High Court
Case Details
CRP 501/2012 BEFORE THE HON’BLE MR. JUSTICE B.P. KATAKEY Heard Mr. NC Das, learned counsel for the petitioners and Mr. B Pathak, learned counsel for the respondent. The petitioners, who are the defendants in Title Suit No.401/2012 pending in the Court of the learned Munsiff No.2, Kamrup at Guwahati, are aggrieved by the ord er dated 15th October, 2012 passed in the said suit rejecting the application fi led by the petitioners under Section 8 of the Arbitration and Conciliation Act, 1996 (in short, (cid:28)1996 Act (cid:29)) praying for referring the parties to arbitration, th ere being an arbitration agreement between the parties. The learned counsel appearing for the petitioners referring the provisions of Se ction 8 of the 1996 Act as well as the arbitration agreement has submitted that since the parties have agreed for resolution of their disputes/differences by wa y of arbitration to be conducted under the provisions of the 1996 Act, the learn ed Munsiff was not justified in rejecting the application filed under Section 8 of the said Act on the ground that the arbitration Clause: 11 lacks the binding affect. It has also been submitted that the learned Munsiff has also committed illegality in rejecting the prayer on the ground that the relief, which has been claimed in the suit, cannot be granted in the arbitration proceeding by the arb itrator. The learned counsel, therefore, submits that the impugned order may be set aside and the learned Court below may be directed to refer the parties to th e arbitration, in view of Clause: 11 of the contract between the parties. Mr. Das, learned counsel for the petitioners submits that though in the contract between the parties, it has been stipulated that the place of arbitration would be at Kolkata or at any place at the choice of the present petitioners, the pet
Legal Reasoning
itioners have agreed for arbitration to be held at Guwahati. Mr. Pathak, learned counsel appearing for the respondent, on the other hand, has submitted that since in the arbitration clause, i.e. Clause: 11 of the contrac t between the parties, it has not been specifically stated that the award passed by the arbitrator would have binding affect on both the parties, the learned Mu nsiff has rightly refused the prayer made in the application filed under Section 8 of the 1996 Act. I have perused the impugned order dated 15th October, 2012 and also the arbitrat ion clause in the contract between the parties. For better appreciation, Clause : 11 of the contract is quoted in its entirety:- (cid:28)11. The parties to this Agreement hereby agree that they intend to discharge th eir obligations in utmost good faith. The parties therefore agree that they sha ll, at all times, act in good faith, and make all attempts to resolve all differ ences however, arising out of or in connection with this Agreement by discussion failing which, by arbitration. All disputes differences or questions whatsoever which shall either during the c ontinuance of this Agreement of afterwards arise between the Company and FVRL, o r between their respective representatives or between any of these presents and the representatives of the other party thereof or any clause or thing herein con tained or any account or liability between the parties or as to any act deed or omission of any parties hereto in any way relating to these presents be referred to a single arbitrator in case the parties agree upon the one otherwise to two arbitrators one to be appointed by each of the parties hereto and to an umpire t o be appointed by such arbitrators before entering upon the references and such reference shall be continued as a reference under the Arbitration and Conciliati on Act, 1996 or any statutory modification or reenactment thereof for the time b eing in force and the Arbitration proceedings as also the proceedings before the umpire shall be held and conducted in Kolkata and the competent court in Kolkat a or any other places in India of the FVRL’s choice alone shall have jurisdictio n in the matter. (cid:29) Sub-Section (1) of Section 8 of the 1996 Act provides that a judicial authority before which an action is brought in a matter which is the subject of an arbitra tion agreement shall, if a party so applies not later than when submitting his f irst statement on the substance of the dispute, refer the parties to arbitration . The mandate of law, therefore, is to refer the parties to the arbitration in c ase there is an agreement between the parties to settle their disputes by arbitr ation. In the instant case, in Clause: 11 of the contract, the parties have agreed to s ettle all their disputes, differences or questions whatsoever by arbitration by referring the same to a single arbitrator in case both the parties agree upon on e, otherwise to two arbitrators, one to be appointed by each of the parties and to an umpire to be appointed by such arbitrators before entering upon the refere nces and such reference shall be continued as a reference under the 1996 Act. I t, therefore, appears from the said clause that the parties have agreed that wha tever award is passed by the arbitrator would be binding on them and hence, the learned Court below was not justified in recording the finding that the parties have not agreed specifically for binding affect of the award to be passed by the arbitrator. That apart, the relief claimed in the suit being the challenge to the quit notice, which is the dispute between the parties, it cannot be said tha t the arbitrator cannot enter into arbitration and it is the civil Court only, w ho can pass the decree. In view of the above, the order dated 15th October, 2012 passed by the learned M unsiff is set aside. The learned Munsiff is directed to refer the parties to ar bitration by invoking Sub-Section (1) of Section 8 of the 1996 Act. The revision petition is accordingly allowed.