Neelam Jute (P) Ltd., Rep.By Its Chief Executive Officer, Mr.Vijay Kant v. The Tamil Nadu Civil Supplies Corporation Ltd. (Tncsc)

IN THE HIGH COURT OF JUDICATURE AT MADRAS

DATED: 09.11.2022

CORAM

THE HONOURABLE MR.JUSTICE SENTHILKUMAR RAMAMOORTHY Neelam Jute (P) Ltd Rep. by its Chief Executive Officer, Mr.Vijay Kant, One way Traffic Road, Srikulam, Andhra Pradesh - 532 001. ... Petitioner vs.

The Tamil Nadu Civil Supplies Corporation Ltd. (TNCSC), Rep. by its General Manager(Business), No.12, Thambusamy Road, Kilpauk, Chennai - 600 010.

... Respondent PRAYER: Arbitration Original Petition filed under Section 11(6) of the Arbitration and Conciliation Act, 1996, pleased to appoint an arbitrator to resolve the dispute between the petitioner and the respondent arising out of the agreement dated 23.10.2020.

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For Petitioner : Mrs.Tamilselvi for Mr.M.Santhanaraman For Respondent : Mrs.D.Hymavathi

O R D E R

The petitioner seeks the constitution of an arbitral tribunal to adjudicate the dispute arising out of the Agreement dated 23.10.2020 for the supply of 5 ply jute twine. Upon disputes arising between the parties, the petitioner initially issued a representation dated 08.03.2022. Since the said representation did not elicit the expected response, the petitioner issued a notice under Section 21 of the Arbitration and Conciliation Act,1996(the Arbitration Act) on 16.05.2022. In such notice, the petitioner alleged that the respondent had erroneously withheld a sum of Rs.24,67,482/- towards liquidated damages. The said notice was received by the respondent, but not replied to. The present petition is filed in the said facts and circumstances.

2. Learned counsel for the respondent submits, on instructions, that 2/7

the goods were supplied belatedly by the petitioner. Therefore, liquidated damages were imposed in accordance with the contract. As regards the failure to provide a panel of arbitrators to the petitioner upon receipt of the Section 21 notice, it is submitted that the respondent does not have a panel of arbitrators at this juncture, and that such panel is under preparation.

3. The admitted position is that clause 20 of the Agreement provides for the resolution of disputes by arbitration. The said clause is set out below:

''20. (i) It is mutually agreed that in the case of any dispute arising out of any of the terms and conditions of this agreement including interpretation of any of the clauses of the tender or the agreement to be executed, the matter shall be referred by the Corporation / supplier to an Arbitrator who shall be selected by the party from the panel of the Arbitrators approved by the Board of Directors of TNCSC and communicate the same within 15 days from the date 3/7

of receipt of the letter from the Corporation along with the panel of the Arbitrators. If there is no reply from the supplier within 15 days, Corporation shall choose any one of the Arbitrator from the panel of Arbitrators referred to above at its choice. The remuneration for the Arbitrator and other expenses shall be shared equally borne by the purchaser and the supplier.''

4. As per the said clause, the respondent is required to provide a panel of arbitrators approved by the Board of Directors of the respondent to the petitioner upon receipt of a request from the petitioner for arbitration. In this case, the Section 21 notice was issued on 16.05.2022 and received by the respondent on 20.05.2022. As on the date of filing of this petition, the respondent did not communicate the panel of arbitrators. Therefore, the petitioner is entitled to succeed.

5. For the reasons set out above, Arb.O.P.(Comm.Div.)No.471 of 4/7

2022 is allowed by appointing Mr.K.Ashok Kumar, Advocate, New No.38, Old No.49, Padmanatha Nagar, 4th Street, Adyar, Chennai - 600 020, Mobile No.94449 58093, as the sole arbitrator. The sole arbitrator is called upon to enter upon reference and adjudicate the dispute. The fees and expenses in relation to the arbitral proceedings may be fixed by the arbitral tribunal in consultation with the parties. 09.11.2022 Index : Yes / No Internet : Yes / No rrg 5/7

SENTHILKUMAR RAMAMOORTHY,J rrg 6/7

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