaded on - 01/10/2018 ::: Downloaded on - 26/06/2024 07:29:18 :::
Priya Soparkar 7 2 carap 13118o
10. In support of the submission that the interpretation of the
arbitration clause in question has to be done strictly, the Learned
Senior counsel placed reliance on the judgment of the Hon'ble
Supreme Court in case of United India Insurance Co. Ltd. Vs.
1
Hyundai Engineering and Construction Co. Ltd . and in
particular Paragraph Nos. 2, 10, 12, 14, 17 and 18. He submits
that the Hon'ble Supreme Court has interpreted an identical
arbitration clause in an insurance policy and held that the clause
has to be construed strictly and if there is noncompliance of the
conditions mentioned therein, no arbitrator can be appointed
under Section 11 of the Arbitration and Conciliation Act, 1996.
11. Learned counsel for the applicant in rejoinder submits that
whether claims made by the applicant are arbitrable or not can be
agitated by the respondent by invoking under Section 16 of the
Arbitration and Conciliation Act, before the arbitral tribunal. It is
submitted by the learned counsel for the applicant that
respondent does not dispute the arbitration agreement but has
requested the applicant to give consent to refer the dispute to
Outside Expert Committee and thus, cannot be allowed to raise
1 2018 SCC Online SC 1045
::: Uploaded on - 01/10/2018 ::: Downloaded on - 26/06/2024 07:29:18 :::
Priya Soparkar 8 2 carap 13118o
an issue of alleged nonexistence of arbitral agreement in this
arbitration application.
12. I shall first decide whether applicant could invoke the
arbitration agreement only once or successive reference was
permissible. In my view, clause 28.1 of the arbitration agreement
provides the method for referring the matter to the arbitration. It
provides that the party invoking the arbitration agreement has to
give 60 days notice to the other party. It further provides that in
the notice invoking the arbitration, the party shall indicate all the
points of dispute with details of the amount claimed at the time
of invocation of the agreement and not thereafter.
13. In my view, what is contemplated in subclause 1 of clause
28.1, is that the notice invoking arbitration must indicate the
dispute with the details of the amount. The said clause does not
prohibit successive reference. If all the points of dispute with
details are not referred in the arbitration notice, such details of
the claims with amount cannot be supplied before the arbitral
tribunal. In my view, if the submission of the learned Senior
counsel for the respondent is accepted, the applicant who seeks to
invoke arbitration agreement will have to wait till completion of the
::: Uploaded on - 01/10/2018 ::: Downloaded on - 26/06/2024 07:29:18 :::
Priya Soparkar 9 2 carap 13118o
contract or can invoke arbitration only when the contract is
terminated. In my view, that is not the intent of the parties
reflected on the plain reading of subclause 1 of the clause
28.1 of the contract.
14. In this matter, the case of the applicant is that though the
deductions of various amounts were made from the bills of the
applicant during the period between 2013 and 2015, the dispute
arose and crystallized after invocation of the arbitration
agreement by the applicant for the second time. The issue as to
whether dispute arose subsequently or at the earlier point of time
can be agitated by the respondent before the arbitral tribunal.
15. A perusal of the notice invoking arbitration agreement
prima facie indicates that the applicant had summarized its case
as to when the dispute arose between the parties. The applicant
has already nominated a former Judge of the Supreme Court in
the said notice invoking arbitration agreement while raising a
demand in the sum of Rs.2,16,59,520/. A perusal of the reply of
rd
the respondent dated 23 March, 2018 to the said notice
invoking arbitration clearly indicates that it was the case of the
respondent that as the arbitration was the long drawn process to
::: Uploaded on - 01/10/2018 ::: Downloaded on - 26/06/2024 07:29:18 :::
Priya Soparkar 10 2 carap 13118o
settle the matter, the other alternative as per contract is to refer
the dispute to the “Outside Expert Committee” and based on such
understanding of the respondent of the arbitration agreement, the
respondent requested the applicant to give consent for referring
the dispute to the OEC. The respondent also forwarded a
format to the applicant for giving consent for referring the
dispute to conciliation to the said OEC.
