Case: Dresser Rand S.A Vs. M/S. Bindal Agro Chem Ltd.

contended that the words the purchase order in Clause (C) should be read as this purchase order. For this purpose, he referred to several provisions of the General Conditions of Purchase, some of which use the words the purchase order whereas other use the words this purchase order. He contended that the words the and this are loosely used in the General Conditions of Purchase and in the Letters of Intent and are, therefore, interchangeable. We cannot agree. Firstly, it is not open to us to change the terms of any document. Secondly, the use of the words this purchase order in some clauses of the General Conditions of Purchase was not inappropriate. It should be remembered that the General Conditions of Purchase, in entirety, were intended to be treated as a part to the purchase order as and when the purchase order was placed. Therefore, when the General Conditions of Purchase were read as part of the purchase order, use of the words this purchase order in the General Conditions of Purchase would be appropriate. Therefore, it is impermissible to read the words the purchase order in clause (C) of Letters of Intent as this purchase order. 40. Thus, neither the General Conditions of Purchase forming part of Invitation of Bid nor Revision No.4 dated 10.6.1991, nor the Letters of Intent dated 12.6.1991 contain any arbitration agreement. There is also no other document or correspondence which can be read as containing a provision that can be interpreted as an agreement to resolve disputes by arbitration. We are, therefore, of the view, though for slightly different reasons, that the decision of the learned Single Judge and the Division Bench of the High Court holding that there is no arbitration agreement, does not suffer from any infirmity. Re: Point No. (iii) : 41. DR contends that the conduct of BINDAL and KGK clearly showed that they proceeded on the basis that there was an arbitration agreement. DR referred to the notices dated 9.1.1993, 29.1.1993 and 4.2.1993 issued by its Counsel culminating in the final notice dated 5.2.1993 seeking reference to arbitration. It is pointed out that neither BINDAL nor KGK issued any reply to the said notice dated 5.2.1993 thereby indicating an implied acceptance of an arbitration agreement. DR also points out that when notice was sent by ICC to BINDAL and KGK in respect of the request for arbitration lodged by DR, Mr. Bhattacharyya, Advocate, sent a reply dated 11.4.1993 acting on behalf of both BINDAL and KGK, stating that they are in the process of jointly nominating an arbitrator. It is contended that if there was really no arbitration agreement, the counsel for BINDAL and KGK would not have stated that they were in the process of nominating an arbitrator. It is contended that only by way of an afterthought, BINDAL and KGK changed their stand to contend that there was no arbitration agreement, when their changed the counsel and sent a further reply dated 27.4.1993 and 28.4.1993 respectively. It is submitted that there is acquiescence on the part of BINDAL and KGK in regard to arbitration. 42. This is countered by BINDAL and KGK by pointing out that Mr. Bhattacharyya had stated that an Arbitrator will be appointed by BINDAL and KGK without examining or knowing the full facts, while sending the letter dated 11.4.1993. They point out that immediately thereafter, by issuing notices dated 27.4.1993 and 28.4.1993, they made it clear that there was no arbitration agreement. It is contended that even if Mr. Bhattacharyya had stated that an arbitrator was being appointed, that would not come in the way of either BINDAL or KGK subsequently pointing out that there was no arbitration agreement, when they examined the legal position or when an application under section 3 of Foreign Awards Act was filed. 43. In U.P. Rajkiya Nirman Nigam Ltd. vs. Indure Pvt. Ltd. [1996 (2) SCC 667] negativing a contention based on acquiescence in matters concerning challenge to arbitrability, this Court observed thus :- Acquiescence does not confer jurisdiction........................ The clear settled law thus is that the existence or validity of an arbitration agreement shall be decided by the Court alone. Arbitrators, therefore, have no power or jurisdiction to decide or adjudicate conclusively by themselves the question since it is the very foundation on which the arbitrators proceed to adjudicate the disputes. Therefore, it is rightly pointed out by Shri Adarsh Kumar Goel, learned counsel for the appellant that they had by mistake agreed for reference and that arbitrators could not decide the existence of the arbitration agreement or arbitrability of the disputes without prejudice to their stand that no valid agreement existed. Shri Nariman contended that having agreed to refer the dispute, the appellant had acquiesced to the jurisdiction of the arbitrators and, therefore, they cannot exercise the right under Section 33 of the Act. We find no force in the contention. As seen, the appellant is claiming adjudication under Section 33 which the Court alone has jurisdiction and power to decide whether any valid agreement is existing between the parties. Mere acceptance or acquiescing to the jurisdiction of the arbitrators for adjudication of the disputes as to the existence of the arbitration agreement or arbitrability of the dispute does not disentitle the appellant to have the remedy under Section 33 through the Court. In our considered view the remedy under Section 33 is the only right royal way for deciding the controversy. [Emphasis supplied] What is stated above with reference to section 33 of Arbitration Act, 1940, will apply with equal force in regard to section 3 of Foreign Awards Act. Therefore, the fact that at some point of time, BINDAL or KGK had stated that they would appoint an Arbitrator will not come in the way of their demonstrating that there is no arbitration agreement when the matter comes up before the court under section 3 of the Foreign Awards Act. Therefore, there is no question of either waiver or acquiescence. Conclusion 44.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]What is stated above with reference to section 33 of Arbitration Act, 1940, will apply with equal force in regard to section 3 of Foreign Awards Act. Therefore, the fact that at some point of time, BINDAL or KGK had stated that they would appoint an Arbitrator will not come in the way of their demonstrating that there is no arbitration agreement when the matter comes up before the court under section 3 of the Foreign Awards Act. Therefore, there is no question of either waiver or acquiescence.