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Judgment
Sanjay Kishan Kaul, C.J.
CM-23281-CII-2013
Application is allowed subject to all just exceptions.
CM-23282-CII-2013
Leave is granted to place on record the reply of respondents No. 1 and 2 and the application is allowed.
ARB-102-2013
The petitioner, a registered partnership firm, entered into an agreement with the respondent/company dated 30.04.2011 out of a competitive bidding process for recovery of carbon cake from carbon slurry generated by the fertilizer plant of the respondents. The agreement contained clause 25 which is the arbitration clause. In terms of this clause, a written notice by either party to the contract has to be addressed for reference of disputes to arbitration of Chairman and Managing Director of the respondent or his/her nominee.
It is the case of the petitioner that on account of disputes arising out of the contract post completion of the contract, a notice dated 20.05.2013 was sent to the respondents invoking the arbitration clause, but to no effect, which has given rise to the present petition u/s 11 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the said Act).
Learned counsel for the respondents has raised two fold submissions to resist the petition:-
(i) The notice dated 20.05.2013 addressed to the Chairman-cum-Managing Director of the respondent could not be construed as a notice invoking arbitration.
(ii) There has already been full accord and satisfaction of the contract and there are no dues payable by the respondents.
In so far as the first issue is concerned, a perusal of notice dated 20.05.2013 shows that there is a clear reference to clause 25 of the contract with a prayer that arbitration "may please be allowed" as per the provisions of the said Act. This is followed by the averment that the detailed list of claims and other relevant records shall be made available to the learned arbitrator as and when required.
Learned counsel for the respondents submits that this has not been addressed to the respondents, but to the Chairman-cum-Managing Director who is the arbitrator or his nominee could be the arbitrator.
I am unimpressed by this argument for the reason that the notice is addressed to the respondents, albeit through the Chairman-cum-Managing Director. The wording of the notice is quite clear and amounts to invocation of the arbitration clause and, thus, the designated person being the Managing Director was either required to act as arbitrator himself or to appoint his nominee as the arbitrator which he failed to do.
In so far as the second plea is concerned, the same is predicated on a document Annexure R3 filed alongwith the reply of the respondents dated 27.02.2013 which reads as under:-
To
The Dy. General Manager (T.S.) NFL, Bathinda.
Reference:- Your LOI No. NFL/DGM/TS/Sale of Carbon Cake/Nil dated 30.03.2011.
Subject:- Request for refund of Bank Guarantee No. 1813ILG003111 dated 08.04.2011 for Rs. 25,00,000/- issued by Punjab National Bank, Arya Samaz Chowk, Bathinda.
It is humbly submitted that the contract has completed and all the accounts with NFL with respect to the contract have been settled.
So you are kindly requested to refund the noted Bank Guarantee at the earliest.
Thanking you.
Sd/- Rupinder Singh Partner Super Trading Corporation Bathinda.
It is, thus, the submission of learned counsel for the respondents that this letter is actually of its own accord issued by the petitioner and amounts to settlement of all accounts inter se the parties qua the contract whereafter request was made for release of bank guarantee. The claim raised after more than three months is only an afterthought.
As to whether a document amounts to a complete accord or satisfaction, in my view, would depend upon the facts of each case. A reading of the letter no doubt shows that as per the own statement made by the petitioner, the contract stood completed and accounts with the respondents pertaining to the contract had been settled with the request to release the bank guarantee. The bank guarantee was thereafter refunded and it is only thereafter that the invocation letter for arbitration was sent.
The only explanation given by learned counsel for the petitioner is that the petitioner is claiming losses on account of the fact that there were leakages and theft of carbon slurry at Panipat unit of the respondents with the result that the prices went down and, thus, the contract with the petitioner was affected by the conduct of the officers of the respondents which entitled the petitioner to claim damages.
Firstly, this document has not even been pleaded in the petition. The petitioner was duty bound to have disclosed this document which has been concealed. Secondly, if what the petitioner states was the correct position, then this document could have been explained and the circumstances in which it was stated to have been set out which has not been done. The present case is not the one where there is any formatted or printed document of the respondents signed by the petitioner which is disputed on account of economic duress or pressure. Once there is an independent document and that too issued by the petitioner giving full and final discharge qua the contract, the petitioner is not justified in invoking the arbitration clause as there was no arbitral dispute remaining for reference as held by the Hon''ble Supreme Court in Union of India (UOI) and Others Vs. Hari Singh,
I am, thus, of the view that there is no arbitral dispute left inter se the parties liable to be referred to arbitration as there has been full accord and satisfaction qua the rights and obligations of the parties in view of the communication of the petitioner dated 27.02.2013 which has not even been challenged or assailed by the petitioner and the endeavour now through this petition is only to rake up additional claims which is clearly an afterthought apart from the issue of concealment of material fact. The petition accordingly is dismissed with costs quantified at Rs. 5,000/-.