Full Judgment Text
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IN THE SUPREME COURT OF INDIA
CIVIL ORIGINAL JURISDICTION
ARBITRATION PETITION NO. 18 OF 2011
M/S. CALCUTTA INDUSTRIAL CORP. Petitioner(s)
VERSUS
M/S. JAYA STEEL & SCRAP LLC Respondent(s)
O R D E R
This is an application filed under Section
11(6) of the Arbitration and Conciliation Act, 1996
read with paragraph 3 of the Scheme framed by
Hon'ble the Chief Justice of India under Section
11(10) of the said Act for appointment of an
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arbitrator.
It is the case of the petitioner that the
parties had entered into an agreement dated
25.5.2009. As per the agreement, the respondent
non-applicant was to supply 12500 MT metal scraps
consisting of used Rails to the petitioner-
applicant. The rate was fixed at USD
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240/PMT/CIF/ASWP and the total contract value was
USD $ 3,000,000.00 (Three Million United States
Dollars). The payment was to be made on DP basis
(i.e Presentation of Documents) within 4-7 days of
receipt of documents in buyers (petitioner) bank as
mentioned in Article 14 of the agreement. Article
20 of the agreement provided for a penalty in case
of failure/late delivery of the materials.
In accordance with the agreement, the
applicant has sent to the non-applicant $ 1,000,000
(One Million Dollars) from time to time, but no
material was received from the non-applicant. In
the meantime, in anticipation of the receipt of the
material, the applicant had already entered into an
agreement for sale of the same. In spite of the
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repeated requests, the material was not sent by the
non-applicant. Consequently, on 29.10.2009, the
applicant sent a notice to the non-applicant seeking
to refer the matter to arbitration in terms of the
arbitration clause contained in Article 24 of the
Agreement which reads as under:
“This contract the Polish law, the European
Union member is only accepted any dispute
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arising from or in connection with the
contract shall be settled through friendly
negotiation. In case no settlement is
reached, the dispute shall be submitted to
District Court in Spain and India for
arbitration in accordance with its rules in
effect at the time of applying for
arbitration. The arbitral award is final and
binding upon both parties.”
A perusal of the aforesaid clause indicates
that the parties were at liberty to submit to the
arbitration to an appropriate authority either in
Spain or in India. By the aforesaid notice, the
applicant has chosen to seek arbitration in India.
In spite of the opportunity having been given to the
non-applicant, they have not chosen to nominate any
arbitrator.
JUDGMENT
The Office Report indicates that the service
of notice in this matter is complete. However, in
spite of the notice having been served, none appears
on behalf of the non-applicant. The averments made
in the petition have remained un-controverted. The
arbitration clause does not indicate as to whether
the arbitration is to be referred to a sole
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arbitrator or more than one arbitrator.
Learned counsel for the applicant submits
that the applicant would be satisfied if the matter
is referred to the sole Arbitrator. He has also
submitted that it would be appropriate to nominate a
former Judge of this Court.
In my opinion, there is a valid subsisting
arbitration clause. The non-applicant seems to have
prima facie acted in breach of the agreement. The
dispute seems to have arisen out of a bona fide
arrangement between the parties. The arbitration
petition also seems to have been filed within
limitation. In such circumstances, I allow this
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petition and refer the dispute raised in this
petition or any other dispute that may become
available to the parties, to the sole arbitrator.
The non-applicant shall be at liberty to raise any
counter-claim, if so advised.
I hereby appoint Mr. Justice B.P. Singh,
former Judge of this Court, residing at A-7, Neeti
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rd
Bagh, (3 Floor), New Delhi-110049, as the sole
Arbitrator.
The learned arbitrator shall be at liberty to
fix his own remuneration and any other terms and
conditions for the arbitration as deemed fit and
proper, at his sole discretion. The seat of the
arbitration shall be in Delhi. However, the
Arbitrator may hold the arbitration proceedings at a
place most convenient to the parties, either within
India or outside India.
Let a copy of this order be communicated to
the learned Arbitrator so that he may enter upon
reference as expeditiously as possible.
JUDGMENT
.....................J
(SURINDER SINGH NIJJAR)
New Delhi;
July 25, 2012.
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