M/S UNICORP INTERNATIONAL LTD v. M/S KERALA STATE CASHEW DEVELOPMENT CORPN.LTD

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT :** **THE HONOURABLE MR. JUSTICE THOMAS P.JOSEPH** **FRIDAY, THE 14TH OCTOBER 2011 / 22ND ASWINA 1933** **OP(C).NO. 1881 OF 2011(O)** **---------------------------------------** **OS.270/2009 OF ADDITIONAL SUB COURT, KOLLAM** **....................** **PETITIONER:** **--------------------** **M/S.UNICORP INTERNATIONAL LTD, SUITE-9,99-WARWICK STREET,ROYAL LEAMINGTON SPA, WARWICKSHIRE CV 32 $ RB, GREAT BRITAIN,REP.BY AJESH.S.DATTANI,34 YRS,S/O.SURESH,8/101,WOOD VILLA NEAR CORPN OFFICE, BEACH P.O.,CALICUT** **BY ADV. SRI.T.R.ASWAS** **RESPONDENT(S):** **-------------------------** **M/S.KERALA STATE CASHEW DEVELOPMENT CORPN.LTD,KOLLAM REP BY ITS MANAGING DIRECTOR ,PIN-691001** ## **BY ADVOCATE SHRI C. UNNIKRISHNAN** **THIS OP (CIVIL) HAVING BEEN FINALLY HEARD ALONG WITH C.R.P. NO.451 OF 2011 ON 14/10/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** ## **O.P(C) NO.1881 OF 2011** ## **APPENDIX** ## **PETITIONER(S)' EXHIBITS:** **EXHIBIT P1** **INTERNATIONAL CONTRACT EXECUTED BY THE PARTIES.** **EXHIBIT P2** **SECTION 8 PETITION FILED BY THE PETITIONER IN THE COURT BELOW.** **EXHIBIT P3 IMPUGNED ORDER DATED 21.12.2010 DISMISSING EXHIBIT P2.** **EXHIBIT P4 TRUE COPY OF THE SALES & PURCHASE AGREEMENT CONTAINING THE ARBITRATION AGREEMENT EXECUTED BETWEEN PARTIES.** **EXHIBIT P5 TRUE COPY OF THE PETITIONER FILED BY THE PETITIONER/1[ST] DEFENDANT TO SET ASIDE THE EX PARTE DECREE.** ## **RESPONDENT(S)' EXHIBITS:** ## **NIL** ## **TRUE COPY** **P.S. TO JUDGE** ## **THOMAS P.JOSEPH, J.** **==================================== O.P(C) No.1881 of 2011 & C.R.P. No.451 of 2011 ==================================== Dated this the 14[th] day of October, 2011** ## **J U D G M E N T** The question urged for a decision is whether clause 17 of Exhibit P4, agreement entered into between the parties hereto in the matter of an international commercial transaction spell out an agreement to refer the dispute arising between them and out of the said contract or any matter arising out of or in relation to that contract to the arbitration? Learned Sub Judge, Kollam held that the relevant clause does not spell out any agreement for arbitration but conferred jurisdiction on the civil courts at Cochin/Kollam in the matter of dispute arising out of the contract and hence learned Sub Judge has jurisdiction to entertain the suit and proceed with it. 2. Parties are referred hereunder as petitioner and respondent as they are ranked in O.P(C) No.1881 of 2011. 3. Respondent filed O.S. No.270 of 2009 in the court of learned Additional Sub Judge, Kollam for realization of what it said, the excess money (said to be) paid to the petitioner pursuant ## **O.P(C) No.1881 of 2011 & C.R.P. No.451 of 2011** -: 2 :- to the aforesaid contract. It is not disputed that Ext.P4, international commercial contract was entered into between petitioner (acting through the second defendant in the suit) and the respondent. On dispute arising with respect to or in relation to that contract, respondent laid the suit against petitioner and the second defendant for recovery of money. In paragraph 2 of the plaint (Ext.P1) respondent referred to the execution of Ext.P4, agreement by itself and petitioner (acting through the second defendant, its agent). Respondent further stated that the second defendant is also responsible for the plaint claim because the contract is made by petitioner through the second defendant who is its agent for sale/purchase of goods for a merchant resident abroad. 4. Petitioner, on receipt of information about the institution of the suit appeared in the court of learned Sub Judge and filed I.A. No.637 of 2010 on 10.02.2010 under Section 8(1) of the Arbitration & Conciliation Act, 1996 (for short, “the Act”) contending that in view of the agreement entered into between the parties to refer the disputes arising out of the contract or any matter in relation to that contract, parties be referred to **O.P(C) No.1881 of 2011 &** **C.R.P. No.451 of 2011** **==> picture [41 x 10] intentionally omitted <==** arbitration and that the civil court has no jurisdiction to entertain the suit. That application was resisted by the respondent. Learned Sub Judge by Ext.P3, order dated 21.12.2010 held that there is no arbitration clause in the agreement requiring the parties to be referred to arbitration and that learned Sub Judge has jurisdiction to entertain the suit. On the day following the date of the impugned order (as I am told), petitioner applied for a copy of the order on I.A. No.637 of 2010. While I.A. No.637 of 2010 was pending, learned Sub Judge had passed order on 25.10.2010 directing petitioner and second defendant to file written statement within 20 days. I am told that petitioner filed an application for review of the said order, again placing reliance on the relevant clause in the