IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 27TH DAY OF AUGUST, 2018

BEFORE

THE HON' BLE MR. JUSTICE B. VEERAPPA

CIVIL MISCELLANEOUS PETITION No.57/2018

BETWEEN:

M/S TOWNSHIP PROMOTERS

A REGISTERED PARTNERSHIP FIRM

HAVING ITS OFFICE AT:

NO.10/1, LAKSHMINARAYAN COMPLEX,

PALACE ROAD, BENGALURU-560052.

REPRESENTED BY ITS MANAGING PARTNER,

MR. ASHWIN PAI,

... PETITIONER

(BY SRI SRINIVASA RAGHAVAN, ADVOCATE A/W

SRI NIKHILESH RAO M., ADVOCATE)

AND:

M/S MANTRI PROMOTERS,

A REGISTERED PARTNERSHIP FIRM,

HAVING ITS OFFICE AT: MANTRI HOUSE,

NO.41, VITTAL MALLYA ROAD,

BENGALURU-560 001.

REPRESENTED BY ITS MANAGING PARTNER,

... RESPONDENT

(BY SRI SURAJ GOVINDARAJ, ADVOCATE)

R

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THIS CMP IS FILED UNDER SECTION 11(6) OF THE

ARBITRATION AND CONCILIATION ACT 1996, PRAYING TO

APPOINT FORMER JUDGE OF THIS COURT AS THE SOLE

ARBITRATOR TO ADJUDICATE THE DISPUTES BETWEEN

THE PARTIES, IN TERMS OF CLAUSE 25 OF THE JOINT

DEVELOPMENT AGREEMENT DATED: 30.03.2009 OR IN THE

ALTERNATIVE APPONT ANY OTHER RETIRED JUDGE OF

THE HON’BLE SUPREME COURT OF INDIA AS THE SOLE

ARBITRATOR TO ADJUDICATE THE DISPUTES BETWEEN

THE PARTIES, IN TERMS OF CLAUSE 25 OF THE JOINT

DEVELOPMENT AGREEMENT DATED 30.3.2009.

THIS CMP HAVING BEEN HEARD AND RESERVED FOR

ORDERS, COMING ON FOR PRONOUNCEMENT OF ORDER

THIS DAY, THE COURT MADE THE FOLLOWING:

O R D E R

The petitioner filed the present Civil Miscellaneous

Petition under the provisions of Section 11(6) of the

Arbitration and Conciliation Act, 1996 (‘the Act’ for short)

for appointment of the sole Arbitrator to adjudicate the

disputes between the parties, in terms of Clause-25 of the

Joint Development Agreement (‘JDA’ for short) dated

30.3.2009 entered into between the parties as per

Annexure-H.

3

I. FACTS OF THE CASE

2. It is the case of the petitioner that in the year

2004, Mantri Developers Private Limited entered into

Memorandum of Understanding (‘MoU’) with the petitioner

for development of the schedule property excluding Sy. No.

1B at Jakkur Plantation Village, Yelahanka Hobli, Bangalore

North Taluk, Bangalore. However, Mantri Developers

Private Limited was unable to implement the terms of the

MoU and failed to commence the development of the

property. On 9.1.2006 M/s Abhishek Developers, a

partnership firm and a sister concern of Mantri Developers

Private Limited entered into a Joint Development

Agreement (‘JDA’ for short) dated 09.01.2006 and General

Power of Attorney dated 09.01.2006 for the development of

the schedule property excluding Sy. No.1B at Jakkur

Plantation Village, Yelahanka Hobli, Bangalore North Taluk,

Bangalore. The said partnership firm and the petitioner

entered into a registered Supplemental JDA dated

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14.12.2006 and power of Attorney dated 14.12.2006,

wherein Survey No.1B, Block 41 situated at Jakkur

Plantation Village, Yelahanka Hobli, Bangalore North Taluk,

ad measuring 1 Acre was included for development.

