IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE K.T.SANKARAN TUESDAY, THE 9TH NOVEMBER 2010 / 18TH KARTHIKA 1932 AR.No. 30 of 2010 PETITIONERS: ---------------------- 1. BIJU XAVIER, S/O.LATE JOHN, KALLIPARAMBIL HOUSE, MARUVAKKAD, CHELLANAM VILLAGE, KOCHI TALUK, ERNAKULAM DISTRICT 2. BENEDICT.K.H.,S/O.LATE HENRY, KAITHAVALAPPIL HOUSE, KANNAMALY, KUMBALANGHI VILLAGE, KOCHI TALUK. BY ADV. SRI.DINESH R.SHENOY SRI.G.HARIKRISHNAN (TRIPUNITHURA) SRI.MAHESH MENON RESPONDENT: --------------- CHRISTY FERNANDEZ,S/O.JOSEPH FERNANDEZ KALLADA HOUSE, PACHALAM, KOCHI-682012. BY ADV. SRI.P.P.RAJESH THIS ARBITRATION REQUEST HAVING BEEN FINALLY HEARD ON 09/11/2010, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: K.T.SANKARAN, J. ------------------------------------------------------ Arbitration Request NO.30 OF 2010 ------------------------------------------------------ Dated this the 9th day of November, 2010 O R D E R The petitioners and the respondent entered into Annexure A1 agreement dated 26.10.2007 in respect of the conduct of a floating restaurant under the name and style “M/s.Quality Inn”, in the backwaters of Marine Drive, Ernakulam. Clause (1) of the agreement shows that it was for a period of eleven months. Clause (15) of the agreement provides that the period of eleven months could be extended on mutually agreed terms. It is stated that even before the expiry of the period of eleven months, difference of opinion arose between the parties. According to the petitioners, they could not conduct the restaurant and they surrendered possession in May, 2008. The agreement provides for a security deposit of ` 15 lakhs to be made by the petitioners. Clause (18) of the agreement provides for return of the security deposit on termination of the agreement. The petitioners state that on termination of the agreement, the security deposit was not returned to them. Notices were issued to the respondent. The petitioners filed O.P.(Arb.) Arbitration Request NO.30 OF 2010 :: 2 :: No.1903 of 2008 before the District Court, Ernakulam under Section 9 of the Arbitration and Conciliation Act, 1996, praying for interim measures. It is stated that later O.P.(Arb.) No.1903 of 2008 was dismissed for default. Challenging the same, the petitioners filed Arbitration Appeal No.24 of 2010 before the High Court. 2. Clause (20) of Annexure A1 agreement contains the arbitration clause, which reads as follows: “20. All the disputes and differences arising between the parties hereto, including any dispute or difference in regard to the interpretation of any provision or term or the meaning thereof, or in regard to any claim of one party against the other or in regard to any claim of one party against the other or in regard to the rights or obligations of any party or parties hereto under this agreement shall be referred to arbitration by an arbitrary appointed by the First Party and such arbitration shall be governed by the provisions of Arbitration & Conciliation Act, 1996, as amended from time to time. The venue of arbitration shall be at Ernakulam in the State of Kerala.” It is stated that in spite of the notice, the first party in the agreement, Arbitration Request NO.30 OF 2010 :: 3 :: namely, the respondent herein, did not appoint an arbitrator. The receipt of notice and the failure to appoint an arbitrator are not denied by the respondent. 3. In the counter affidavit filed by the respondent, it is contended that the Arbitration Request is not maintainable since complicated questions of fact and law are involved in the disputes. Therefore, it is contended that arbitration is not a feasible method of resolving the disputes. It is also contended that the questions involved in the case can be decided only by the civil court. 4. According to the respondent, during the licence period, the petitioners caused extensive damage to the licensed premises. Due to mismanagement of the petitioners in the matter of running the restaurant, the “reputation and goodwill of the restaurant” among the public were seriously affected. The respondent says that ` 15 lakhs was not paid in lump, but it was paid in instalments. The respondent contends that extensive damage was caused to the licensed premises, furniture, fittings, fixtures, utensils etc. by the petitioners. The case of the petitioners that they vacated the premises is denied Arbitration Request NO.30 OF 2010 :: 4 :: by the respondent. According to the respondent, the petitioners did not surrender or vacate the floating restaurant. He also raised a contention that the generator, water tank, cutlery items, cooking utensils, kitchen appliances etc. are missing from the licensed premises. Several other items of claims have been pointed out in the counter affidavit, which is estimated at ` 3 lakhs by the respondent. He also claims a sum of ` 2,17,000/- as arrears of licence fee. The respondent also claims a sum of ` 2,000/- per day from the petitioners for the days during which the petitioners continued to occupy the licensed premises. According to the respondent, assessment of damages can be made only by an expert and if an arbitrator is appointed, this facility would not be available. Therefore, the respondent contends that the remedy of the petitioners is only to file a civil suit. 5. Annexure A1 agreement provides for resorting to arbitration proceedings in case of any dispute between the parties. The agreement does not contemplate a situation where