contract which according to the petitioner required the parties to be referred to arbitration. On 10.01.2011, since petitioner and second defendant did not file written statement they were set ex parte and the case was posted on 24.01.2011. On 29.01.2011 learned Sub Judge passed an ex parte judgment and decree in favour of respondent and against petitioner and the second defendant. That was followed by petitioner filing I.A. No.2170 of 2011 to set aside the ex parte **C.R.P. No.451 of 2011** ## **O.P(C) No.1881 of 2011 &** -: 4 :- decree. A similar application was filed by the second defendant as well. In the affidavit in support of the application to set aside the ex parte decree as well, petitioner referred to I.A. No.637 of 2010 filed under Sec.8(1) of the Act and its dismissal on 21.12.2010, that on 10.01.2011 counsel for petitioner had submitted before the learned Sub Judge that a copy of the order dated 21.12.2010 on I.A. No.637 of 2010 though applied for on 22.12.2010 was not yet issued and that the said order is being challenged. Notwithstanding the above and petitioner being represented by counsel, petitioner was set ex parte. On 24.01.2011 also a similar submission including that a copy of the order dated 21.12.2010 on I.A. No.637 was not yet issued so as to challenge the same was made. But the court on 29.01.2011 passed the ex parte judgment and decree. By order dated 06.08.2011 learned Sub Judge set aside the ex parte judgment and decree against petitioner on condition of payment of costs of Rs.1,000/-. Petitioner deposited cost and the ex parte judgment and decree were set aside. The ex parte judgment and decree against the second defendant also was set aside. The challenge in the Original Petition is to the order dated 21.12.2010 on I.A. **C.R.P. No.451 of 2011** ## **O.P(C) No.1881 of 2011 &** -: 5 :- No.637 of 2010 whereby learned Sub Judge has refused to refer the parties to arbitration as requested by petitioner in the said application. Respondent challenges the order dated 06.08.2011 setting aside the ex parte judgment and decree against petitioner in C.R.P. No.451 of 2011. 5. Petitioner had not produced the original or a duly certified copy of the agreement along with I.A. No.637 of 2010 in the court below as required under Sec.8(1) of the Act. Instead, in the affidavit in support of I.A. No.637 of 2010 petitioner requested the court to exempt it from producing the agreement as the respondent had already produced the agreement along with the plaint. Section 8 of the Act mandatorily requires the party seeking reference to the arbitration to produce the original or a duly certified copy of it along with the application. The Supreme Court in **Atul Singh v. Sunil Kumar Singh** ([2008] 2 SCC 602 – paragraph 19) has held there, plaintiff had produced a copy of the agreement with the plaint that the party applying for reference to arbitration has to produce along with the application the original or a duly certified copy of the agreement. In the view of the above provision and decision, petitioner has produced a **C.R.P. No.451 of 2011** ## **O.P(C) No.1881 of 2011 &** -: 6 :- photocopy of the agreement certified by its counsel as true copy in O.P(C) No.1881 of 2011 vide I.A. No.16186 of 2011. The original of that agreement has already been produced by the respondent before learned Sub Judge with the plaint. I.A. No.16186 of 2011, in fairness is not opposed by the respondent. It is an admitted document. Hence I.A. No.16186 of 2011 is allowed and the agreement is marked as Ext.P4 (in O.P(C) No.1881 of 2011). 6. Learned counsel for petitioner contended that having regard to the preamble of the Act, relevant provisions of the said Act and clause 17 of Ext.P4, copy of the agreement executed between petitioner and the respondent, learned Sub Judge was not right in not referring the parties to arbitration. 7. In response it is contended by learned counsel for the respondent that there is no consensus ad idem between petitioner and the respondent to refer the disputes to arbitration and that clause 17 of Ext.P4, agreement is not sufficient to hold that parties have agreed to refer their disputes to arbitration. According to the learned counsel, the latter part of clause 17 of the agreement that parties are subject to the jurisdiction of civil **C.R.P. No.451 of 2011** ## **O.P(C) No.1881 of 2011 &** -: 7 :- courts at Cochin/Kollam, in Kerala, India only is eloquent indication that there was no 'agreement' to refer the disputes to arbitration but parties elected to settle their dispute in the civil courts at Cochin/Kollam. 8. I shall extract the relevant clause appearing in Ext.P4, agreement which is as under. |“17.|Arbitration:|Any dispute arising out| |---|---|---| |||of this contract or any| |||matter arising<br>out of| |||or in relation to this| |||contract will be subject| |||to Indian law and| |||subject to the| |||jurisdiction of civil| |||courts at Cochin/Kollam| |||in Kerala, India only”| The first question is whether the said clause amounts to an agreement between the petitioner and the respondent to refer their disputes to arbitration. 