Arbitration Case No. 133 of 2006 [1] IN THE HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH Arbitration Case No. 133 of 2006 Date of Decision: 18.3.2010 Punjab State Industrial Development Corporation Ltd. ..Petitioner Versus Dr. B.S.Grewal ..Respondent CORAM: HON'BLE MR. JUSTICE MUKUL MUDGAL, CHIEF JUSTICE 1.Whether Reporters of local papers may be allowed to see the judgment ? 2. Whether to be referred to the Reporters or not ? 3. Whether the judgment should be reported in the Digest? Present :- Mr. Sanjeev Trikha, Advocate, for the petitioner. Mr. Amit Rawal, Advocate, for the respondent. *** MUKUL MUDGAL, C.J. (Oral) 1. This petition has been filed by the petitioner under Section 11(6) of the Arbitration & Conciliation Act, 1996 (for short 'the Act), for appointment of an Arbitrator on behalf of respondent so as to complete the Arbitral Tribunal to adjudicate upon the disputes between the parties. 2. Clause 36 of the agreement contains the Arbitration Clause which reads as under:- “All differences and disputes between the parties hereto on any clause or matter herein contained or their respective rights, claims or liabilities hereunder or otherwise, howsoever, in relation to or arising out of this agreement, shall be referred to arbitration by two arbitrators (one to be appointed by each party), who shall, before proceeding with the reference, appoint an Umpire and such arbitration shall be governed by the Indian Arbitration Act, 1940 or any modification or re-enactment thereof for the time being inforce.” Arbitration Case No. 133 of 2006 [2] 3. Upon notice, the respondent put in appearance and filed reply. The existence of arbitration clause and invocation thereof are not disputed by the respondent. Mr. Amit Rawal, learned counsel appearing for the respondent while addressing the arguments sought to raise an issue that the agreement no longer subsists between the parties in view of Clause 35 of the agreement because the paid up equity capital of the private investor group has fallen below 10% and secondly that the claim of the petitioner is pre-mature. 4. Learned counsel appearing for the petitioner on the other hand rebutted the aforesaid objections raised by learned counsel for the respondent stating that the collaborator as per the agreement was under obligation for buy back of equity shares of the Corporation but inspite of various communications issued to the collaborators, he has not remitted the payment of buy back shares which comes to Rs. 70,45,500/-. He further contends that share of the petitioner has never fallen below 10%. 5. After hearing learned counsel for the parties and on going through the record, I am of the view that this Court while exercising power under Section 11(6) of the Act is not required to decide the issues raised by the parties on merits. Whether paid up equity capital has fallen below 10% or not, is itself a dispute which is referable to the Arbitral Tribunal as per the arbitration clause. Otherwise also, if the stand taken by the respondent is taken to be true, the liability accruing under the agreement is itself disputed which can always be adjudicated upon by the Arbitrator. Arbitration Case No. 133 of 2006 [3] 6. In this view of the matter, the present application is allowed. The Respondent is directed to appoint its Arbitrator not later than four weeks from today. Thereafter both the Arbitrators i.e. one appointed by the petitioner and the other appointed by the respondent shall appoint third Arbitrator i.e. Umpire so as to complete the Arbitral Tribunal. In the meanwhile, the parties will exchange the statements of claim and response thereof. The statement of claim be supplied to counsel for the respondent on or before 19.4.2010 and counsel for the respondent shall respond the same within four weeks thereafter. The parties shall appear before the Arbitral Tribunal on 14.6.2010 at 4.00 P.M. or on an agreed date convenient to the parties but not later than a fortnight from the date of exchange of pleadings as directed aforesaid. The Tribunal shall dispose of the reference not later than six months from the date of first appearance of the parties. However, it is made clear that this Court has not gone into the issues raised in the petition on merits, therefore, those issues are left open to be agitated before the Arbitral Tribunal. 7. In case, the respondent does not appoint its Arbitrator within four weeks from today, the petitioner shall be at liberty to get the present petition revived for appointment of a sole Arbitrator in place of Arbitral Tribunal by this Court. In that eventuality, the respondent shall forfeit his right to agitate the appointment of a sole Arbitrator by the Court. (MUKUL MUDGAL) CHIEF JUSTICE 18.03.2010 'ravinder'