3. It is further case of the petitioner that the said

Abhishek Developers failed to commence development work

within six months of execution of the 2006 JDA and the

2006 Supplemental JDA as stipulated in the said

agreements. Therefore the petitioner issued a letter on

2.6.2008 to Abhishek Partnership firm rejecting the

untenable reasons assigned by the said firm for the delay in

commencement of development work and brought to the

notice of the said firm that delay has resulted in adverse

financial implications upon the petitioner. Considering the

failure in commencing the development of the Schedule

property, the petitioner was constrained to revoke the

Powers of Attorney dated 09.01.2006 and 14.12.2006 as

per Deed of Revocation dated 20.06.2008.

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4. It is further contended that considering the

subsequent representations of M/s Abhishek Developers

that they were capable of executing the development of the

Schedule Property as envisaged, the petitioner entered into

a Supplemental JDA dated 26.12.2008 and power of

Attorney dated 26.12.2008 with the said firm for

development of the Schedule Property. Inspite of the

same, the said firm failed to commence development of

the Schedule Property in accordance with the terms of the

Supplemental JDA dated 26.12.2008. Thereafter, M/s

Abhishek Developers requested that it be permitted to

nominate its affiliate, the respondent herein, to develop the

Schedule Property, to which the Petitioner acceded.

Accordingly, the petitioner and respondent entered into a

JDA dated 30.03.2009 for development of the schedule

property. As per the terms of the JDA dated 30.3.2009, the

Respondent has to complete development of the schedule

property and obtain completion certificate within 3 years

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from 26.12.2008 i.e., by 26.12.2011. The Respondent

failed to commence the development of the Schedule

Property within the stipulated time stated supra and from

6.1.2012 to 21.12.2012 the respondent illegally created an

equitable mortgage by way of deposit of title deeds of the

Schedule Property with Indian Overseas Bank for

Rs.100,00,00,000/- (Rupees One Hundred Crores) as per

Memorandum of Deposit of Title Deeds dated 21.01.2012

(’Mortgage Deed’). The Credit Sanction letter dated

06.01.2012 issued by the bank for the said mortgage

evidences that the monies from the mortgage were diverted

to the Respondent’s sister concern i.e., M/s Mantri

Developers Private Limited and utilized for development of

alternate projects. The petitioner issued number of letters

to the respondent in the year 2004 bringing to its attention

the delay in completing the development of the schedule

property. On 19.5.2017 the petitioner addressed a

detailed letter to the Respondent bringing to its attention

7

the history of the transaction and its failure to develop the

Schedule Property as envisaged in terms of JDA dated

30.3.2009 and calling upon them to complete the project

within 12 months from the date of the letter. On the same

day, the respondent gave its reply giving untenable reasons

for its failure to develop the Schedule Property till date and

did not mention whether it would execute the development

within the time stipulated in the petitioner’s letter.

5. It is further case of the petitioner that on 7.6.2017

it issued one more letter bringing to the notice of the

respondent illegal mortgage of the Schedule Property and

sought an explanation for the same. On the same day, the

respondent gave reply providing untenable explanations for

its illegal activities. Therefore the petitioner was

constrained to file A.A.No.368/2017 on 12.10.2017 before

the City Civil Court, Bengaluru seeking an ad interim order

of injunction against the respondent. The trial Court

granted an ad interim order of injunction on the same day

8

and the same continued to be in force. Thereafter on

29.12.2017 the Petitioner issued arbitral legal notice for

appointment of Arbitrator under Clause 25 of the JDA dated

30.3.2009 entered into between the parties. On 11.1.2018,

the respondent issued untenable reply denying the

petitioner’s claims. Hence the petitioner is before this

Court for the reliefs sought for.

II. OBJECTIONS FILED BY THE RESPONDENT

6. The respondent filed the statement of objections

mainly contending that the petition is not maintainable and

the petitioner has wantonly mis-described the respondent -

Mantri Promoters, which is now a company registered under

the Indian Companies Act and operates under the name

and style of Jakkur Promoters Private Limited (‘JPPL’ for

short) and the array of parties being wrong, the petition is

liable to be dismissed for mis-joinder of parties. It is further

contended that there are criminal proceedings pending

9

between the parties. Further, the clause relied upon by the

petitioner provides for a panel of arbitrators contrary to the

claim of the petitioner for a sole Arbitrator. The respondent

further contended that the agreement between the parties

continued to be in force and the petitioner is abusing the

process of law and Courts to pressurize JPPL. The petitioner

has suppressed the material facts. It is further contended

that M/s Mantri Promoters does no longer exist as a

partnership firm as described in the cause title of the

petition and knowing fully well that Mantri Promoters now

being Jakkur Promoters Private Limited, in terms of the

letter dated 12.10.2017, still the petitioner impleaded the

Mantri Promoters. It is further contended that the Mantri

Promoters has been registered under the Companies Act,

now known as Jakkur Promoters Private Limited. Therefore

the petition against Mantri Promoters is not maintainable.