9. The preamble to the Act states that the United Nations Commission on International Trade Law (UNCITRAL) has **C.R.P. No.451 of 2011** -: 8 :- ## **O.P(C) No.1881 of 2011 &** adopted the UNCITRAL Model Law on International Commercial Arbitration in 1985, the General Assembly of the United Nations has recommended that all countries give due consideration to the said Model Law in view of the desirability of uniformity of law, law of arbitral procedures and the specific needs of international commercial arbitration practice, that the UNCITRAL has adopted the UNCITRAL Conciliation Rules in 1980, that the General Assembly of the United Nations has recommended the use of the said Rules in cases where a dispute arises in the context of international commercial relations and the parties seek an amicable settlement of that dispute by recourse to conciliation, that the said Model Law and Rules make significant contribution to the establishment of a unified framework for the fair and efficient settlement of disputes arising in international commercial relations, that it is expedient to make law respecting arbitration and conciliation taking into account the aforesaid Model Law and Rules and that in the circumstances, the Parliament has enacted the Act in the year, 1996 whereby it has consolidated and amended the law relating to domestic arbitration, international commercial arbitration and enforcement of foreign arbitral awards **C.R.P. No.451 of 2011** ## **O.P(C) No.1881 of 2011 &** **==> picture [41 x 10] intentionally omitted <==** as also to define the law relating to conciliation and for matters connected therewith or incidental thereto. 10. Unlike the Arbitration Act 1940 (for short, “the Act of 1940”) which dealt with only domestic arbitration, the Act (of 1996) makes a cardinal change in that the latter Act is not confined to domestic arbitration alone – it takes in its fold international commercial arbitration, enforcement of foreign arbitrarl awards defines the law relating to conciliation and matters connected therewith or incidental thereto in the view of UNCITRAL Model Law on international commercial arbitration. 11. Section 2(1)(a) of the Act defines 'Arbitration' as meaning any arbitration whether or not administered by permanent arbitral institution and clause (b) defines ‘arbitration agreement’ as meaning an agreement referred to in Sec.7. Section 2(1)(f) of the Act defines ‘international commercial arbitration’ as meaning “an arbitration relating to disputes arising out of legal relationship, whether contractual or not, considered as commercial under the law in force in India and where at lest one of the parties is of the category referred to in clauses (i) to (iv). It is not disputed before me that petitioner is a company incorporated in the United Kingdom. Petitioner thus comes in **C.R.P. No.451 of 2011** ## **O.P(C) No.1881 of 2011 &** -: 10 :- the category of sub clauses (ii) and (iii) of clause (f) of Sec.2(1) of the Act. 12. Reference can also be made to Sec.7 of the Act to understand what is an 'arbitration agreement'. The said provision says that ‘arbitration agreement’ means an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship whether contractual or not. Sub-sec.(2) of Sec.7 says that an arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement. Sub-sec.(3) requires an arbitration agreement to be in writing. Sub-clause (4) says that arbitration agreement is in writing if it is contained in; (a) a document signed by the parties; (b) by exchange of letters, telex, telegrams or other means of telecommunication which provides a record of agreement; or (c) by exchange of statements of claims and defence in which the existence of the agreement is alleged by one party and not denied by the other. Sub-sec.(5) states that reference in a contract to a document containing an arbitration clause constitutes an arbitration agreement if the contract is in writing **O.P(C) No.1881 of 2011 &** **C.R.P. No.451 of 2011** -: 11 :- and the reference is such as to make that arbitration clause part of the contract. 13. An arbitration agreement need be in writing. It is not necessary that it should be signed by both or either of the parties. It is sufficient that the written agreement is orally accepted by the parties or that one has signed and the other has accepted it (see **Chander Nath Ohja v. Suresh Jhalani** ([1999] 8 SCC 628). The Supreme Court in **Rukminibai v. Collector, Jabalpur** ([1980] 4 SCC 556) has held that an arbitration clause is not required to be stated in any particular form. If the intention of the parties to refer the dispute to arbitration can be ascertained from the form of the agreement, it is immaterial whether or not the expressions “arbitration” or “arbitrator” has been used. The whole thing turns out on the intention of the parties. 