Mr. D.Adhithan v. Mr.D.Vishvanathan, Aged About 41 Years,
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Dated : 26.08.2022
CORAM
THE HONOURABLE Mr.JUSTICE M.SUNDAR D.Adhithan ... Petitioner Vs 1.D.Vishvanathan 2.Vaithianathan 3.T.Rajaram 4.Thilagavathi ... Respondents Arbitration Original Petition filed under Section 11(5) of the Arbitration and Conciliation Act, 1996 praying (a) to appoint an sole Arbitrator to adjudicate the dispute between the petitioner and the respondents in terms of the arbitration agreement dated 16.03.2017; (b) to award the costs of the petition; and (c) to pass such further or other orders as this Court deems fit and proper in the circumstances of the case. 1/11
For Petitioner :
Ms.L.Karthiga For Respondents :
Mr.V.Vadivel for R2 Ms.A.Mary for R3 Mr.M.Jaishingh for Mr.P.Jayachandran for R4 R1 - No appearance
O R D E R
This order will now dispose of the captioned matter.
2. This order has to be read in conjunction with and in continuation of earlier proceedings made in the first listing on 08.06.2022 a scanned reproduction of which is as follows :
2/11
3/11
3. Aforementioned proceedings shall now be read as an integral part and parcel of this order. This also means that the abbreviations, short forms used therein will continue to be used in this order also for the sake of convenience and clarity.
4/11
4. Post aforementioned 08.06.2022 order, as there was difficulty in completing service, the matter was placed before learned Master and service qua all four respondents is now complete.
5. Ms.L.Karthiga, learned counsel for the sole petitioner, Mr.V.Vadivel, learned counsel for second respondent, Ms.A.Mary, learned counsel for third respondent and Mr.M.Jaisingh for Mr.P.Jayachandran, learned counsel for fourth respondent are before this Court.
6. To be noted, as regards the first respondent, service has been duly effected, name of first respondent together with full/complete address as in the long and short cause titles of the captioned Arb.OP is shown in the cause list but there is no representation. Name of the first respondent called out aloud thrice in the Court and in the adjoining corridors but no response. This Court is informed that first respondent has not chosen to enter appearance through any counsel.
7. In the aforesaid backdrop, learned counsel for respondents 2 to 4 submit in one voice that they do not dispute the existence of arbitration agreement, i.e., clause 17 of primary contract.
8. As would be evident from the narrative thus far, first respondent has not chosen to come before this Court and enter upon any disputation 5/11
regarding existence of arbitration agreement. This makes the task of disposal of captioned Arb.OP fairly simple.
9. A legal drill under Section 11 of A and C Act should perambulate within the statutory perimeter sketched by sub-section (6A) thereat which reads as follows :
'(6A) The Supreme Court or, as the case may be, the High Court, while considering any application under subsection (4) or sub-section (5) or sub-section (6), shall, notwithstanding any judgment, decree or order of any Court, confine to the examination of the existence of an arbitration agreement.'
10. Aforementioned sub-section (6A) of Section 11 of A and C Act came up for consideration in oft quoted judgment of Hon'ble Supreme Court in Mayavati Trading Pvt. Ltd vs Pradyuat Deb Burman reported in (2019) 8 SCC 714, relevant paragraph is paragraph No.10 and the same reads as follows:
'10. This being the position, it is clear that the law prior to the 2015 Amendment that has been laid down by this Court, which would have included going into whether accord and satisfaction has taken place, has now been legislatively overruled. This being the position, it is difficult to agree with the reasoning contained in the aforesaid judgement, as Section 6/11
11(6-A) is confined to the examination of the existence of an arbitration agreement and is to be understood in the narrow sense as has been laid down in the judgement in Duro Felguera'
11. Aforementioned paragraph No.10 of Mayavati Trading case law takes us to Duro Felguera principle being ratio laid down by Hon'ble Supreme Court in Duro Felguera S.A. Vs Gangavaram Port Limited reported in 2017 (9) SCC 729, relevant paragraphs in Duro Felguera case are paragraph Nos.47 and 59 and the same reads as follows: '47. What is the effect of the change introduced by the Arbitration and Conciliation (Amendment) Act, 2015 (hereinafter referred to as "the 2015 Amendment") with particular reference to Section 11(6) and the newly added Section 11(6-A) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as "the 1996 Act") is the crucial question arising for consideration in this case.