In fact in the reply to the notice nominating an arbitrator,

JPPL by its letter dated 11.1.2018 had categorically stated

10

about registration of Mantri Promoters as Jakkur Promoters

Private Limited and inspite of which, the present petition

has been filed against the Mantri Promoters and the same is

not maintainable. Therefore respondent sought for

dismissal of the petition.

III. ARGUMENTS ADVANCED BY THE

LEARNED COUNSEL FOR THE PARTIES

7. I have heard the learned counsel for the parties to

the lis.

8. Sri Srinivasa Raghavan, learned counsel for the

petitioner reiterating the averments made in the petition

contended that the existence of the JDA dated 30.3.2009

and existence of the Arbitration Clause i.e, Clause-25 in the

JDA is not in dispute. The petitioner issued legal notice as

contemplated under the provisions of Section 11(5) of the

Act. He would further contend that even the respondent

filed Criminal Petition No.8203/2017 under Section 482 of

11

the Code of Criminal Procedure in the name of ‘M/s Mantri

Promoters’ against the petitioner in the month of October-

2017. He also contended that in the reply dated 11.1.2018

given by the respondent to the notice issued by the

petitioner, the respondent has not taken any contention

with regard to fraud and also not arbitrable. Therefore the

petitioner is entitled to the relief sought for in the petition.

9. In support of his contentions, the learned counsel

for the petitioner has relied upon the following judgments:

1. (2017)9 SCC 729 {DURO FELGUERA S.A. v.

GANGAVARAM PORT LTD., … Paragraphs 14, 17, 18,

19, 48 and 59}.

2. (2009)7 SCC 545 {SIME DARBY ENGINEERING SDN.

BHD vs. ENGINEERS INDIA LIMITED … paragraphs 23,

24, 26 and 27.

3. Judgment of the High Court of Delhi in Arbitration

Petition No.22/2016 decided on 19.10.2016

{PICASSO DIGITAL MEDIA PVT. LTD., vs. PICK-A-

12

CENT CONSULTANCY SERVICE PVT. LTD…. paragraphs

4 and 5 }

4. Judgment of the High Court of Bombay in Arbitration

Petition No.9/2015 decided on 10.1.2018 {PADMINI

CHANDRAN MENON vs. VIJAY CHANDRAN MENON

AND OTHERS … paragraphs 24, 29, 46 and 48}

10. Per contra, Sri Suraj Govindraraj, learned counsel

for the respondent reiterating the averments made in the

statement of objections contended that the petitioner has

not followed the procedure as contemplated under the

provisions of Section 11(5) of the Act by issuing arbitral

legal notice to the JPPL. He would further contend that

under Clause-25 of the JDA dated 30.3.2009, the dispute

has to be referred to the Arbitral Tribunal and therefore the

sole Arbitrator cannot be appointed. Further, there are

serious allegations of fraud. Therefore the petitioner is not

entitled to any relief before this Court under the provisions

of Section 11(6) of the Act.

13

11. In support of his contentions, the learned counsel

for the respondent has relied upon the following

Judgments:

1. (2010)1 SCC 72 {N. RADHAKRISHNAN vs. MAESTRO

ENGINEERS AND OTHERS}

2. (2016)10 SCC 386 {A. AYYASAMY vs. A.

PARAMASIVAM AND OTHERS}

3. (2017)10 SCC 706 { HIMANGNI ENTERPRISES vs.

