BINOJ JOSEPH and others v. KERALA VISION LTD.
Case Details & Bench
- Court
- High Court of Kerala
- Hon'ble Judges
- S. Siri Jagan
- Judgment Date
- 2011-11-04
- Court Decision / Holding
- The Arbitration Request is disposed of as above. The court appointed Mr. Justice M. Ramachandran as arbitrator to arbitrate the disputes between the parties; the arbitration proceedings are to be conducted under the pre-amendment clause.
- Final Disposition
- Arbitration Request disposed of; Arbitrator appointed.
Parties to the Case
Appellants / Petitioners
- BINOJ JOSEPH
- SIVAN A.
- SASEENDRAN A.
- CHANDRAN P.K.
- JAYARAJ A.
Respondents
- KERALA VISION LTD.
Legal Representation & Advocates
Counsels for Petitioners
- • Sri. P. Radhakrishnan
- • Sri. Madhu Radhakrishnan
Counsels for Respondents
- • Sri. K.S. Bharathan
Case Synopsis & Summary
This is an arbitration petition filed by five shareholders of Kerala Vision Ltd seeking appointment of an arbitrator to adjudicate disputes under a clause in the company’s Memorandum of Association. Clause 15 of Annexure A3 empowers arbitration for disputes between the company and its members or third parties. The applicants rely on a Division Bench decision in Arbitration Appeal No.1/2008 (Annexure A2) upholding the arbitration clause and contend that Annexure A4 notice dated 13 September 2010 disclosed an arbitrable dispute even though subsequent amendments to the clause allegedly deleted the arbitral reference, which came into effect on 16 October 2010. The respondent contends that the arbitration clause was amended, erasing any arbitration agreement, and cites Skypark Builders & Distributors v. Kerala Police Housing and Construction to argue that such clauses cannot be treated as arbitration clauses. The court examines the clause, notes the prior Division Bench finding, and finds that the dispute arose when the arbitration clause existed, despite later amendments. It concludes there is an arbitration clause and rejects the objection based on the amendment. Consequently, the court appoints Mr. Justice M. Ramachandran as arbitrator to arbitrate the disputes, disposing of the arbitration petition accordingly. The decision emphasizes the primacy of the pre-amendment arbitration clause in determining arbitrability.
Provisions of Law Cited
Legal Doctrines & Maxims
- Balance of convenience
- Arbitrability of disputes (arbitration clause)”] ,
- parties_widths
- parties
- respondents
- applicants
- Respondents
- Applicants
- lawyers
- applicants
- Sri. P. Radhakrishnan; Sri. Madhu Radhakrishnan
- respondents
- Sri. K. S. Bharathan
- arguments
- applicants
- The applicants contend that the arbitration clause in Annexure A3 is valid and, having been upheld by a Division Bench in Arb. Appeal No.1/2008, disputes between the company and its members can be referred to arbitration. They issued Annexure A4 notice on 13.09.2010 seeking arbitration and argue that the amendment deleting the clause came into force only on 16.10.2010, thus the arbitration clause existed at the time the dispute arose. They submit the respondent cannot resist arbitral reference on the ground of amendment and point out that Annexure A4 disputes are arbitrable under the contract. They urge appointment of an arbitrator (Mr. Justice M. Ramachandran) and contend that arbitration proceedings should proceed expeditiously.
- respondents
- The respondents challenge the very existence of an arbitration clause on the ground that Clause 15 was amended by the Companies Act and thus no arbitration clause remains. They rely on Skypark Builders & Distributors v. Kerala Police Housing and Construction to argue that such clauses cannot be treated as arbitration clauses. They contend Annexure A4 contains merely requests, not arbitral disputes, and disputability of those requests is a prerequisite for reference. They assert the amendment came into force after the dispute was raised and that the party cannot rely on the pre-amendment clause to compel arbitration. They urge dismissal of the arbitration petition or, at least, a challenge to arbitrability before the Arbitrator.
- arguments
- applicants
- The applicants maintain the arbitration clause exists and was previously upheld by a Division Bench; they argue the amendment deleting the clause does not erase an arbitration clause that existed at the time of the dispute. They argue that the dispute notice demonstrates arbitrability and that the court should appoint an arbitrator, particularly given the Division Bench decision in Arb. No.1/2008. They emphasize that the disputes listed in Annexure A4 are within the ambit of the arbitration clause and that any challenge should be addressed before the Arbitrator, not as a bar to arbitration.
- respondents
- The respondents contend there is no valid arbitration clause due to amendment under the Companies Act and cite Skypark Builders to show such clauses cannot be arbitration clauses. They argue that Annexure A4 requests do not amount to arbitrable disputes and that arbitration should not proceed. They assert any validity should be determined by the Arbitrator, not the court, and that the amendment creates a lack of arbitrability.
- court_decision
- The Arbitration Request is disposed of with the appointment of Mr. Justice M. Ramachandran as arbitrator to arbitrate the disputes between the parties. The arbitration proceedings should proceed under the pre-amendment clause, and the petition is disposed of accordingly.
- bench
- Single Judge
- case_disposition
- Arbitration Request disposed of; Arbitrator appointed.
- cited_cases
- [{
- cited_case_name
- Skypark Builders & Distributors v. Kerala Police Housing and Construction
- citation_number
- 2003 (1) KLT 445
- treatment
- Distinguished
- explanation
- The judgment in Skypark held that such clauses cannot be considered as arbitration clauses; however, the present case finds an existing arbitration clause at the time of dispute and distinguishes the Skypark reasoning.
Submissions & Arguments
Contentions of Appellants / Petitioners
The applicants contend that the arbitration clause in Annexure A3 is valid and was upheld by a Division Bench (Arb. Appeal No.1/2008). They relied on Annexure A4 notice dated 13.09.2010 showing an arbitrable dispute before the 16.10.2010 amendment deleting the clause. They argue that amendment came into force later and cannot extinguish a pre-existing arbitration clause; they maintain that Annexure A4 enumerates disputes arising under the contract and are arbitrable; they request appointment of arbitrator and reference to the same arbitrator as in Arb. O.P. No.28/2010.
Contentions of Respondents
The respondents dispute the existence of an arbitration clause, arguing that the clause was deleted by amendment under the Companies Act. They reference Skypark Builders & Distributors v. Kerala Police Housing and Construction to support the view that such clauses cannot be treated as an arbitration clause. They contend that Annexure A4 contains only requests, not arbitrable disputes, and the issue of arbitrability must be decided before an Arbitrator.
Cited Precedents (1)
| Case Name | Citation | Treatment | Explanation |
|---|---|---|---|
| Skypark Builders & Distributors v. Kerala Police Housing and Construction | 2003 (1) KLT 445 | Distinguished | The court notes Skypark's holding that such clauses cannot be treated as arbitration clauses, and distinguishes it from the present case where the clause existed at the time of the dispute and was upheld by a Division Bench. |
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