Cyril Jacob Vellappally v. Dr. Ashly Thomas Jacob Mulamoottil Group and Rajenesh Clement

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR. JUSTICE DEVAN RAMACHANDRAN TUESDAY, THE 3[RD] DAY OF AUGUST 2021 / 12TH SRAVANA, 1943** **AR NO. 87 OF 2019** ## **PETITIONER:** CYRIL JACOB VELLAPALLY CHIEF EXECUTIVE AND PROPRIETOR, JACOB VELLAPALLY AND CO, 2ND FLOOR, PULICKAL TRADE CENTRE, MC ROAD, NAGAMPADOM, SH MOUNT P O, KOTTAYAM-686006. BY ADVS. B.ASHOK SHENOY SRI.K.V.GEORGE SRI.P.N.RAJAGOPALAN NAIR SRI.P.S.GIREESH SRI.RIYAL DEVASSY ## **RESPONDENTS:** 1 DR.ASHLY THOMAS JACOB MULAMOOTTIL GROUP, MARKET ROAD, KOZHENCHERRY-689641. 2 RAJENESH CLEMENT, ARCHITECT, HOMETECH CONSULTANT ENGINEERS, BHAVANA APARTMENTS, ALTHARA ROAD, VELLAYAMBALAM, THIRUVANANTHAPURAM-695010. BY ADV SRI.ARUN.B.VARGHESE THIS ARBITRATION REQUEST HAVING COME UP FOR ADMISSION ON 03.08.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: **AR NO. 87 OF 2019** **2** ## **O R D E R** This Arbitration Request has been filed by the petitioner claiming to be the Chief Executive Officer and Proprietor of a Firm by name “Jacob Vellappally” & Co.; and asserts that he had entered into Annexure A2 agreement with the respondents for construction of a Commercial Complex. The petitioner alleges that several disputes have now arisen between him and the respondents relating to and touching upon the terms of the said agreement and that therefore, he had no other option, but to notify them through Annexure A13, invoking the provisions of the Arbitration and Conciliation Act, 1996 (Act for short) since, as per Clause III (4) of Annexure A2 agreement, it is agreed by the parties that every dispute between them touching upon the contract will be resolved only through an arbitration proceedings. 2. The petitioner then submits that, however, since Clause III(4) of Annexure A2 agreement provides that the sole Arbitrator shall only be the 2[nd] respondent, who is a consultant appointed by both parties under the terms of the Agreement, this **AR NO. 87 OF 2019** **3** Court will be now enjoined, going by the declaration of law by the Hon'ble Supreme Court in _**TRF ltd. v. Energo Engineering Projects Ltd.**_ [2017 (8) SCC 377], to appoint another Arbitrator; and thus prays that this request be so ordered. 3. The afore submissions made on behalf of the petitioner by his learned counsel – Sri.B.Ashok Shenoy, were controverted by Sri.Arun Varghese – learned counsel appearing for the respondents, pointing out that a counter affidavit has been filed on behalf of the 1[st] respondent. He contented that, since the Tender Schedule submitted by the petitioner – consequent to which Annexure A2 agreement was entered into – contained a Clause that every dispute arising out of the Agreement can only be brought for resolution before the Courts in Pathanamthitta District, this Arbitration Request is not maintainable. He further submitted that, in any event of the matter, since the arbitration clause in Annexure A2 agreement provides that the consultant of the parties, who is the 2[nd] respondent herein, shall be the sole Arbitrator, same looses the legal sanctity and therefore, that no **AR NO. 87 OF 2019** **4** action based on it, can be now taken forward. He thus prayed that this Arbitration Request be dismissed. 4. I have evaluated the afore rival contentions of the parties very carefully and closely. 5. The contentions of the respondents against invocation of the Act by the petitioner are two fold: For the first, they say that only the Courts in Pathanamthitta have jurisdiction to entertain the disputes between them; and for the second, that the 2[nd] respondent, who is the consultant of the parties, cannot act as the sole Arbitrator. 6. As regards the 1[st] contention, I am afraid that I cannot find favour with the respondents at all because what is stated in the Agreement is that all the disputes shall be resolved by the Courts in Pathanamthitta and this obviously refers only to the Civil Courts. As far as the Arbitration proceedings are concerned, it is irrefragable that no Court in Pathanamthitta obtain any power under Section 11 of the Act; and, therefore, I repel the same finding it have no legs to stand on in law. **AR NO. 87 OF 2019** **5** 7. As far as the 2[nd] contention is concerned, since it is admitted that 2[nd] respondent has been appointed as the consultant by both parties, obviously he cannot act as an Arbitrator, nor can he appoint or nominate one, going by the rigour of the declarations of law in _**TRF Ltd. (Supra).