KAMALJEET SINGH AHLUWALIA}

4. (2011)5 SCC 532 {BOOZ ALLEN AND HAMILTON INC.

vs. SBI HOME FINANCE LIMITED AND OTHERS}

5. 2018 SCC OnLine SC 487 {AMEET LALCHAND SHAH

AND OTHERS vs. RISHABH ENTERPRISES AND

ANOTHER}

6. Judgment of the High Court of Delhi in 2017 SCC

OnLine Del. 11036 {M/s KR IMPEX vs. M/s PUNJ

LIOYD LIMITED}

IV. POINT FOR CONSIDERATION

12. In view of the aforesaid rival contentions urged

by the learned counsel for the parties, the only point that

14

arises for consideration in the present Civil Miscellaneous

Petition is:

Whether the petitioner has made out a

case to refer the matter for arbitration under the

provisions of Section 11(6) of the Arbitration and

Conciliation Act, 1996?

V. CLAUSE-25 OF THE JDA DATED 30.3.2009

13. It is the specific case of the petitioner that the

petitioner and the respondent have entered into JDA dated

30.3.2009. Clause 25 of the said JDA reads as under:

25. ARBITRATION: The parties hereto agree that in the event of

there being any disputes with regards to this

Agreement or interpretation of any of the terms

Agreement, the same shall be referred to the

Arbitration in terms hereof:

Arbitration shall be conducted as follows:

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a) All proceedings in any arbitration shall be

conducted in English;

b) The arbitration award shall be final and

binding on the parties, and the Parties agree

to be bound thereby and to act accordingly;

c) The arbitral tribunal may by unanimous

agreement, award to a party that

substantially prevails on the merits its costs

and reasonable expenses (including

reasonable fees of its counsel;

d) Seat of such arbitration tribunal shall be at

Bangalore;

e) The Arbitration Proceedings shall be

governed by the Arbitration and Conciliation

Act, 1996.

VI. REGARDING COMPLIANCE OF SECTION

11(5) OF THE ACT

14. It is not in dispute that the parties to the JDA i.e.,

the petitioner, respondent and M/s Abhishek Developers,

the authorized signatory of the respondent have duly

signed the said registered document as contemplated under

16

the provisions of Section-7 of the Act. The respondent filed

objections and seriously contended that the petitioner has

not followed the procedure by issuing the legal notice to the

JPPL knowing fully well that the respondent – M/s Mantri

Promoters operates under the name and style of JPPL. The

same cannot be accepted on going through the reply dated

11.1.2018 issued by the respondent himself to the

petitioner’s notice. At the top of the reply dated 11.1.2018,

it is mentioned as “mantri” and at the bottom of the reply

notice it is mentioned as “Jakkur Promoters Pvt. Ltd., CIN:

U70100KA2017PTC1058212; Mantri House, 41, Vittal

Mallya Road, Bangalore-560 001”. Further in the reply, it

is stated that “Even the present notice has been addressed

to the said non-existent “Mantri Promoters”. However,

since it has been received at our address and we are

concerned with the subject matter of the notice we are

addressing this reply lest it be contended that no reply has

been issued”. In the reply, it is also stated that “a perusal

17

of clause 25(c) which requires an award to be passed by

unanimous agreement, which essentially means, indicates

and establishes that the tribunal shall comprise of more

than one arbitrator. The interpretation now sought to be

given by your client that the arbitration is by sole arbitrator

is one more example of the long line of wrong interpretation

given by your client and contentions raised by your client”.

It is also stated in the reply that at the most, the petitioner

can nominate one person as its nominee arbitrator and not

as a sole Arbitrator. Therefore it clearly indicates that the

petitioner has complied the provisions of Section 11(5) of

the Act.

15. It is also relevant to state at this stage that the

very respondent – M/s Mantri Promoters now known as M/s

‘Jakkur Promoters Private Limited’ filed Criminal Petition

NO.8203/2017 in the month of October-2017 against the

present petitioner and the State under Section 482 of Code

of Criminal Procedure and has given its address as “ Mantri

18

House, No.41, Vittal Mallya Road, Bangalore-560001,

represented by its Authorized Signatory Mr. Ravishankar

B.S. That is the address given in the present Petition.

Therefore the contention of the learned counsel for the

respondent that the petitioner has not complied the

provisions of Section 11(5) of the Act against the JPPL,

cannot be accepted.

