Rodemadan India Limited vs International Trade Expo Centre ...

The Respondent-Company has a lease of the land situated at Plot No. A-11, Sector-62, Noida from the New Okhla Industrial Development Authority for a period of ninety years. The Respondent wanted to construct and develop an Exhibition Centre on the said land. There were negotiations between the Petitioner-Company and the Respondent-Company, as a result of which an exclusive Management Agreement was arrived at on 29.10.2003. Under the said agreement, the Petitioner was granted the exclusive right to manage the said plot of land for a period of ten years from the date on which 'Vacant Possession' was handed over to it. Certain other terms as to payments were agreed to between the parties. Two clauses, 8.0 and 8.1 of the said agreement, which are of relevance, are as under:

Certain disputes had arisen between the parties, as a result of which, on 16.3.2005 the Petitioner filed an application under Section 9 of the Act before the High Court of Delhi (OMP No. 98/2005) and obtained an order directing the Respondent to maintain status quo with regard to the possession and title of the said plot of land.

On 8.4.2005, the Petitioner sent a legal notice to the Respondent invoking Clause 8.1 of the said agreement. By the said notice invoking arbitration, the Petitioner appointed Dr. L.M. Singhvi, Senior Advocate, as its nominee arbitrator in terms of the Management Agreement and requested the Respondent to nominate its arbitrator in terms of the said clause within a period of thirty days from the date of receipt of the notice. It was clarified in the said notice that since the agreement provided for Indian Law as the applicable law, an Indian jurist had been appointed. It was stated that this would not be deemed or construed to be a waiver of the Petitioner's right to have the third or Presiding Arbitrator from a neutral country (i.e. other than India and Cyprus), the arbitration invoked being an "International Commercial Arbitration" within the meaning of Section 2(1)(f) of the Act. On 4.5.2005, the Respondent replied to the said notice of the Petitioner, raising several contentions, inter alia taking the stand that there was no arbitration agreement in existence. Nonetheless, it appointed Justice S.C. Jain, a retired Judge of the Allahabad High Court as its nominee arbitrator "without prejudice" to their right to challenge the validity of the arbitration proceedings. By a letter dated 20.5.2005, Justice Jain accepted his appointment as an arbitrator. However, since the two arbitrators were not able to arrive at a consensus with regard to the appointment of the Presiding Arbitrator/ Chairperson of the Arbitral Tribunal, the Petitioner moved this application under Section 11(6) of the Act on 29.8.2005 for appointment of a Presiding Arbitrator/ Chairperson of the Arbitral Tribunal.

I am, therefore, required to decide whether the preliminary conditions necessary for the exercise of the designate's power under Section 11(6) are satisfied, especially whether there exists a valid arbitral agreement.

Accordingly, I am given wide discretion to decide what evidence oral or documentaryis necessary for me to make an effective finding on the preliminary jurisdictional issues.

Further, it was urged that Clauses 8.0 and 8.1 of the Management Agreement are mutually exclusive and, therefore, the relief for specific performance cannot be asked for and since no consideration had been paid the contract was void and unenforceable. In my view, these are not issues to be considered in a petition under Section 11(6) of the Act, as they can all be raised during the arbitral proceedings.

In short, I am not satisfied that the arbitral agreement was vitiated on any of the grounds averred by Mr. Ranjit Kumar. I am satisfied that there exists a valid arbitration agreement which contemplates that that all disputes between the parties under that agreement be referred to arbitration.

The situation is one of a dispute between the Petitioner, which is a foreign company and the Respondent and is therefore, an "International Commercial Arbitration" within the meaning of Section 2(1)(f) of the Act. There is a dispute between the parties where both parties are subject to an arbitration agreement. Further, the appointed arbitrators have failed to reach an agreement upon a Chairperson/ Presiding Arbitrator of the Arbitral Tribunal. Hence, I am satisfied that all the preliminary conditions specified in Section 11(6) and Patel Engineering (supra) have been met. In the result, I allow the petition and appoint Justice Arun Kumar, a retired Judge of the Supreme Court of India, as the Chairman/ Presiding Arbitrator of the Arbitral Tribunal, subject to his consent and on such terms as he fixes.

The petition is accordingly allowed with no order as to costs.