59. The scope of the power under Section 11(6) of the 1996 Act was considerably wide in view of the decisions in SBP and Co. and Boghara Polyfab. This position continued till the amendment brought about in 2015. After the amendment, all that the Courts need to see is whether an arbitration agreement exists - nothing more, nothing less. The legislative policy and purpose is essentially to minimize the Courts intervention at the stage of appointing the arbitrator and this 7/11
intention as incorporated in Section 11(6-A) ought to be respected.'
12. Other facets of a Section 11 legal drill put in place by judicial pronouncements namely N.N.Global and Nortel principles do not come up for consideration in the case on hand as the same has not been raised by the respondents. To be noted, for completion of narrative, it is deemed appropriate to say that N.N.Global principle is ratio laid down by Hon'ble Supreme Court in N.N.Global Mercantile Pvt. Ltd., Vs. Indo Unique Flame Ltd., and others reported in 2021 SCC Online SC 13 and that turns on issue of arbitration agreement between the parties being in the form of a clause/covenant in a contract and a plea that the agreement is unstamped/ insufficiently stamped and/or not registered though compulsorily registrable. Likewise, Nortel principle is ratio laid down by Hon'ble Supreme Court in i.e., Bharat Sanchar Nigam Limited and another Vs. Nortel Networks India Private Limited reported in (2021) 5 SCC 738, which turns on a plea of lis being ex facie barred by limitation. It is not necessary to deal with these aspects as the same do not arise in the case on hand.
13. Before writing the concluding paragraph / operative portion of the order, it is deemed appropriate for the purpose of specificity to clarify that 8/11
the stated position of the respondents is only with regard to existence of the arbitration agreement and there is no consent or concession qua lis. For further clarity, it is deemed appropriate to set out that all questions and all arbitrable disputes are left open for being decided by the Hon'ble Arbitrator to be appointed infra. To put it differently, all rights and contentions of the parties are left open.
14. In the light of narrative thus far, Hon'ble Mr.Justice K.Venkataraman (Retd.,), a former Judge of this Court, residing at 'L-Block', No.125, East Anna Nagar, Chennai- 600 102. [Mobile No.: 7708895435] is appointed as sole Arbitrator. Hon'ble Arbitrator is requested to enter upon reference qua primary contract i.e., partnership deed dated 16.03.2017 between petitioner and respondents, adjudicate upon the arbitrable disputes that have arisen between the parties by holding sittings in the 'Madras High Court Arbitration Centre under the aegis of this Court' (MHCAC) and render an award by adopting the Madras High Court Arbitration Proceedings Rules 2017 and Hon'ble Arbitrator's fee shall be as per Madras High Court Arbitration Centre (MHCAC) (Administrative Cost and Arbitrator's Fees) Rules 2017.
9/11
15. Captioned Arb.OP is disposed of in aforesaid manner. There shall be no order as to costs.
26.08.2022 Index : Yes / No Speaking order / Non-speaking order ds Note: Registry is directed to communicate a copy of this order forthwith to 1.The Hon'ble Justice Mr.K.Venkataraman (Retd., Former Judge of Madras High Court L-Block, No.125, East Anna Nagar Chennai - 600 102.
[Mobile No.: 77088-95435].
2.The Director Tamil Nadu Mediation and Conciliation Centre cum - Ex Officio Member Madras High Court Arbitration Centre Madras High Court, Chennai - 600 104.
10/11
M.SUNDAR. J., ds 26.08.2022 11/11