VII. REGARDING ALLEGATIONS OF FRAUD AND

EXISTENCE OF ARBITRATION CLAUSE

16. Insofar as the contention raised by the learned

counsel for the respondent that there are serious

allegations of fraud and the dispute cannot be referred to

arbitration, the same cannot be accepted in view of the fact

that very respondent in the affidavit filed in support of the

application under Section 9 r/w Section 151 of the Code of

Civil Procedure to vacate the interim order passed by the

19

trial Court in Arbitration Application No.368/2017, has

specifically stated at paragraphs 13 and 14 as under:

13. I say and submit and during the subsistence

of the JDA and the PoA, none of the actions

authorized under the JDA and PoA can be

curtailed by the Petitioner. Admittedly, all the

allegations made by the petitioner are required

to be adjudicated by the arbitral tribunal to be

appointed. This Hon’ble Court is only concerned

as regards protecting the subject matter of the

agreement which contains the arbitral clause.

With respect, it is submitted that the subject

matter of the JDA is development of the

schedule property and sale/lease of the

development which would include alienating,

disposing, dealing with, encumbering or parting

with or creating any third party rights including

but not limited to an agreement of sale, sale

deed, mortgage, deed, charge, encumbrance

etc., There cannot be an injunction sought for by

one of the parties to the JDA which goes against

the subject matter of the JDA. Hence, the ex

20

parte injunction order obtained by the Petitioner

being contrary to the terms of the JDA/PoA is

required to be vacated.

14. In view of the injunction order being

contrary to the JDA it is required to be vacated

to enable the Respondent to act in terms of the

JDA. The vacating of the ex parte order of

injunction will not cause any loss, harm, injury

or injustice to the Petitioner. All the disputes and

matters which have been raised by the Petitioner

are disputed by the Respondent and can only be

adjudicated during the trial by the Arbitral

Tribunal yet to be appointed and cannot be done

so in a summary proceedings of the present

nature.

17. On careful perusal of the above averments made

by the respondent in the affidavit filed in support of the

application for vacating the interim order passed in AA

No.368/2017, it clearly depicts that the respondent has

21

admitted in categorical terms that all the allegations made

by the petitioner are required to be adjudicated by the

arbitral tribunal to be appointed and all the disputes and

matters which have been raised by the petitioner are

disputed by the respondent and can only be adjudicated

during the trial by the Arbitral Tribunal yet to be appointed

and cannot be done so in a summary proceedings of the

present nature. Therefore primafacie the respondent has

admitted the existence of arbitration clause i.e, Clause 25 in

the JDA dated 30.3.2009 entered into between the parties.

Further, it is also relevant to state that in the reply notice

dated 11.1.2018, the respondent has not taken any

contention with regard to the fraud and that the dispute

cannot be referred to arbitrator. In view of the above, the

contention of the respondent that there are serious

allegations of fraud and the dispute cannot be referred to

arbitration, cannot be accepted.

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VIII. JUDGEMENTS RELIED UPON AND

PROVISIONS OF THE ACT

18. In the judgment relied upon by the learned

counsel for the respondent in the case of Radhakrishna

cited supra, the Hon’ble Supreme Court considered the

provisions of Sections 5,8 and 27 of the Act and the facts of

the said case and the facts of the present case are entirely

different and the said judgment is not applicable to the

present case. The judgment relied upon by the learned

counsel for the respondent in the case of N. Radhakrishnan

has been considered by the Hon’ble Supreme Court in the

case of A. AYYASAMY vs. A. PARAMASIVAM AND OTHERS

{(2016)10 SCC 386), wherein at paragraph-18, it is held as

under:

18. When the case involves serious allegations of

fraud, the dicta contained in the aforesaid

judgments would be understandable. However,

at the same time, mere allegation of fraud in the

23

pleadings by one party against the other cannot

be a ground to hold that the matter is incapable

of settlement by arbitration and should be

decided by the civil court. The allegations of

fraud should be such that not only these

allegations are serious that in normal course

these may even constitute criminal offence, they

are also complex in nature and the decision on

these issues demand extensive evidence for

which civil court should appear to be more

appropriate forum than the Arbitral Tribunal.

Otherwise, it may become a convenient mode of

avoiding the process of arbitration by simply

using the device of making allegations of fraud

and pleading that issue of fraud needs to be

decided by the civil court. The judgment in N.

Radhakrishnan does not touch upon this aspect

and said decision is rendered after finding that

allegations of fraud were of serious nature.