14. Reference can be made to Sec.8 of the Act under which petitioner filed I.A. No.637 of 2010. Sub-sec.(1) of the said provision says that a judicial authority before which an action is brought in a matter which is the subject matter of an arbitration shall, if a party so applies not later than when submitting his first ## **O.P(C) No.1881 of 2011 & C.R.P. No.451 of 2011** **==> picture [48 x 10] intentionally omitted <==** statement on the substance of the dispute refer the parties to arbitration. Sub-sec.(2) says that the application referred to in sub-sec.(1) shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof. Under sub-sec.(3), notwithstanding that an application has been made under sub-sec.(1) and that the issue is pending before the judicial authority an arbitration may be commenced or continued and an arbitral award made. 15. Section 8 of the Act makes a difference from Section 34 of the Act of 1940. If under Sec.34 of the Act of 1940 a discretionary power was vested with the court to refer the parties to arbitration, under Sec.8(1) of the Act that discretionary power is taken away. For Sec.8(1) of the Act to apply, the following requirements are satisfied: i) there must be an agreement for arbitration. ii) party to the agreement brings an action in the court against the other party; iii) the subject matter of the action is the ## **O.P(C) No.1881 of 2011 &** ## **C.R.P. No.451 of 2011** **==> picture [48 x 10] intentionally omitted <==** same as the subject matter of the agreement for arbitration; iv) the other party (to the action in court) moves the court for referring the parties to arbitration before submitting the first statement on the substance of the dispute. When an application under Sec.8(1) of the Act is filed complying with the requirements the further proceedings in the suit is temporarily suspended till a decision is rendered on the said application. The court cannot allow the suit to proceed before a decision is rendered on the application under Sec.8(1) of the Act. 16. In Hudson's 'Buildings And Engineering Contract', 11[th] Edn. at page 1579 criticizing Sec.5 of the Act it is stated: “It would seen that there has been a widespread movement by influential interests involved in the arbitration process against control by the courts, supported by the many modern Governments who perceive a public financial ## **O.P(C) No.1881 of 2011 &** ## **C.R.P. No.451 of 2011** **==> picture [48 x 10] intentionally omitted <==** advantage in diverting litigation away from the public funded judiciary into the privatised sector which arbitration represents”. Russel on 'Arbitration, 20[th] Edn. by Anthony Walton and Mary Victoria' states at page 10 regarding statutory arbitration: “a statute may provide that disputes of a particular class shall be determined by arbitration of a particular sort, either in every case or upon certain steps being taken by the party. Where such a provision applies the arbitral Tribunal laid down by the statute has exclusive jurisdiction over such disputes”. Section 5 of the Act bars intervention of judicial authority in matters governed by Part I of the Act except when so provided in the said Act. 17. The Act is intended to help parties settle their differences privately by conciliation or by arbitration and thereby **C.R.P. No.451 of 2011** ## **O.P(C) No.1881 of 2011 &** -: 15 :- to spare themselves of wasteful and vexatious litigation. Lord ## **Chancellor Selbourne, in Willesford v. Watson** ([1873] 8 Ch. App, 473 at P.480) said: “If parties chose to determine for themselves that they will have a domestic forum instead of resorting to the ordinary courts, then since that Act of Parliament was passed a prima facie duty is cast upon the courts to act upon such an agreement. The parties here have made that agreement. They probably knew what were the reasons in favour of determining these questions by arbitration, and what were the reasons against it, and they made it part of their natural contract that these questions should be so determined. The plaintiff cannot therefore be now heard to complain if that part of their contract is carried into effect.......” A similar view is taken in **Quantas Airways Ltd. v.** **Dillingham Corporation** ([1985] 4 NSWLR 113 at page ## **O.P(C) No.1881 of 2011 & C.R.P. No.451 of 2011** -: 16 :- 122). It is held: “It is simply not open to the plaintiff to complain of the cost and expenses of arbitration, after all, it had freely subscribed to the arbitration clause and is, prima facie, liable to bear the cots of such choice...” 18. Thus if the parties have agreed for arbitration of the disputes arising from the contract they have entered into, the court has to recognize and uphold that agreement for arbitration. 