MARINE PRODUCTS EXPORT DEVELOPMENT AUTHORITY v. F.EDISON

ORDER The application has been filed for appointment of an Arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996 for settling of disputes between the petitioner and the respondents. Annexure A1 is the Financial Collaboration Agreement between the parties and Clause 10 of the agreement says that all differences and disputes between the petitioner and the other parties to the agreement or either of them on the other hand on clause or matter contained in the agreement or on their respective rights, claims or liabilities will be referred to arbitration by two Arbitrators, one to be appointed by the petitioner and the other to be appointment by Promoter or the Company, as the case may be. It is also provided that the nominated Arbitrators shall, before proceeding with the reference, appoint an Umpire and arbitration shall be governed by the provisions of the Indian Arbitration Act, 1940. The agreement is dated 23.09.1993, when the Indian Arbitration Act, 1940 was in force. The respondents have taken a contention that the reference AR NO. 181 OF 2023 3 cannot be sought for under the new Act, since the old Act has been repealed and Section 85 does not permit such reference to arbitration, since the parties have not agreed otherwise.

2. I do not think that the said argument can be countenanced. Section 85 only deals with the repeal of the old Act and the saving clause is relating to arbitrations which have commenced under the old Act. It does not take in arbitrations which are yet to be commenced on the basis of an arbitral agreement. The only other question is whether the reference to the Arbitration Act, 1940 contained in Clause 10 would have the effect of removing arbitration clause from the agreement on the coming into force of the new Act. An inference of the above nature is not possible. The Arbitration Act, 1940 and the present Act, deal with the manner in which a dispute is to be resolved and the arbitration agreement is a contract between the parties. When the parties have agreed for reference to arbitration, a change in the Statute will not in any manner affect the said agreement. There is no provision in the 1996 Act, which nullifies the existing agreements for arbitration.

3. Hence, I am of the opinion that an agreement which is continuing to be in force after the date of coming into force of the AR NO. 181 OF 2023 4 new Act, and which contains an arbitration Clause, will be governed by the new Act so long as the agreement is not terminated. Admittedly, Annexure A1 is not terminated by either of the parties. Another contention raised by the counsel for the respondents is that the right, if any, of the petitioner will arise only after the company has started production and in the case on hand, the company has never been able to become operational. This is an aspect which has to be considered by the Arbitrator in the arbitration proceedings and need not be considered at this stage. In the above circumstances, the following orders are issued; (i) The petitioner has already nominated Sri.Antony P.S. (Rtd. District Judge), Pazhampilly House, Near Thottiyil Temple, Padamugal, Kakkanad P.O., Kochi 682030 as their Arbitrator. Sri.Paul Simon (Rtd. District Judge), Koodaram, Mourya Villas, Kennedy Mukku, Edappally, Ernakulam 682024 is nominated as the Arbitrator of the respondent. The Registry is directed to communicate a copy of this order to the learned Arbitrators, within a period of two weeks from today and to obtain a Statement of Disclosure from them under Section 11(8) read with Section 12(1) of the Arbitration and Conciliation Act, 1996. AR NO. 181 OF 2023 5 (ii) The above said Arbitrators shall appoint a third Arbitrator, who shall act as the Presiding Arbitrator. The Presiding Arbitrator shall also submit the statement of disclosure under Section 11(8) read with Section 12(1) of the Arbitration and Conciliation Act, 1996. (iii) Once the Disclosure Statement is obtained from the learned Arbitrators, the Registry shall release the certified copy of this order, with a copy of the said statement appended to it, retaining the original of the same on the files of this case. (iv) The fees of the Arbitrators shall be governed by the Fourth schedule to the Arbitration and Conciliation Act, 1996. Sd/- T.R. RAVI JUDGE Pn AR NO. 181 OF 2023 6 APPENDIX OF AR 181/2023 PETITIONER'S ANNEXURES Annexure A1 Annexure A2 Annexure A3 Annexure A4 Annexure A5 Annexure A6 Annexure A7 Annexure A8 A TRUE COPY OF THE FINANCIAL COLLABORATION AGREEMENT AND EQUITY BUY BACK SCHEME BETWEEN THE PETITIONER AND THE FIRST AND THE SECOND RESPONDENTS ENTERED INTO ON 23-09-1993. TRUE COPY OF THE LETTER SENT BY THE PETITIONER HEREIN TO RESPONDENTS 1 AND 2 DATED 22-10-2021. TRUE COPY OF THE REPLY BY THE FIRST RESPONDENT DATED 28-10-2021 TO THE LETTER DATED 22-10-2021 ISSUED BY THE PETITIONER STATING THAT THE SECOND RESPONDENT COMPANY WAS NOT IN EXISTENCE PER THE RECORDS OF THE REGISTRAR OF COMPANIES, KERALA. TRUE COPY OF THE REPORT OF THE COMPANY SECRETARY EXPLAINING THE STATUS OF THE COMPANY DATED 06-11-2021. TRUE COPY OF THIS LETTER FROM THE PETITIONER DATED 12-11-2021. TRUE COPY OF THE INDEPENDENT AUDITOR'S REPORT OF THE SECOND RESPONDENT COMPANY. MEMORANDUM OF THE PETITION UNDER SECTION 9 OF THE ARBITRATION AND CONCILIATION ACT, 1996 PREFERRED BY THE PETITIONER HEREIN AGAINST THE RESPONDENTS HEREIN. TRUE COPY OF THE ORDER DATED 14-02-2022 IN OP ARB 214 OF 2021 BY DISTRICT COURT ERNAKULAM. Annexure A9 TRUE COPY OF THE JUDGMENT DATED 01.09.2022 OF THE HON'BLE HIGH COURT OF KERALA IN AR NO. 181 OF 2023 7 Annexure A10 Annexure A11 ARBITRATION APPEAL NO. 12/2022 TRUE COPY OF THE NOTICE ISSUED BY THE PETITIONER UNDER SECTION 21 OF THE ARBITRATION AND CONCILIATION ACT, 1996 TRUE COPY OF THE REPLY DATED 20/02/2023 BY THE RESPONDENT TO THE NOTICE ISSUED BY THE PETITIONER UNDER SECTION 21 OF THE ARBITRATION AND CONCILIATION ACT, 1996