19. It is also relevant to state at this stage that the

Hon’ble Supreme Court while considering the nature and

scope of Sections 11 and 8 of the Act in the case of BOOZ

24

ALLEN AND HAMILTON INC. vs. SBI HOME FINANCE

LIMITED AND OTHERS reported in (2011)5 SCC 532 has

specifically held at paragraphs 32, 33 and 34 as under:

32. The nature and scope of issues arising for

consideration in an application under section 11

of the Act for appointment of arbitrators, are far

narrower than those arising in an application

under section 8 of the Act, seeking reference of

the parties to a suit to arbitration. While

considering an application under section 11 of

the Act, the Chief Justice or his designate would

not embark upon an examination of the issue of

`arbitrability' or appropriateness of adjudication

by a private forum, once he finds that there was

an arbitration agreement between or among the

parties, and would leave the issue of arbitrability

for the decision of the arbitral Tribunal. If the

arbitrator wrongly holds that the dispute is

arbitrable, the aggrieved party will have to

challenge the award by filing an application

under section 34 of the Act, relying upon sub-

section 2(b)(i) of that section.

25

33. But where the issue of `arbitrability' arises

in the context of an application under section 8

of the Act in a pending suit, all aspects of

arbitrability have to be decided by the court

seized of the suit, and cannot be left to the

decision of the Arbitrator. Even if there is an

arbitration agreement between the parties, and

even if the dispute is covered by the arbitration

agreement, the court where the civil suit is

pending, will refuse an application under Section

8 of the Act, to refer the parties to arbitration, if

the subject matter of the suit is capable of

adjudication only by a public forum or the relief

claimed can only be granted by a special court or

Tribunal.

34. The term `arbitrability' has different

meanings in different contexts. The three facets

of arbitrability, relating to the jurisdiction of the

arbitral tribunal, are as under :

(i) whether the disputes are capable of

adjudication and settlement by arbitration?

That is, whether the disputes, having

26

regard to their nature, could be resolved by

a private forum chosen by the parties (the

arbitral tribunal) or whether they would

exclusively fall within the domain of public

fora (courts).

(ii) Whether the disputes are covered by

the arbitration agreement? That is, whether

the disputes are enumerated or described

in the arbitration agreement as matters to

be decided by arbitration or whether the

disputes fall under the `excepted matters'

excluded from the purview of the

arbitration agreement.

(iii) Whether the parties have referred the

disputes to arbitration? That is, whether

the disputes fall under the scope of the

submission to the arbitral tribunal, or

whether they do not arise out of the

statement of claim and the counter claim

filed before the arbitral tribunal. A dispute,

even if it is capable of being decided by

arbitration and falling within the scope of

27

arbitration agreement, will not be

`arbitrable' if it is not enumerated in the

joint list of disputes referred to arbitration,

or in the absence of such joint list of

disputes, does not form part of the

disputes raised in the pleadings before the

arbitral tribunal.

20. The provisions of sub-section 6A of Section 11 of

the Act after amendment w.e.f 23.10.2015 has brought

substantial changes in the Act. As per the amended

provisions of sub-section 6A of Section 11 of the Act, the

power of the Court is confined only to examine the

existence of an arbitration agreement. Further as per sub-

section (7) of Section 11 of the Act, the decision of

appointment of an arbitrator is made by Hon’ble Supreme

Court or the High Court instead of Chief Justice and no

appeal lies against such decision. The Hon’ble Supreme

Court while considering the provisions of sub-sections 6 and

28

6A of Section 11 of the Act in the case of DURO FELGUERA

S.A. vs. GANGAVARAM PORT LIMITED reported in (2017)9

SCC 729 held at paragraphs 48 and 59 as under:

48. Section 11(6A) added by the 2015

Amendment, reads as follows:

“11(6A) The Supreme Court or, as the

case may be, the High Court, while

considering any application under sub-

section (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.”

From a reading of Section 11(6A), the

intention of the legislature is crystal clear i.e.

the Court should and need only look into one

aspect- the existence of an arbitration

agreement. What are the factors for deciding

as to whether there is an arbitration

agreement is the next question. The

29

resolution to that is simple - it needs to be

seen if the agreement contains a clause which

provides for arbitration pertaining to the

disputes which have arisen between the

parties to the agreement.