the arbitration clause is excluded on the ground of the dispute being of a complicated nature. Even assuming that the disputes are of a Arbitration Request NO.30 OF 2010 :: 5 :: complicated nature, that does not take away the binding nature of the arbitration clause between the parties. Any dispute of a civil nature can be decided by a civil court unless its cognizance is either expressly or impliedly barred. When the parties agreed to arbitration for resolving the dispute, that is a bar to the cognizance of a civil suit by a civil court. There is no dispute that there is an arbitration agreement in the present case. The arbitration clause does not contain any qualification as to the nature of the dispute, namely, a simple dispute or a complicated dispute. The existence of complicated questions of fact or law in the matter of disputes involved in the case do not affect the arbitration clause contained in the agreement executed between the parties. 6. The fact that assessment of damages could be made by appointing an expert does not mean that the arbitrator loses his jurisdiction. It is not disputed by the petitioners that the arbitrator can seek the assistance of an expert. Sections 6 and 26 of the Arbitration and Conciliation Act, 1996 contemplate the power of the arbitrator to seek the assistance of an appropriate person to enable the arbitrator to effectually and completely resolve the disputes Arbitration Request NO.30 OF 2010 :: 6 :: involved in the arbitration proceedings. Section 6 provides that in order to facilitate the conduct of the arbitral proceedings, the parties, or the arbitral tribunal with the consent of parties, may arrange for administrative assistance by a suitable institution or person. Section 26 of the Act provides for appointment of expert by the arbitral tribunal. Sections 6 and 26 provide ample powers to the arbitrator to appoint or seek the assistance of an expert in the particular field. The arbitrator has ample power to appoint a Commissioner for local inspection, an accountant to inspect the accounts, a finger print expert or a handwriting expert to inspect questioned documents, an engineer or an architect to inspect structures, buildings, industrial sites etc., and the like. Section 19(3) of the Act enables the arbitral tribunal to conduct the proceedings in the manner it considers appropriate, in the absence of an agreement between the parties on the procedure to be followed. This provision also confers jurisdiction on the arbitrator to adopt an appropriate procedure for resolving the dispute involved in the case, which includes the power to appoint an expert. 7. The arbitrator need not always be an expert on technical Arbitration Request NO.30 OF 2010 :: 7 :: matters, which are involved in the dispute. Technical matters may emerge in the resolution of a dispute and for that reason the arbitrator to be appointed need not necessarily be an expert in that field. If a legal expert, who is not an expert in the technical field, is capable of resolving the dispute effectively after getting the assistance of an expert, nothing prevents the appointment of such a legal expert as arbitrator. It is true that Section 11(8) of the Act empowers the Chief Justice or the person or institution designated by him, to take into account the qualification required of the arbitrator by the agreement of parties and also to have due regard to other considerations to secure the appointment of an independent and impartial arbitrator. In that process, an expert in the technical field may be appointed as arbitrator, if the facts and circumstances so warrant or if the parties so agree. But Section 11(8) is not a bar for the appointment of an appropriate person, other than an expert in the technical field, as arbitrator, even in a case where expert opinion is required for resolving the dispute. 8. Similar situation may arise even in a civil suit. A Judge presiding over the civil court need not or may not be an expert in the Arbitration Request NO.30 OF 2010 :: 8 :: particular technical field. That does not mean that the civil court can shirk the responsibility in the matter of resolving the disputes involved in the case. Adequate assistance of experts in the field could be obtained by the civil court or by the arbitrator, as the case may be. 9. For the aforesaid reasons, I am of the view that the contention raised by the respondent that since assistance of a technical expert is required for assessment of damages, the matter has to go to the civil court, does not merit acceptance. If such assistance is required, a request can be made before the arbitrator in that regard and the arbitrator will consider the same taking into account all the relevant facts and circumstances of the case. Or else, if the arbitrator finds that assistance of an expert is required in the matter of assessment of damages, even without a request from the parties, the arbitrator has jurisdiction to pass appropriate orders in that regard. 10. Accordingly, I overrule the objections raised by the respondent. Both sides agreed that Sri.K.Ramachandran (Retired Arbitration Request NO.30 OF 2010 :: 9 :: District Judge) can be appointed as the arbitrator. Accordingly, Sri.K.Ramachandran, Advocate, “Govind”, Neduvelil Lane, Ravipuram Road, Ernakulam is appointed as the Arbitrator. The Arbitrator would be free to fix his fee. The Arbitration Request is allowed as above. No costs. (K.T.SANKARAN) Judge ahz/