M/S. COCHIN SMART CITY PROPERTIES PVT. LTD. v. M/S. TRADERS TOWER CONSTRUCTIONS AND PROPERTY DEVELOPERS PVT. LTD.

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** **THE HONOURABLE MR. JUSTICE P.B.SURESH KUMAR** **WEDNESDAY, THE 8TH DAY OF JUNE 2016/18TH JYAISHTA, 1938** ## **AR.No. 5 of 2016 ()** **--------------------** **PETITIONER(S):** **-----------------------** **M/S. COCHIN SMART CITY PROPERTIES PVT. LTD., PEEVEES TRITON, MARINE DRIVE, COCHIN-682 031, REPRESENTED BY ITS DIRECTOR, MR.P.P. JOSE.** **BY ADVS.SRI.SHYAM PADMAN, SRI.C.M.ANDREWS, SRI.S.K.SAJU, SMT.BOBY M.SEKHAR.** **RESPONDENT(S):** **-------------------------** **M/S. TRADERS TOWER CONSTRUCTIONS AND PROPERTY DEVELOPERS PVT. LTD., BUILDING NO.5/3410, T15, 1ST FLOOR, ADMINISTRATIVE OFFICE, RP MALL, MAVOOR ROAD, KOZHIKODE-673 004, REPRESENTED BY ITS MANAGING DIRECTOR, MR.RAVINDRAN PILLAI BALAKRISHNA PILLAI.** **BY ADVS. SRI.M.GOPIKRISHNAN NAMBIAR, SRI.P.GOPINATH, SRI.P.BENNY THOMAS, SRI.K.JOHN MATHAI, SRI.JOSON MANAVALAN, SRI.KURYAN THOMAS.** **THIS ARBITRATION REQUEST HAVING BEEN FINALLY HEARD ON 02-06-2016, THE COURT ON 08/06/2016 PASSED THE FOLLOWING:** rs. ## **AR.No. 5 of 2016** ## **APPENDIX** ## **PETITIONER'S ANNEXURES:-** **ANNEXURE A COPY OF THE MEMORANDUM OF UNDERSTANDING DATED 17/02/2010 ENTERED BETWEEN PETITIONER AND RESPONDENT.** **ANNEXURE B COPY OF THE ADDITIONAL MEMORANDUM OF UNDERSTANDING DATED 19/08/2010 ENTERED BETWEEN PETITIONER AND RESPONDENT. ANNEXURE C COPY OF THE MEMORANDUM OF UNDERSTANDING DATED 24/08/2010 ENTERED BETWEEN PETITIONER AND M/S. JOY ALUKKAS INDIA PVT. LTD.** **ANNEXURE D COPY OF THE SUPPLEMENT AGREEMENT DATED 17/02/2011 ENTERED BETWEEN PETITIONER AND RESPONDENT.** **ANNEXURE E COPY OF THE LAWYERS NOTICE DATED 05/06/2014 ISSUED TO THE RESPONDENT.** **ANNEXURE F COPY OF THE ARBITRATION O.P.124 OF 2014 FILED BEFORE THE PRINCIPAL DISTRICT COURT, KOZHIKODE. ANNEXURE G COPY OF THE INTERIM ORDER DATED 17/06/2014 PASSED BY THE ADDITIONAL DISTRICT SESSIONS JUDGE-IV, KOZHIKODE. ANNEXURE H COPY OF THE COMMISSION REPORT DATED 23/01/2015.** **ANNEXURE I COPY OF THE REPORT ON ASSESSMENT OF INTERIOR WORKS DONE AT THE DISPUTED PREMISE PREPARED BY THE EXPERT ENGINEER DATED 22/01/2015.** **ANNEXURE J COPY OF THE REPLY DATED 25/06/2014 ISSUED BY THE RESPONDENT'S COUNSEL.** **ANNEXURE K COPY OF THE WRITTEN STATEMENT FILED BY THE RESPONDENT IN ARBITRATION O.P. NO.124/2014.** **RESPONDENT'S ANNEXURES:NIL.** **//TRUE COPY//** **P.S. TO JUDGE** rs. ## **P.B.SURESH KUMAR, J.** ## **-----------------------------------------------** ## **Arbitration Request No. 5 of 2016** ## **-----------------------------------------------** ## **Dated 8[th] June, 2016.** ## **O R D E R** This is an Arbitration Request filed under Section 11 of the Arbitration and Conciliation Act. 2. The petitioner and the respondent had entered into Annexure-A Memoradum of Understanding on 17.2.2010 by which the respondent had agreed to lease out to the petitioner the entire built up area of a proposed building along with the open space around the proposed building. The Memorandum prescribes the manner in which the building is to be constructed. By Annexure-B dated 19.8.2010, the petitioner and the respondent had modified the terms of Annexure-A Memorandum of Understanding. Annexure-D was the agreement entered into between the petitioner and the respondent in furtherance to Annexures-A and B Memorandums of Understanding. The case of the petitioner is that though A.R.No.5 of 2016 2 they had called upon the respondent to resolve the disputes between them concerning the subject matter of the aforesaid Memorandums of Understanding and the agreement by recourse to arbitration, the respondent is not agreeing to the said course. Annexure-E is the notice of dispute caused to be issued to the respondent by the petitioner. Annexure-E notice was issued relying on clause 20 of Annexure-A Memorandum of Understanding. The petitioner, therefore, prays for an order appointing an Arbitrator to resolve the disputes between them and the respondent. 