16. In my view, the respondent has thus not disputed the
existence of the arbitration agreement or the maintainability of
th
notice invoking arbitration by the applicant on 16 March, 2017.
th
It is clear from the plain reading of the response dated 27
March, 2017 that the respondent wanted the applicant to give
consent for referring the dispute to the OEC in view of the long
drawn process of the arbitral proceedings.
17. The Hon'ble Supreme Court in case of United India
Insurance Co. Ltd. has interpreted one of the arbitration
agreement in a contract between the petitioner therein and the
ONGC Limited. Though the words “not thereafter” is not referred
th
in clause 28.1 of the agreement dated 27 October, 2003, which
was the subject matter before the Hon'ble Supreme Court, in view
::: Uploaded on - 01/10/2018 ::: Downloaded on - 26/06/2024 07:29:18 :::
Priya Soparkar 11 2 carap 13118o
of the fact that this court has held that the successive references
under said clause 28.1 are permissible, in my view the judgment of
the Hon'ble Supreme Court in case of United India Insurance
Co. Ltd. (supra) would assist the case of the applicant.
18. In so far as the judgment delivered by the Hon'ble Supreme
Court in case of United India Insurance Co. Ltd., relied upon by
the senior learned counsel for the respondent is concerned, the
clause in question before the Hon'ble Supreme Court was “It is
clearly agreed and understood that no difference or dispute shall
be referable to arbitration as herein before provided, if the
Company has disputed or not accepted liability under or in
respect of this Policy.”
19. On interpretation of the said clause and after considering
the correspondence exchanged between the parties, the Hon'ble
Supreme Court held that the Insurance Company had
repudiated the claim of the insurer and thus, arbitration clause
providing that if the insurance company had disputed or not
accepted the liability, then only the reference of dispute shall be
referred to arbitration, the dispute could not be referred to
arbitration. The arbitration clause in question and under
::: Uploaded on - 01/10/2018 ::: Downloaded on - 26/06/2024 07:29:18 :::
Priya Soparkar 12 2 carap 13118o
consideration in this arbitration application is totally different.
The facts before the Hon'ble Supreme Court were totally
different. It was not the case of the respondent before the Hon'ble
Supreme Court that insurance company had not disputed the
liability of the claim proposed to be made by the respondent. In
my view, the judgment of the Supreme Court in case of United
India Insurance Co. Ltd. is clearly distinguishable in the facts of
this case and would not assist the case of the respondent. The
reliance placed by the learned senior counsel on the said
judgment is misplaced. In my view, since the respondent has not
nominated any arbitrator inspite of receipt of the notice
invoking arbitration agreement by the applicant, the present
application filed under Section 11(6) of the application is
maintainable for appointment of the nominee arbitrator on
behalf of the respondent. I therefore, pass the following order:
ORDER
i) I propose to nominate Shri Justice J.P.Deodhar, a former
Judge of this court as an arbitrator on behalf of the respondent.
ii) The learned prospective arbitrator is required to file
statement of disclosure under Section 11(8) read with Section
::: Uploaded on - 01/10/2018 ::: Downloaded on - 26/06/2024 07:29:18 :::
Priya Soparkar 13 2 carap 13118o
12(1) of the Arbitration and Conciliation Act, 1996. The address
of the learned prospective arbitrator is as under:
“311, Churchgate Chambers, 5 New Marine Lines,
Next to American Centre, Churchgate, Mumbai 400
020.”
iii) The applicant is directed to obtain the statement of
disclosure from the learned prospective arbitrator on or before the
next date and tender the same before this court on the next date.
th
19. Place the matter on board on 8 October, 2018, for
directions.
( R.D.DHANUKA, J. )
::: Uploaded on - 01/10/2018 ::: Downloaded on - 26/06/2024 07:29:18 :::