Case: Arasmeta Captive Power Co. Pvt. Ltd &amp; An Vs. Lafarge India P. Ltd

the appellant No. 1 is a company carrying on business in generation of power. The respondent owns 49% equity of the appellant No. 1 company and the appellant No. 2 owns 51% equity of the appellant No. 1 company. The appellant-company had entered into two agreements with the respondent for supply of power to the respondent. The first agreement, namely, a Power Purchase Agreement (PPA) was entered into on 10.2.2005 and the second agreement of similar nature was entered into on 1.11.2007 for supply of power. In course of subsistence of the agreements dispute arose between the parties relating to amounts that is due and payable. The appellants treated the dispute raised to be and sought to appoint an expert in accordance with clause 16.2 of the agreements and, accordingly, communicated with the respondent vide letter dated 4.5.2012 proposing for appointment of one of the three persons of expertise and repute for appointment as an expert in respect of both the PPAs. The appellant No.1 requested the Confederation of Indian Industry vide letter dated 30.5.2012 to appoint a suitable expert. As put forth by the appellant, the respondent did not accede to resolve the dispute by way of appointing an expert instead, it moved the High Court for appointment of an arbitrator.6. In support of the application for appointment of arbitrator, it was contended before the learned designated Judge that as the claims for recovery of arrears had not been settled and the respondents therein had communicated that the claims came within the ambit of sub-clause (a) of clause 9.3 of the agreement and required the matter to be dealt with by an expert and an expert should be appointed in terms of clause 16.2 and 16.4 of the agreement and declined to take recourse to arbitration, it had become incumbent to move the court for appointment of an arbitrator.7. The said stand and stance put forth by the respondent before the High Court was resisted by the present appellants that disputes would come within clause 16.2 of the agreement that deals withch provides a specific mechanism and not arbitration, for it has been clearly postulated therein that where any dispute is not resolved as provided for in clause 16.2 then only the matter shall be submitted to arbitration at the request of either of the parties by written notice in accordance with the provisions contained in the Act.8. The High Court adverted to the meanings ofg year,nd various terms used in the agreement, scanned the anatomy of clause 9.3 of the agreement that deals withnd arrived at the conclusion that disputes raised do not come within the purview of sub-clause (a) of clause 9.3 and, accordingly, appointed an arbitrator, as has been stated hereinbefore.

Court's reasoning:
43. In course of hearing we have been apprised that the learned Arbitrator has adjourned the matter to 13.12.2013 for filing counter affidavit/claim by the appellants and it has been submitted by Mr. Ranjit Kumar that it would not be possible for the appellants to file the counter affidavit/claim or objections to the claim by that date. Mr. Harish Salve, learned senior counsel appearing for the respondent, fairly stated that this Court may take note of the concession given by him that the learned Arbitrator should grant sixtime commencing 13.12.2013 for filing the counter affidavit/counter claim/objections. In view of the concession given, the time stands extended. We have also been told that the learned Arbitrator has fixed the schedule for adjudication of the disputes. We would request the learned Arbitrator to re-schedule the dates as we have extended the time for filing of counter affidavit/claim by the appellants.