19. I have extracted above the relevant clause in Ext.P4, agreement between the parties. There is no dispute about the execution, validity or enforceability of the contract. The dispute is only regarding clause 17 of the contract (Ext.P4), whether it amounts to an agreement to refer the disputes to arbitration or not? To understand that contention, it is necessary to refer to various other clauses in Ext.P4, agreement. It is styled as a 'Sales and Purchase Agreement' entered into between petitioner (through the second defendant) and the respondent on 15.05.2007. In the preambular potion of the agreement it is **O.P(C) No.1881 of 2011 & C.R.P. No.451 of 2011** **==> picture [48 x 10] intentionally omitted <==** stated that it is executed between petitioner and the respondent and that the parties have agreed “for sale and purchase of raw cashew nuts, particulars of which are as follows”. Thereunder the various terms and conditions of the agreement are stated under separate headings. Clause (1) refers to the agreement number, Clause (2) deals with with commodity, Clause (3) states about the quantity, Clause (4) deals with the price, Clause (5) deals with the quality and Clause (6) deals with inspection. Similar clauses are found in Ext.P4, agreement as to other terms and conditions, each having a separate heading. Thus it comes to clause 17 with respect to “Arbitration” (which is already extracted) and states that any dispute arising out of the contact or any matter arising out or in relation to the contract will be subject to the Indian law and subject to the jurisdiction of civil courts at Cochin/Kollam in Kerala, India only. 20. It is argued by learned counsel for respondent that the above clause does not amount to a consensus ad idem between the parties to refer their disputes to arbitration. Learned counsel has made heavy reliance on the decision in **State of Orissa v. Bhagyadhar Dash** ([2011] 7 SCC 406). There, ## **O.P(C) No.1881 of 2011 &** ## **C.R.P. No.451 of 2011** -: 18 :- referring to the decision in _**K.K. Modi v. K.N. Modi**_ ([1998] 3 SCC 573) the requirements of a valid arbitration agreement are enumerated. It is stated that the arbitration agreement must contemplate that decision of the Tribunal will be binding on the parties to the agreement, that jurisdiction of the Tribunal to decide the rights of parties must derive either from the consent of party or from the order of court or from a statute the terms of which make it clear that the process is to be an arbitration, agreement must contemplate that substantive right of parties will be determined by the agreed Tribunal that the Tribunal will determine rights of the parties in an impartial and judicial manner with the Tribunal owing and equal obligation and fairness to both sides that the agreement of the parties to refer their disputes to the decision of the Tribunal must be intended to be enforceable in law and lastly that the agreement must contemplate that the Tribunal will make decision upon a dispute which is already formulated at the time when reference is made to the Tribunal. Learned counsel has also referred me to paragraph 4 of the decision in **State of Orissa v. Bhagyadhar Dash** where reference is made to _**Jagadish Chander v. Ramesh Chander**_ ## **O.P(C) No.1881 of 2011 &** **C.R.P. No.451 of 2011** ## -: 19 :- ([2007] 5 SCC 719). There, a passage from the decision in **Jagadish Chander’s case** is quoted which is to the effect that the intention of parties to enter into an arbitration agreement shall have to be gathered from the terms of the contract and that if the terms of the agreement clearly indicate an intention on the part of the parties to the agreement to refer the dispute to a private Tribunal for adjudication and a willingness to be bound by the decision of such Tribunal on such disputed, it is an arbitration agreement. At page 411 of the decision in **State of Orissa v. Bhagyadhar Dash** (supra) in clause (iii) it is stated that where the clause provides that in the event of disputes arising between the parties the disputes shall be referred to arbitration it is an arbitration agreement. Where there is a specific and direct expression of intent to have the disputes settled by arbitration it is not necessary to set out the attributes of an arbitration agreement to make it an arbitration agreement. But where the clause relating to settlement of disputes contains words which specifically excludes any of the attributes of an arbitration agreement or contains anything that detracts from the arbitration agreement it will not be an arbitration agreement. **C.R.P. No.451 of 2011** ## **O.P(C) No.1881 of 2011 &** -: 20 :- Clause (iv) at page 411 of the decision says that the mere use of the word 'arbitration' or 'arbitrator' in a clause will not make it an arbitration agreement if it requires or contemplates a further or fresh consent from the parties for reference to arbitration. It is further stated that use of words such as “parties can if they so desire, refer their disputes to