PUNJAB AND HARYANA HIGH COURT, CHANDIGARH *** Arbitration Case Nos.108 to 100 of 2008 Date of decision: August 21, 2009. *** Transmission Corporation of Andhra Pradesh Ltd. Versus M/S Equipment Conductor Cables Limited. *** CORAM: Hon'ble Mr. Justice T.S.Thakur,CJ *** Present: Shri V.K.Jain, Sr.Advocate, with Shri Pardeep Bhandari,Advocate. Shri Hari Om Attri, Advocate, for respondent No.1. Shri Ajay Gupta, Addl: Advocate General, for the State of Haryana. *** T.S.Thakur, CJ (Oral) In these petitions filed under Section 11 of the Arbitration and Conciliation Act, 1996, the petitioners pray for the appointment of an independent arbitrator for adjudication of the disputes that have arisen between the parties in relation to three different purchase orders placed by the Transmission Corporation with respondent No.1 Company. It is not in dispute that in terms of Section 18 of the Micro, Small and Medium Enterprises Development Act, 2006 reference to the Micro, Small and Medium Enterprises Facilitation Council was made to explore the possibility of a settlement of the outstanding disputes by way of conciliation. It is also not in dispute that one of the issues that was raised before the said Council related to its territorial jurisdiction to entertain the conciliation proceedings. The said issue was it appears argued by both the sides and by an order dated 5.7.2006 decided in the affirmative holding that the Haryana, Micro & Small Enterprise Facilitation Council had -2- Arbitration Case Nos.108 to 100 of 2008 the jurisdiction to entertain conciliation proceedings. Further proceedings before the Council could not however go on because of an interim order of stay passed by this Court in these proceedings on 23.07.2008. A reading of the order of this Court give an impression as though the Council was proceeding with the matter without determining the question of territorial jurisdiction, learned counsel for the respondent argued and in my opinion rightly so that the impression created was not entirely correct in asmuch as the Council had on 5.8.2006 after hearing arguments of both the sides declared that it had the jurisdiction to entertain the council proceedings. The interim order staying further proceedings before the Council was not in that view justified. Learned counsel for the petitioner in all these petitions argued that the conciliation proceedings must be deemed to have failed leaving no option except to look for a suitable Arbitrator to adjudicate upon the disputes between the parties. In support of that submission he placed reliance upon an order passed by the Council on 8.5.2008 in which it is inter alia recorded that one of the parties was not agreeable to any reconciliation. It was submitted that since one of the parties to the disputes was not agreeable to any conciliation, it will be presumed that reconciliation had failed. I do not think so. It is true that one of the parties has shown no inclination to reconcile the outstanding disputes, yet it is equally true that the Council has not so far reported failure of the conciliation proceedings. On the contrary the Council had adjourned the matter to 8.7.2009 obviously in an attempt to make further efforts to bring about a conciliation between the two parties. Even according to learned counsel appearing for the Haryana Micro and Small Enterprise Facilitation Council-respondent No.2 in these petitions no failure report has been submitted by the Council so far and the proceedings can be resumed any time if the order passed by this Court against the said proceedings is vacated. That being so it may be -3- Arbitration Case Nos.108 to 100 of 2008 premature for this Court to assume that the proceedings before the Council have indeed failed to bring about a satisfactory situation. The proper course in my opinion is to give an opportunity to the Facilitation Council to conclude its proceedings expeditiously. Before any resort is taken to the provisions of Section 18 of the Micro, Small and Medium Enterprises Development Act, 2006 read with Section 11 of the Arbitration and Conciliation Act, 1996 for reference of disputes for arbitration. It was then argued on behalf of the respondents that even after the conciliation proceedings are reported to have failed, the Council may itself decide to act as an Arbitrator or refers the disputes for arbitration to any institution or centre providing alternate dispute resolution services. Counsel appearing for the petitioner on the other hand argued that keeping in view the prohibition contained in Section 80 of the Arbitration and Conciliation Act, 1996, the council cannot act as a arbitrator in a case where it has itself conducted conciliation proceedings. This would, according to him, would mean that after the conciliation proceedings fail, the council would have no right assume the role of an arbitrator and shall have to make a adjudication of the disputes for arbitration to any institution or centre for such arbitration. I do not for the present propose to express any final opinion as to the legality or legitimacy of the arbitration proceedings, if the council chooses to assume the role of an arbitrator. Whether or not the Council can decide to act as an arbitrator or refer it to an institution or centre providing alternate dispute resolution services is a question which the Council will have to answer at the appropriate stage. It is only when the Council makes a report regarding the failure of the conciliation proceedings and decides to take up the arbitration proceedings that the question whether the Council can act as an arbitrator may call for determination. Till such time, the Council has not taken a decision in that -4- Arbitration Case Nos.108 to 100 of 2008 regard. It is premature even for this Court to express any opinion regarding the legality of arbitration by the council. Suffice it to say that the present petitions seeking appointment of a arbitrator are for the present not maintainable and shall have to await conclusion of the conciliation proceedings. In the result, these petitions are disposed off in the following terms:- 1. The parties shall appear before the Haryana Micro & Small Enterprise Facilitation Council on 15.09.2009 for further directions; 2. The Council shall resume to the conciliation proceedings and conclude the same expeditiously but not later than three months from 15.09.2009; 3. The Council shall communicate to the parties, the result of the conciliation proceedings and also whether the matters in dispute, if not resolved, is being referred to arbitration if so whether the Council would itself act as an arbitrator or refer the same to any institution or centre providing alternate dispute resolution services. The parties shall have the liberty to seek appropriate redress in appropriate proceedings before the appropriate court or forum depending upon the decision taken by the Arbitrator. No costs. All the pending applications are also disposed off. A copy of the order be given dasti to the counsel for the petitioner, under the signatures of Special Bench Secretary. August 21, 2009 (T.S.Thakur) Malik Chief Justice Arb.Case No. 110 of 2008. *** Present: Shri V.K.Jain,Sr.Advocate, with Shri Pardeep Bhandari,Advocate. Shri Hariom Attri,Advocate, for respondent No.1. Shri Ajay Gupta, Addl: A.G.Haryana. *** Same order as in Arbitration case No. 108 of 2008 decided on August 21, 2009. August 21, 2009 (T.S.Thakur) Malik Chief Justice Arb.Case No. 109 of 2008. *** Present: Shri V.K.Jain,Sr.Advocate, with Shri Pardeep Bhandari,Advocate. Shri Hariom Attri,Advocate, for respondent No.1. Shri Ajay Gupta, Addl: A.G.Haryana. *** Same order as in Arbitration case No. 108 of 2008 decided on August 21, 2009. August 21, 2009 (T.S.Thakur) Malik Chief Justice