THE HON’BLE SRI JUSTICE V.V.S.RAO ARBITRATION APPLICATION No.131 of 2008 DATED 06.10.2009 BETWEEN: Newstoday (Private) Limited … Applicant AND V.Sunil Bodhankar and another .. Respondents THE HON’BLE SRI JUSTICE V.V.S.RAO ARBITRATION APPLICATION No.131 of 2008 ORDER: This is an application under Section 11 of the Arbitration and Conciliation Act, 1996 for appointment of sole arbitrator to adjudicate the dispute that has arisen in relation to Training-cum-Service Agreement (TCSA), dated 12.12.2005. Clause 15 thereof provides for resolution of the disputes by sole arbitrator. The facts of the matter are not seriously in dispute. News Today (Private) Limited, applicant herein selected first respondent to undergo training in Eenadu Journalism School (EJS), Ramoji Film City, Hyderabad. First respondent executed TCSA on 12.12.2005 agreeing to work for a period of four years including one year period of Diploma Course and Advanced Training. Clause 9(ii) of TCSA stipulates that in the event of breach by first respondent, he shall pay an amount of Rs.75,000/- to applicant as compensation. Second respondent joined agreement as surety. First respondent completed training and was appointed as Copy Editor/Reporter, for a period of six months, on probation. After completion of the probation period, he left the job without applying leave. In spite of notices, he did not report for duty. Therefore, applicant issued notice and discharged him from service and also sent notice calling upon respondents to pay compensation amount of Rs.75,000/- as per clause 9(ii) of TCSA. First respondent did not give any reply. Therefore, applicant invoked clause 15 of TCSA and issued notice on 09.07.2008 appointing their nominee as arbitrator. Notices sent to respondents have been unserved. Hence, applicant has taken out notice by substituted service on respondents by publishing the same in “Punyanagari (Ahmedabad Edition)” Hindi daily newspaper. Learned counsel for applicant has filed Memo of Proof of Service by substituted service vide Memo USR No.1584 of 2009. Respondents 1 and 2 are called absent. They are set ex parte. This Court heard learned counsel for applicant. Relying on the order of this Court in Arbitration Application No.6 of 2008, dated 29.01.2009 (unreported Judgment in News Today (Private) Limited v S.Hari Prasad), learned counsel submits that the facts therein are similar to this case. Arbitration Application No.6 of 2008 was filed by News Today (Private) Limited invoking arbitration clause in similar TCSA. Factual background is similar to the factual background in this application. It was contended therein that when the agreement itself is void ab initio as per common law principle ‘ex nihilo nil fit’, agreement cannot be enforced and hence question of resolving dispute by arbitration does not arise. This Court after referring to various decisions, namely, Wellington Associates Limited v Kirit Mehta, SBP & Company v Patel Engineering Limited, Rodemadan India Limited v International Trade Expo Centre Limited, Shree Ram Mills Limited v Utility Premises (Private) Limited, Aurohill Global Commodities Limited v M.S.T.C.Limited and National Insurance Company Limited v Boghara Polyfab (Private) Limited, held as under. Section 11 empowers the Chief Justice of High Court to appoint Arbitrator. 1996 Act drastically deviated from 1940 Act in ways more than one. For instance under 1940 Act, Courts could intervene and give interim orders on whole range of matters concerning arbitration. The New Act minimizes supervisory role of Courts and can intervene only after the award is made by the Arbitral Tribunal (Sections 5 and 16(6) read with Section 34). By reason of Section 16(1) of the 1996 Act, the arbitral Tribunal is all-powerful to decide its own jurisdiction inter alia the question whether the contract is null and void and renders ipso jure arbitral clause invalid. … Under 1940 Act, an Arbitrator cannot decide the question whether the agreement is valid, void and/or unenforceable and such a question has to be decided only by civil Court, whereas under 1996 Act, the Arbitral Tribunal can decide all questions including the question whether the contract is null and void rendering arbitral clause itself as void. In view of the glaring departure from 1940 Act, decisions cited by learned counsel for first respondent cannot have any application. It is well settled that any decision of Supreme Court interpreting the law, which has been repealed by the New enactment cannot be treated as declaration of law with reference to New Act unless and until the Repealing Act contains explicitly and impliedly a similar provision in Repealed Act. Reading Section 33 of 1940 Act and Section 16(1) of the 1996 Act and other provisions, it is not possible to accept the submission of respondents that the Chief Justice or his nominee can decide the validity of agreement under Section 11(6) of 1996 Act. While holding so, this Court appointed sole arbitrator to adjudicate the dispute. Following the order, dated 29.01.2009 in Arbitration Application No.6 of 2008, this application is allowed. Hon’ble Sri Justice P.L.N.Sarma, retired Judge of this Court, is appointed and requested to be arbitrator to resolve the dispute arising under and in relation to Training-cum-Service Agreement (TCSA), dated 12.12.2005 executed by and between the applicant and first respondent herein. Learned Arbitrator is requested to fix professional fees as deemed fit and reasonable and also requested to pass award as expeditiously as possible. The parties to this application shall bear their own costs. _______________ (V.V.S.RAO, J) 06.10.2009 pln