§%¥ 2K3 HIGH COURT OF CHHATTISGARH AT BILASPUR Arbitration Application No.26 of 2009 APPLICANT: Welcome Distillery Pvt. Ltd., Versus RESPONDENT : Aifa Laval (India) Ltd., POST FOR ORDER ON “H‘APRIL: 2011, Sdl- Dhirendra Mishra Judge 'l Enav u . 25 ’4 HIGH COURT OF CHHATTISGARH AT BILASPUR Arbitration Application No.26 of 2009 APPLICANT: Welcome DistiHery Pvt. Ltd., A company registered under the Companies Act, 1956, having its head office at Super Market, 2‘” Floor, Agrasen Chown, Biiaspur, CG, Anti factory at Chhekabanda, PS Kota, Distt. Biiaspur, Chhattisgarhv Through Rudresh Gupta, S/o Shri Vijay Shri Gupta, Aged about 3O years, Working as Personal Officer, Welcome Distillery, Bilaspur (CG) Versus RESPONDENT: Alfa Laval (lndia) Ltd., A company incorporation under the lndia, Companies Act, Vll of 1913, having its registered office at Mumbai-Pune Road; Dadpoli, Pune 411 —12. Present: Smt. Fransesca Kapur and Shri Pankaj Shrivastava, counsel for the applicant. Shri SS Rajput, counsel for the respondent. O R D E R (Passed ritn (4‘11 April, 201 1) Dhirendra Mishra, J. The applicant has tiled this application under Section 11(6) of the Arbitration and Conciiiation Act, 1996 (in short ”the Act”) for appointment of sole arbitrator. O2. As per averments in the application, the applicant entered into negotiation for the conversion of its existing molasses distillery for a capacity of 40,000 LPD grain based distillery. An offer was made by the respondent for the aforesaid work, vide their letter dated 18.6.2004 (Annexure A/1), along with proposal for LPD Grain Based Extra Neutral n __, WWWMWM ‘ $ W 1m RMEW u‘wwz‘ Alcohol Plant of the applicant. The applicant, accepting the above proposal, placed an order for conversion of its molasses distillery into grain based distillery vide Annexure A/2 dated 6.7.2004. The applicant also appointed M/s Skansen Engineering & Consultancy Co. Ltd. as an agency for erection and commissioning of the plant and equipment ordered to the respondent. The equipment was to be delivered and commissioned by the respondent within six months from the date of placing of order i.e. 18‘“ June, 2004, as is evident from the purchase order of Annexure A/3. The applicant made advance payment of R321 lacs. However, there was delay on part of the respondent as they did not provide civil and structural drawings to the applicant despite repeated reminders. Since the quaiity of the work was also not up to the mark, the applicant did not give performance clearance to the respondent. Finally, the applicant, vide its letter dated 7.11.2006, apprised the respondent of various probiem faced by their unit on account of poor performance of the equipments supplied by them and further intimated that because of the probiems caused by non— performance of the supplied plants, they are suffering loss in the economic output. 03. lt has been further averred that Clause 26 of the General Terms and Conditions of Sale of Goods and of Erection and Commissioning of Equipment, annexed with the proposal of Annexure A/1, provides for resolution of the dispute through arbitration as per provisions of the lndian Arbitration Act, 1940 or any re—enactment or statutory modincation thereof. The applicant sent a notice to the respondent and requested for appointment of arbitrator, however, when the respondent failed to appoint an arbitrator, the instant application has been filed. “imitated b L { f( , ‘ 39" m W L4 _ Wmwgwmwwwwmww September, 2008 vide Annexure R/3. O5. Shn’ Rajput, learned counsel for the respondent, further contended that the head office and registered office of the respondent is based at Pune, Satara and purchase order was pressed by the respondent at Pune, Satara. The ordered equipment was 11(6) of the Act. It is settled law that where there is more than one forum where the suit can be filed, then it fs open to the parties to agree upon and select a particular forum and exclude all other forums, in which the proceedings may be filed. In the instant case, by agreeing to submit themselves to the exclusive jurisdiction of the arbitrator at Bombay, the parties have voluntarily ousted the jurisdiction of the other Courts, including this High Court. Even otherwise, the applicant could have challenged the maintainability of the earlier arbitration application filed by the respondent before the Bombay High Court, however, they did not appear despite service of notice and the High Court of Bombay has already decided the application and referred all the disputes arising out of the purchase agreement to the sole arbitrator. 