3. The respondent has filed a counter affidavit in the matter. Though various contentions were raised in the counter affidavit, the only contention pressed by the learned counsel for the respondent at the time of hearing was that the only obligation of the respondent as per the terms of AnnexureA Memorandum of Understanding was to hand over possession of the built up area to the petitioner and the said obligation has already been discharged by the respondent. According to the learned counsel for the respondent, the disputes now raised by A.R.No.5 of 2016 3 the petitioner are disputes coming within the scope of Annexure-C agreement entered into between the parties and that there is no arbitration clause in Annexure-C agreement. As such, according to the learned counsel, the petitioner is not entitled to the relief claimed in this proceedings. ## 4. Clause 20 of Annexure-A Memorandum of Understanding reads thus: “It is further agreed by both of the parties that any disputes and differences whatsoever arising under this MOU, including the enforcement of the rights, duties, powers and obligations conferred under this MOU, which could not be settled by the Parties through negotiations, after the period of 30 (thirty) Business Days from the service of the Notice of Dispute, shall be finally settled by arbitration by a sole arbitrator to be appointed by the Parties on mutual consent in accordance with the Arbitration and Conciliation Act, 1996. All arbitration proceedings shall be conducted in English/Malayalam. The venue of arbitration shall be Cochin. The order of the arbitrator shall be final and binding on both Parties.” A close reading of Clause 20 of Annexure-A Memorandum of Understanding indicates that the obligation of the respondent in the said Memorandum was to hand over possession of the building constructed in accordance with the terms incorporated A.R.No.5 of 2016 4 in the Memorandum. It is seen that the first party could not complete the construction of the building as agreed to in Annexure-A Memorandum of Understanding and consequently Annexure-B Memorandum of Understanding was entered into between the parties by which the terms incorporated in Annexure-A Memorandum of Understanding were modified. It is seen that later Annexure-D agreement was entered into between the parties. A perusal of Annexure-D agreement indicates beyond doubt that the said agreement was also entered into between the parties in respect of the same subject matter modifying the terms of Annexures-A and B Memorandums of Understanding. Annexure-D refers to the earlier Memorandums of Understanding and provides that the terms of the same shall form part of the agreement. The relevant clause in Annexure-D agreement reads thus: “AND WHEREAS the Memorandum of Understanding executed on 17.2.2010 and the Additional Memorandum of Understanding dated 19.8.2010 shall form part of this agreement.” As such, there is no substance in the contention that Annexure- A.R.No.5 of 2016 5 D is an agreement entered between the parties independent of Annexures-A and B Memorandums of Understanding. 5. The learned counsel for the respondent, relying on **Lloyds Steel Industries Limited v. Oil & Natural Gas Corporation Limited** (AIR 1997 Bombay 337), contended that the parties to a contract can put an end to the contract as if it had never subsisted and can substitute it with a new contract governing their rights and obligations and that if the parties substitute the original contract with the new contract, the arbitration clause in the original contract perishes. There cannot be any dispute to the aforesaid proposition, but it applies only to a case where the parties enter into a new contract independent of the earlier one. As far as the present case is concerned, as noticed above, the new contract refers to the earlier contracts and provides that the terms of the earlier contracts shall form part of the new contract. The decision, in the circumstances, has no application to the facts of the present case. 6. There is also a dispute between the parties as A.R.No.5 of 2016 6 to the venue of arbitration. I do not think that there is any scope at all for a dispute as to the venue of arbitration as Clause 20 of Annexure-A Memorandum of Understanding categorically provides that the venue of arbitration shall be Cochin. In the result, the Arbitration Request is allowed and Retd. Justice K.Padmanabhan Nair, House No.34/2383-A, Panchajanyam, Mangattu Road, Mamangalam, Kochi - 682 025 is appointed as the Arbitrator. It is made clear that the venue of arbitration shall be Cochin. The Arbitrator shall commence the proceedings after notice to the parties. It is made clear that the Arbitrator is free to fix his remuneration. Sd/- ## **P.B.SURESH KUMAR, JUDGE.** tgs (true copy)