59. The scope of the power under Section 11(6)

of the 1996 Act was considerably wide in view

of the decision in SBP and Co. v. Patel Engg. Ltd.

{(2005)8 SCC 618} and National Insurance Co.

Ltd., v. Baghara Polyfab (P) Ltd., {(2009)1 SCC

267}. 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

Court’s intervention at the stage of appointing

the arbitrator and this intention as incorporated

in Section 11(6-A) ought to be respected.

30

IX. REGARDING DEFINITION OF ARBITRAL TRIBUNAL

21. The ‘Arbitral Tribunal’ as defined under Section

2(d) of the Act means “a sole arbitrator or a panel of

arbitrators”. Section 10 of the Act reads as under:

10. Number of arbitrators:- (1) The parties are

free to determine the number of arbitrators,

provided that such number shall not be an even

number. (2) Failing the determination referred

to in sub-section (1), the arbitral tribunal shall

consist of a sole arbitrator.

22. As per Clause 25(c) of the JDA dated 30.3.2009,

the Arbitral Tribunal may by unanimous agreement, award

to a party that substantially prevails on the merits, its

costs and reasonable expenses (including reasonable fees

of its counsel). Admittedly in the present case, there is no

unanimous decision in view of the controversy between the

parties and the arbitration clause 25 of the JDA dated

30.3.2009 is silent as to the number of arbitrators. The said

31

clause read with sub-section 2 of Section 10 of the Act

makes it clear that the Arbitral Tribunal in the instant case

would consist of a sole Arbitrator. My view is fortified by

the Judgment of the Hon’ble Supreme Court in the case of

SIME DARBY ENGINEERING SDN. BHD. vs. ENGINEERS

INDIA LIMITED reported in (2009)7 SCC 545 wherein the

Hon’ble Supreme Court while considering the provisions of

Sections 2(1)(d) and 11 of the Act, held at paragraphs 21

and 23 as under:

21. The Arbitration Tribunal as defined under

Section 2(d) of the Act means "a sole arbitrator

or a panel of arbitrators". Section 10(2) of the

Act is very relevant in order to resolve the

controversy in this case in as much as Section

10(2) makes it very clear where the number of

arbitrator is not determined, the arbitral tribunal

shall consist of a sole arbitrator. In this

connection if UNCITRAL rules are referred the

position will remain the same. UNCITRAL model

law on International Commercial Arbitration also

32

accepts the same definition of Arbitration

Tribunal in Article 2(b). Article 10 of those rules

is almost identical with Section 10 of the said

Act.

23. Section 10 deviates from Article 10 of the

UNCITRAL law only in the sense that Section

10(1) of the Act provides that despite the

freedom given to the parties to determine the

number of arbitrators such numbers shall not be

even number. But in default of determination of

the number, Section 10(2) provides the tribunal

is to consist of a sole arbitrator. Therefore,

scheme of Section 10(2) of the Act is virtually

similar to Article 10.2 of the UNCITRAL model

law.

X. CONCLUSION

23. The material on record clearly depicts that there

is no dispute with regard to existence of JDA dated

30.3.2009 as well as existence of the arbitration clause i.e.,

clause 25 in the said JDA entered into between the parties

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and the petitioner has complied the provisions of Section

11(5) of the Act by issuing the legal notice.

24. For the reasons stated above, the point raised in

the petition has to be answered in the affirmative holding

that the petitioner has made out a case to refer the matter

for arbitration under the provisions of Section 11(6) of the

Arbitration and Conciliation Act, 1996.

25. In view of the above, the Civil Miscellaneous

Petition is allowed. Hon’ble Sri Justice Ashok B.

Hinchigeri, former Judge of this Court is appointed as the

sole Arbitrator to adjudicate the disputes, in terms of

Clause-25 of the Joint Development Agreement dated

30.3.2009 as per Annexure-H entered into between the

parties, in accordance with law.

Registry is directed to send copy of this order to

Hon’ble Sri Justice Ashok B. Hinchigeri, former Judge of this

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Court as well as to the Arbitration Centre for intimation

forthwith.

Sd/-

JUDGE

Gss/-