**_ However, this does not mean that the Arbitration Agreement fails because of that reason, since the parties are in unison that the disputes between them will have to be resolved through the mechanism of arbitration. It thus becomes indubitable that this Court is now obligated to appoint a suitable Arbitrator to adjudicate and decide the disputes between them. 8. On being aware of the mind of this Court, the learned counsel appearing for the respondent submitted that if this Court is inclined to appoint a sole Arbitrator other than the 2[nd] respondent, then all issues may be left open to be decided by the said Authority, including the question as to whether he has the jurisdiction to entertain the claims of the petitioner. 9. It is needless to say that when this Court acts under **AR NO. 87 OF 2019** **6** Section 11 of the Arbitration and Conciliation Act, the realm of the factual disputes is never in consideration, but only as to whether the Arbitration Agreement is valid and whether there is a binding arbitration Clause. 10. Since both these factors have been demonstrated in this case, I am certain that this Court can move forward, under the sanction of Section 11(6)(A) of the Act. Resultantly, this Arbitration Request is allowed in the following manner: (a) I nominate Smt.Lizamma Augustine, Moonjappilly, Providence Road, Kochi-682018, as the sole Arbitrator, to adjudicate and resolve the disputes and differences between the parties to this case arising from Annexure A2 agreement. (b) The Registry is directed to communicate a copy of this order to the learned Arbitrator within a period of one week from today and to obtain a Statement of Disclosure from her under Section 11(8) read with Section 12(1) of the Arbitration and Conciliation Act, 1996. **AR NO. 87 OF 2019** **7** (c) Once the Disclosure Statement is obtained from the learned Arbitrator, the Registry shall release the certified copy of this order, with a copy of the said statement appended to it, retaining the original of the same on the files of this case. (d) The fees of the Arbitrator shall be governed by the Fourth Schedule of the Arbitration and Conciliation Act, 1996. (e) The parties to this case are _ad idem_ that they will share the arbitration costs and fees equally and it is so recorded. (f) In order to enable the Arbitrator to commence the proceedings without delay, I direct the parties to mark appearance before her at 11.00 a.m. on 10.09.2021. Sd/- ## **DEVAN RAMACHANDRAN** ## **JUDGE** MC/SAS **AR NO. 87 OF 2019** **8** ## **APPENDIX OF AR 87/2019** |PETITIONER'S ANNEXURE|| |---|---| |ANNEXURE A1|TRUE COPY OF WORK ORDER DATED 5.3.2014| ||EXECUTED BY PETITIONER AND 1ST RESPONDENT| ||ALONG WITH 2ND RESPONDENT| |ANNEXURE A2|TRUE COPY OF OF AGREEMENT DATED 5.3.2014| ||EXECUTED BY PETITIONER AND 1ST RESPONDENT| ||ALONGWITH 2ND RESPONDENT.| |ANNEXURE A3|TRUE COPY OF THE PRINT OUT OF THE EMAIL| ||DATED 17.11.2017 SENT BY PETITIONER TO 2ND| ||RESPONDENT ALONG WITH THE COPY OF THE FINAL| ||BILL OF PETITIONER TO 2ND RESPONDENT| ||ATTACHED THEREWITH.| |ANNEXURE A4|TRUE COPY OF THE PRINT OUT OF TH EMAIL DATED| ||2.2.2018 SENT TO PETITIONER BY 2ND| ||RESPONDENT ALONG WITH THE TRAILING MAIL| ||DATED 23.1.2018 SENT BY 2ND RESPONDENT TO| ||1ST RESPONDENT.| |ANNEXURE A5|TRUE COPY OF THE PETITIONERS FINAL BILL,| ||DULY CERTIFIED AND PASSED FOR PAYMENT BY 2ND| ||RESPONDENT, BEARING 2ND RESPONDENTS| ||ENDORSEMENT THEREOF.| |ANNEXURE A6|TRUE COPY OF THE LETTER NO.JVC/A-17/2015/09| ||DATED 15.05.2018 ISSUED BY PETITIONER TO 1ST| ||RESPONDENT WITH COPY TO 2ND RESPONDENT.| |ANNEXURE A7|TRUE COPY OF COURIER RECEIPT NO. 318830| ||DATED 24.05.2018 ISSUED BY PROFESSIONAL| ||COURIERS TO PETITIONER| |ANNEXURE A8|TRUE COPY OF COURIER RECEIPT NO. 318831| ||DATED 24.05.2018 ISSUED BY PROFESSIONAL| ||COURIERS TO PETITIONER| |ANNEXURE A9|TRUE COPY OF POSTAL COVER RETURNED UNSERVED| ||ON 1ST RESPONDENT.| **AR NO. 87 OF 2019** **9** |ANNEXURE A10|TRUE COPY OF LETTER DATED 7.6.2018 ISSUED BY| |---|---| ||PETITIONER TO 1ST RESPONDENT WITH COPY TO| ||2ND RESPONDENT ALONGWITH TWO POSTAL RECEIPTS| ||IN PROOF OF ITS POSTING.| |ANNEXURE A11|TRUE COPY OF POSTAL ACKNOWLEDGMENT CARD| ||SIGNED BY 2ND RESPONDENT.| |ANNEXURE A12|TRUE COPY OF POSTAL COVER RETURNED UNSERVED| ||ON 1ST RESPONDENT.| |ANNEXURE A13|TRUE COPY OF NOTICE DATED 23.11.2018 ISSUED| ||BY PETITIONER TO RESPONDENTS ALONGWITH THE 2| ||POSTAL RECEIPTS ATTACHED THEREWITH.| |ANNEXURE A14|TRUE COPY OF POSTAL COVER RETURNED UNSERVED| ||ON 1ST RESPONDENT.| |RESPONDENTS' EXHIBITS:|| |ANNEXURE R1A|TRUE COPY OF THE RELEVANT PORTION OF THE| ||TENDER SCHEDULE SUBMITTED BY THE PETITIONER| ||TO THE 1ST RESPONDENT| |ANNEXURE R1B|TRUE COPY OF EMAILS SEND BY THE 1ST| ||RESPONDENT TO THE PETITIONER|