arbitration' or 'in the event of any dispute the parties may also agree to refer the same to arbitration' or 'if any dispute arises between the parties, they should consider settlement by arbitration' in a clause relating to settlement of disputes, indicate that the clause is not intended to be an arbitration agreement. Similarly, a clause which states that 'if the parties so decide the disputes shall be referred to arbitration' or 'any dispute between the parties if they so agree shall be referred to arbitration' is not an arbitration agreement. Such clause merely indicate a desire or hope to have the disputes settled by arbitration or a tentative agreement to explore arbitration as a mode of settlement if and when a dispute arise. In paragraph 6, again referring to the decision in **K.K. Modi v. K.N.Modi** the relevant clause in that case extracted is as under: ## **O.P(C) No.1881 of 2011 &** **C.R.P. No.451 of 2011** -: 21 :- “Implementation will be done in consultation with the financial institutions. For all disputes, clarifications, etc., in respect of implementation of this agreement the same shall be referred to the chairman IFSCI or his nominees whose decisions will ” be final and binding on both the groups . In paragraph 8 at page 413 it is stated referring to the decision in _**State of U.P. v. Tipper Chand**_ ([1980] 2 SCC 341) that the said decision clarified that in the absence of a provision for referring disputes between the parties for settlement, the clause merely stating that the decisions of the Superintending Engineer shall be final was not an arbitration agreement. The court clarified in **Tipper Chand’s case** that an arbitration agreement can either be in express terms or can be inferred or spelt out from the terms of the clause and that if the purpose of the clause is only to vest in the named authority, the power of supervision of execution of the work and administrative control over it from time to time it is not an arbitration agreement. It was also held in **Tipper Chand’s case** that the clause in that case did not contain any **C.R.P. No.451 of 2011** ## **O.P(C) No.1881 of 2011 &** **==> picture [48 x 10] intentionally omitted <==** express arbitration agreement nor spell out by implication any arbitration agreement as it did not mention any dispute or reference of such dispute for such arbitration. 21. Reading the above decisions what is discernible is that the clause must indicate that the parties have agreed to refer the dispute for arbitration. It is not merely the presence of certain words that give the indication but the clause as such revealing the intention of the parties. In the present case so far as arbitration is concerned (see clause 17 of Ext.P4, agreement) parties agreed that any dispute arising out of Ext.P4, agreement or any matter arising out of or in relation to that agreement is subject to the Indian law and subject to the jurisdiction of civil courts at Cochin/Kollam in Kerala, India only. 22. In this connection profitable reference can be made to Sec.28 of the Act. The said provision deals with the rules applicable to the substance of a dispute. Sub-sec.(1) deals with cases where the place of arbitration is situate in India. Clause (a) of Sec.28(1) states that in an arbitration other than international commercial arbitration the arbitral Tribunal shall decide the dispute submitted to arbitration in accordance with the ## **O.P(C) No.1881 of 2011 & C.R.P. No.451 of 2011** **==> picture [48 x 10] intentionally omitted <==** substantive law for the time being in force in India. Clause (b) deals with international commercial arbitration and states that the arbitral Tribunal shall decide the dispute in accordance with the rules of law designated by the parties as applicable to the substance of the dispute. That means, so far as intentional commercial arbitration is concerned, the parties have to designate the law as would be applicable in the matter of arbitration. 23. I must also understand the use and practice prevalent in international commercial transactions. As aforesaid, petitioner is a Private Limited Company incorporated in the United Kingdom. Respondent is a State owned Company. Parties have the experience in international commercial transactions and contracts. Section 28(3) of the Act states that “in all cases the arbitral Tribunal shall decide in accordance with the terms of the contract and shall take into account the usages of trade applicable to the transaction. 24. The said provision is in accordance with the UNCITRAL Model Law. I have been referred to Appendix 2 of UNCITRAL Model Law of international commercial arbitration. **C.R.P. No.451 of 2011** ## **O.P(C) No.1881 of 2011 &** -: 24 :- Chapter II deals with arbitration agreement and Article 7 refers to the definition and form of arbitration agreement. Clause (1) of Article 7 reads as under: “(1) Arbitration agreement is an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship whether contractual or not. An arbitration agreement may be in the form of arbitration clause in a contract or in the form of a ” separate agreement . 