The High Court
Case Details
IN THE HIGH COURT OF ORISSA AT CUTTACK ARBP No.97 of 2024 M/s. Grim Tech Projects India Pvt. Ltd. …. Petitioner Represented by Adv.– Mr. P.R. Barik, Advocate -versus- M/s. ABC Trans Carries Pvt. Ltd. …. Opposite Party Mr. Jagabandhu Sahoo, Senior Advocate CORAM: HON’ BLE THE CHIEF JUSTICE Order No.
Decision
ORDER 15.05.2025 02. 1. This is an application under Section 11 (6) of the Arbitration and Conciliation Act, 1996 at the behest of the petitioner for appointment of an arbitrator in terms of the arbitration agreement entered into between the parties on 25th September, 2020. 2. Undeniably, the parties to the proceedings entered into a consortium agreement on 25th September, 2020 for participating into a tender floated by M/s. National Aluminium Company Limited (NALCO) for piling works in 5th Stream Alumina Refinery at Damanjodi, Odisha and post facilities at Vishakapatnam, Andhra Pradesh. The said agreement contains an Page 1 of 7 arbitration clause where the parties have agreed to resolve their disputes and differences arising among them regarding the said consortium agreement through an arbitral process to be conducted in accordance with the Arbitration and Conciliation Act, 1996. Clause 14 of the said agreement postulates that the parties to the agreement shall be entitled to share the payments received from NALCO according to work executed by them respectively, without any further reference to the said company. 3. The dispute arose when the demand was raised by the petitioner in terms of the said consortium agreement dated 25th September, 2020, which was denied by the opposite party. The opposite party took a defence that in absence of any stipulation in the said agreement on the percentage of shares, the claim is untenable. It is further contended that the disputes so raised in a notice under Section 21 of the said Act is outside the purview of the arbitration agreement meaning thereby it does not come within the folds of Clause 25 of the said agreement. 4. Primarily, on the aforesaid two counts, the claim of the petitioner was rejected and the opposite party refused to nominate Page 2 of 7 any arbitrator nor concurs the name of the arbitrator suggested in the said notice. 5. Before we proceed to decide whether the defence taken by the opposite party is a justiciable defence in relation to Section 11 of the said Act, it would be apposite to quote Clause 25 of the said agreement containing an arbitration clause. “25. All disputes or difference what so ever arising among the parties regarding this consortium agreement, shall be settled by arbitration, in accordance with arbitration and conciliation Act, 1996. The Arbitral Tribunal shall consist of a sole arbitrator who shall be nominated and appointed by the CMD of theleader 1st party on the request of either party to this consortium agreement. Since the contract work tender has been invited / floated by M/s NALCO, Bhubaneswar, the Venue of arbitration shall also be at the nearby places of Bhubaneswar in the District of Khordha, with the consent of the parties, the arbitrator may hold sittings at any other place other than the venue agreed for, for the convenience of the parties.” 6. On the manifest reading of the said Clause, it is evidently clear that all disputes or the differences arising amongst the parties Page 3 of 7 with regard to the said consortium agreement are agreed to be resolved through a private forum by appointing an arbitrator. What is sine qua non to invocation of Section 11 of the said Act is that the dispute must fall within the folds of the arbitration agreement/Clause as any dispute which is outside the peripheral of the said arbitration agreement ordinarily cannot be directed to be resolved through arbitration. 7. The first and foremost duty of the Court while appointing an arbitrator is to ascertain the nature of the dispute raised by either of the parties to the contract and such dispute is amenable to be decided through an arbitral process. The conjoint reading of the several Clauses contained in the said consortium agreement is indicative of the fact that the parties hereto have agreed to participate in the tender process as may be floated by the NALCO and shall share the payment so received in accordance with the work executed by them. Clause 24 of the said agreement postulates that any matter which is not stipulated or covered under the said consortium agreement shall be settled in good faith upon meaningful discussions by the parties. The aforesaid Clause is projected affront by the opposite party to take a stand that the Page 4 of 7 dispute so raised is not stipulated in the agreement and, therefore, cannot come within Clause 25 of the said agreement. 8. It is beyond cavil of doubt that the arbitral tribunal is competent to interpret various clauses of an agreement and by virtue of Section 16 of the said Act may also rule its jurisdiction, if raised by the parties. Whether the dispute so raised is within the four corners of the said agreement or beyond it, can be decided by the arbitral tribunal to which this Court do not find any fetter being put in any of the provisions contained under the said Act. Whether the percentage which is conspicuously absent in the said agreement to be shared by the parties on the receivables from the NALCO would make the dispute outside the purview of the arbitral tribunal, when in an earlier clause, the parties have agreed to share such receivables from the said NALCO. It requires harmonization of the different clauses of the said agreement in order to ascertain the nature of the dispute, whether it comes within the four corners thereof or beyond it. 9. The limited scope under Section 11 of the said Act is quite distinct that the Court must restrict its scrutiny on the validity of an agreement. The dispute having raised which prima facie appears to Page 5 of 7 have arisen between the parties in relation to the said agreement and the claim is made strictly in terms of the said agreement, which does not require any roving inquiry or an evidence to be gone into. As this Court finds that it involves an interpretation of the different clauses and the evidence to be laid in order to gather the intention of the parties at the time of executing the contract, such dispute must be referred to an arbitral tribunal for its decision. However, this Court makes it clear that it would be open to the arbitral tribunal to rule its own jurisdiction irrespective of the fact that it is constituted in exercise of power under Section 11 of the said Act. This Court finds that it is a fit case where the dispute raised by the petitioner should be adjudicated through arbitration. 10. This Court, therefore, appoints Mr. Justice Biswajit Mohanty, former Judge of this Court as a sole Arbitrator, who shall enter reference immediately upon communication of the instant order and determine the dispute raised by the parties. The arbitration shall take place under the aegis of the High Court of Orissa Arbitration Centre. Remuneration of the Arbitrator shall be equally paid by the parties as per the 4th Schedule appended to the Page 6 of 7 said Act. The Arbitrator shall make efforts to adhere the time limit set forth in Section 29A of the said Act. 11. This arbitration petition is thus disposed of. Chief Justice (Harish Tandon) S.K. Guin/PA Signature Not Verified Digitally Signed Signed by: SUBASH KUMAR GUIN Designation: Personal Assistant Reason: Authentication Location: High Court of Orissa, Cuttack Date: 16-May-2025 19:40:52 Page 7 of 7