Global Cane Sugar Services Private Limited vs. Rajasthan State Ganganagar Sugar Mills Limited

This Arbitration Application has been filed under Sections 11 & 11(6) of the Arbitration & Conciliation Act, 1996 (hereinafter referred to as 'the A&C Act'), by the applicant for appointment of an Arbitrator seeking to adjudicate its claim of Rs.3,06,70,785/- + GST of Rs.1,02,73,766/- (total dues of Rs.4,09,44,551/-) and the interest @ 12% per annum against the respondents in relation to the work order of operation, maintenance and repairing of Sugar Factory with manpower and material under the agreement dated

The respondents, in the reply to the Arbitration Application, has admitted the factum of the issuance of Notice Inviting Tenders (NIT) dated 24.01.2020 for Operation and Maintenance of Sugar Factory with manpower and material (Consumables, Spares Parts, Fuel, Packing Materials) at Chak 23-F, Kaminpura, Sriganganagar, Rajasthan, and issuance of letter of intent dated 16.09.2020 in favour of the applicant being declared as successful bidder. The respondents have also admitted execution of the agreement dated 07.10.2020 with the applicant in respect of aforesaid work order, but contended that the respondents had paid to the applicant- Company all the due amounts, and final settlement of dues had arrived at in the meeting held on 15.09.2023 at Head Office of the respondents at Jaipur. Thus, according to the respondents, there are no outstanding dues payable to the applicant against this contract and the claim made by the applicant is not sustainable.

Having considered the rival pleadings of both the parties, it appears that execution of the agreement dated 07.10.2020 between the applicant and the respondents is an admitted fact and the claim for the outstanding dues put forth by the applicant and sought to be referred to Arbitration, also arises out of such agreement. A copy of the agreement is available on record as Annexure-5. This agreement contains an arbitration agreement between parties to refer the dispute to Sole Arbitrator in Clause-8, which reads as under:-

It is further undisputed that before filing of this Arbitration Application, the applicant served a legal notice dated 17.01.2024 (Annexure-10), upon the respondents, seeking appointment of an Arbitrator as per the arbitration agreement, but the respondents have not appointed any Arbitrator. Hence, this Arbitration Application has been filed after expiry of 30 days, on 19.03.2024. 5. The High Court being a referral Court, while exercising its powers under Section 11 of the A&C Act, 1996, is expected to look into the matter as to existence of an arbitration agreement between parties in view of clause 11(6A) of the A&C Act,1996 which reads as under:- “(6A) The Supreme Court or, as the case may be, the High Court, while considering any application under sub-section (4) or sub-section (5) or sub-section (6), shall, notwithstanding any judgment, decree or order of any Court, confine to the examination of the existence of an arbitration agreement.”

A seven judges’ Bench of the Hon’ble Supreme Court in recent judgment dated 13th December 2023, delivered In Re: Interplay Between Arbitration Agreements Under The Arbitration and Conciliation Act 1996 And the Indian Stamp Act, 1989 [AIR 2024 SC 1], has observed in Para Nos.152 &

It may be noted that Section 11(6A) was added by the Legislature by introducing the Arbitration and Conciliation (Amendment) Act, 2015 (Act 3 of 2016), and there was an impression that the provision of Section 11(6A) has been omitted vide Arbitration and Conciliation (Amendment) Act, 2019 (Act 33 of the 2019), but the present prevailing position about such proposition of law, has been clarified by the seven judges’ Bench of the Apex Court in the above referred judgment recently delivered on 13th December 2023. 8. Finally, this Court comes to the conclusion that a written arbitration agreement exists between the parties, and the

Accordingly, the Arbitration Application succeeds and this Court constitutes Arbitration Tribunal of Sole Arbitration of Mr. Vishnu Dutt Sharma, (Retired District & Sessions Judge), Mobile No.9414376586, Email-vdssharmaadj@gmail.com, Address: 114, N-Block, Second Floor above State Bank of India, Sri Gangangar , to adjudicate the dispute between parties in accordance with the provisions of the Arbitration and Conciliation Act, 1996. 10. The appointment of the Sole Arbitrator is subject to the declarations being made under Section 12 of the Arbitration & Conciliation Act, 1996 with respect of independence and impartiality, and the ability to devote sufficient time to complete the arbitration within the prescribed period.

The arbitration fee to the Sole Arbitrator shall be payable in accordance with the provisions contained in the Manual of Procedure for Alternative Dispute Resolution, 2009 as amended by the Manual of Procedure for Alternative Dispute Resolution (Amendment), 2017 vide notification dated 23.03.2017 read with 4th Schedule appended to the Act of 1996. 12. The Registry is directed to intimate Arbitrator - Mr. Vishnu Dutt Sharma, (Retired District & Sessions Judge), for his approval and declaration in terms of Section 11(8) read with Section 12(1) of the A&C Act, 1996. 13. All other issues may be raised by the parties before the Arbitrator, which shall be considered in accordance with law.

Since as per Section 29A of the Arbitration and Conciliation Act, 1996, the arbitration proceedings are required to be concluded within scheduled time as stipulated therein, it is expected from the parties to appear before the Arbitrator on 30.09.2024 or any other date as informed by the Arbitrator to parties or agreed between parties with the consent of Arbitrator, and further parties shall provide their respective E-mail/ Contact Number/ Mobile Number as also of their authorized representatives/lawyers, appearing on their behalf before the Arbitration Tribunal, in order to facilitate the Arbitrator to send information to the parties, whenever required. The information send by the Arbitrator, on such address/ E-mail/ cellphone of the parties/ their authorized representatives/lawyers, shall be treated as sufficient unless same is not changed.

The Arbitration Applications stand disposed of. (SUDESH BANSAL),J SUNIL SOLANKI /73