25. I have already referred to **Rukminibai v. Collector, Jabalpur** where the Supreme Court held that an “arbitration agreement is not required to be in any particular form and that if the intention of parties to refer the dispute to arbitration can clearly be ascertained from the terms of the agreement it is immaterial whether or not the expression “arbitration” or “arbitrator” has been used. **C.R.P. No.451 of 2011** ## **O.P(C) No.1881 of 2011 &** -: 25 :- ## 26. In **Mang's Taumunougaz Oil Production Association v. United World Trading Inc** ., (The times, February 24, 1995) it is held that a clause in a contract which stated that arbitration, if any by ICC rules in London amounted to a valid agreement to arbitrate in case of any dispute arising between the parties. Useful reference can also be made to the decision of the House of Lords in **Hamlyn & Co. v. Talisker Distillary** ([1894] AC 202). Lord Herschell in his speech said: “In this case, as in all such cases, the whole of the contract must be looked at, and the contract must be regulated by the intention of the parties as appearing from the contract. It is perfectly competent to those who under such circumstance as I have indicated, are entering into a contract, to indicate by the terms which they employ, which system of law they intend to be applied to the construction of the contract, and to the determination ” of the rights arising out the contract. (emphasis supplied) **C.R.P. No.451 of 2011** ## **O.P(C) No.1881 of 2011 &** **==> picture [48 x 10] intentionally omitted <==** 27. Sir Michael John Mustill in 'Transnational Arbitration in English Law' (Current Legal problems, 1984 at page 134) has opined that the parties have the freedom to choose the law which apply to their international commercial agreement. 28. The Supreme Court in **National Thermal Power Corpn. v. Singer Company And Others** ([1992] 3 SCC 551) has quoted Diecy as saying as regards the governing law of arbitration in Volume I, pages 534-535 thus: **==> picture [287 x 13] intentionally omitted <==** interpretation of an agreement are governed by its proper law, The law governing arbitration proceedings is the law chosen by the parties, or in the absence of agreement, the laws at the country in which the arbitration is held”. 29. The Supreme Court considered the necessity to have the particular words in the clause and arbitration in **M/s.Intel** **Technical Service Pvt. Ltd. v. W.S. Atkins Rail Ltd** ## **O.P(C) No.1881 of 2011 &** **C.R.P. No.451 of 2011** **==> picture [48 x 10] intentionally omitted <==** (JT 2008 SC 354). The relevant clause in the agreement is extracted in page 356 which reads as under: ## “ Clause 13. **Settlement of disputes.** . 13.1 This agreement, its construction, validity and performance shall be governed by and constructed in accordance with the laws of England and Wales; 13.2. subject to clause; 13.3. all disputes or differences arising out of or in connection with this agreement which cannot be settled amicably by the parties shall be referred to adjudication...” 30. It is relevant to note that the clause in the agreement in that case did not use the words “arbitration” or “arbitrator” but used the words “adjudication and settlement of disputes”. Still, interpreting the clause in the light of various decisions of the Apex Court it was held that the said clause clearly spelt out the intention of parties to refer the dispute to arbitration. ## **O.P(C) No.1881 of 2011 &** **C.R.P. No.451 of 2011** -: 28 :- ## 31. In **Adhunik Steels Ltd. v. Orissa** ## **Manganeese and Minerals (P) Ltd. ([2007] 7 SCC 125** the Supreme Court referred to the responsibility of the courts to respect the agreement between the parties for arbitration. It is stated that courts have the responsibility to rescue arbitration process by providing support. In **Konkan Railway Corpn.** ## **Ltd. v. Mehul Construction Co.** ([2009] 7 SCC 201) it is held that to attract the confidence of the international mercantile community and the growing volume of India's trade and commercial relationship with the rest of the world after the new liberalization policy of the Government, Indian Parliament was persuaded to enact the Act on UNCITRAL Model Law and therefore in interpreting the provisions of the Act, courts must not ignore the object and purpose of its enactment. 32. In **Sime Darby Eng. Sdn. Bhd. V. Engineers India Ltd.** ([2009] 7 SCC 545 - paragraph 6) it is stated that in construing the intention of parties (to refer the dispute among them to arbitration) due importance must be given to the parties autonomy in arbitration agreement. 