06. Reliance is placed on the judgments of the Supreme Court in the matter of M/s shriram City Union Finance Corporation Ltd. Vs. Rama Mishra, reported in AIR 2002 SC 2402 and New Moga Transport Company Vs. United India Insurance Co. Ltd. and others, reported in AIR 2004 SC 2154. O7. Smt. Francesca Kapur with Shri Pankaj Shrivastava, teamed counsel for the applicant, submitted that the applicant has already averred in the application that the instant application has been filed after notice to the other side for appointment of arbitrator and copy of the notice dated 11.2.2009 has also been annexed along with application for taking documents on record dated 22.4.2009. The issue pending before the High Court of Bombay relates to encashment of bank guarantee by the applicant, and the instant dispute has not been v‘ W w w * WWW/w WW «x gww‘rmumw <x W \ @ referred by any of the parties to the Bombay High Court. Even otherwise, the applicant never received any notice from the Bombay High Court regarding arbitration application fiied by the respondent herein and therefore‘ there is no suppression by the applicant in this regard. 08. It was further argued that the respondent has its head office at Pune, Satara whereas the equipment ordered by the applicant was to be supplied and commissioned at Bilaspur. Thus, no cause of action arose within the jurisdiction of Bombay High Court and therefore, the parties could not confer jurisdiction by consent and agree to refer the dispute to the single arbitrator in Bombay. 09. Reliance is placed on the judgment of the Supreme Court in the matter of Patel Roadways Limited, Bombay Vs. M/s Prasad Trading Company, reported in AIR 1992 sc 1514 .- (1991) 4 scc 24o. 10. Heard learned counsel for the parties, perused the pleadings of the respective parties and the documents appended thereto. 11. lndisputably, the dispute sought to be referred in the instant application and the dispute raised by the respondent before the Bombay High Court are arising out of the General Terms and Conditions of Sale of Goods and of Erection and Commissioning of Equipment appended with the proposal dated 18.6.2004 (Annexure A/1) of the respondent for 40,000 LPD grain based conversion of applicant‘s existing molasses distillery to grain based distillery, which has been accepted by the applicant on 6.7.2004. From the documents filed by the respondent, it is also apparent that the Bombay High Court 6 @ has entertained the application under Section 11(6) of the Act med by the respondent and issued notice to the appiicant herein and the notice has already been served upon the applicant on 26.9.2009. The Bombay High Court, vide their order dated 5‘“ August, 2010, med as Annexure A by the respondent along with application for taking document on record, appointed Mr. MP. Rao, Advocate, High Court of Bombay or any other person as a sole arbitrator in terms of Section 11 of the Act to settle the claims of the applicant and to refer all disputes between the applicant and the respondent arising under or out of or relating to the said agreement dated 6‘“ July, 2004 in terms of the respondent’s offer dated 18m June, 2004 and the applicant’s purchase order dated 6‘“ Jury, 2004. v:/<~., ,, A 12. That apart, l also nnd substance in the contention of learned counsel for the respondent that there is no averment in the application that the notice sent by the applicant for appointment of arbitrator was received by the respondent on a particular date and that even after receipt of the notice, the respondent failed to appoint arbitrator. Initially, no notice was annexed along with the application and subsequently, photocopy of the notice under Section 11(2)(b) of the Act dated 11.2.2009 has been fiied along with application dated 22.4.2009 for taking document on record. However, there is nothing on record to show that the said notice was ever dispatched and the same was received by the addressee on a particular date, as neither postal receipt nor acknowledgement receipt has been annexed with the application. a (a, 13. Thus, considering the above fact and also considering that a" the disputes arising out of the purchase agreement dated 6m July, 2004 have been referred for adjudication to the sole arbitrator by the Bombay High Court i am of the opinion that the present application at the instance of applicant is not maintainable and the same is, accordingly, rejected. "Wis??— Dhirendra Mishra Judge 0‘1 I'T-EV I l