33. In **Eastern Coalfields Ltd. v. Sanjay** ## **O.P(C) No.1881 of 2011 &** **C.R.P. No.451 of 2011** -: 29 :- **Transport Agency** ([2009] 7 SCC 345 - paragraph 6) it is stated: “It is well settled rule of interpretation that the section heading or marginal note can be relied upon to clear any doubt or ambiguity in the interpretation of any provision and to discern the legislative intent. The section heading constitutes an important part of the Act itself and may be read not only as explaining the provisions of the section, but it also affords a better key to the constructions of the provisions of the section which follows than might be afforded by a mere preamble. The said interpretation can well be applied to understand and construct the various clauses of an arbitration agreement also, which is in the realm of commercial contract. While interpreting so, the court may not depend only on the text but context as well in order to fully comprehend the context and the meaning of the clause”. (emphasis supplied) ## **O.P(C) No.1881 of 2011 & C.R.P. No.451 of 2011** -: 30 :- The Apex Court in **Phulchand Exports Ltd. v. OOO Patriot** (2011 STPL (Web) 885 SC 1 – judgment dated 12.10.2010 - paragraph 31) held: “…Where experienced businessmen are involved in a commercial contract and the parties are not of unequal bargaining power, the agreed terms must ordinarily be respected as the parties may be taken to have had regard to the matters known to them. The sellers and the buyers in the present case are business persons having no unequal bargaining powers. They agreed on all terms of the contract being in conformity with the international trade and ” commerce. 34. Clause 17 of Ext.P4, agreement can only be understood as a term of the contract as agreed between the parties in the matter of arbitration of disputes arising out of or in relation to the said contract. If the parties had no intention of **C.R.P. No.451 of 2011** ## **O.P(C) No.1881 of 2011 &** **==> picture [48 x 10] intentionally omitted <==** referring the disputes arising out of or in relation to the contract to arbitration, there was no need at all, to incorporate a clause relating to 'arbitration'. The clause that arbitration of the disputes out of or any matter arising out of or in relation to the contract “will be subject to Indian Law” is in accordance with the requirement of Sec.28(1)(b) of the Act that with respect to international commercial arbitration, the parties shall designate the rules of law as would be applicable and as per which the arbitrator is to decide the dispute. 35. I shall refer to the latter part of clause 17 of Ext.P4, agreement which says, “subject to jurisdiction of civil courts at ” Cochin/Kollam in Kerala, India only . Learned Sub Judge thought that the said clause conferred power on the courts at Cochin/Kollam to entertain any disputes that arose between the parties and which were brought before such court. Instead, reading clause 17 of Ext.P4, agreement that parties have agreed to refer any dispute arising out of Ext.P4, **C.R.P. No.451 of 2011** ## **O.P(C) No.1881 of 2011 &** **==> picture [48 x 10] intentionally omitted <==** agreement or any matter arising out of or in relation to the said agreement to arbitration which shall be subject to the Indian Law. I also stated that reading Secs.5 and 8 of the Act, when parties have decided to refer their disputes to be decided by arbitration, the intervention of courts in such matters is prohibited except so far as the Act specifically provides for. Sections 9, 17, 34, 36, etc., of the Act confer jurisdiction on the courts in certain matters. When more than one court has jurisdiction to entertain a matter, it is within the power of the parties to confine by agreement jurisdiction on one or more of such court. Hence the second limb of clause 17 of Ext.P4, agreement confining jurisdiction to civil courts at Cochin/Kollam can only be with respect of matters regarding which courts are empowered by the Act to exercise jurisdiction, viz., under Sections 9, 17, 27, 34, 36, etc. 36. Having read the relevant clause in Ext.P4, agreement in the light of the circumstances and the decisions referred supra it leaves me in no doubt that notwithstanding the absence of expressions like parties being bound by the decision of the Arbitrator or such decision being final, parties with their expertise and knowledge in international commercial transactions **C.R.P. No.451 of 2011** ## **O.P(C) No.1881 of 2011 &** **==> picture [48 x 10] intentionally omitted <==** and arbitration wanted their disputes to be referred to arbitration in accordance with the Indian law relating to arbitration, i.e., the Act and accordingly by clause 17 of Ext.P4, agreement agreed that the disputes shall be referred to arbitration. Learned Sub Judge therefore was not correct in holding that the dispute involved in the case is not arbitrable. 37. It is contended by learned counsel for respondent that at any rate, petitioner has submitted to the jurisdiction of learned Sub Judge, Kollam. Learned counsel has invited my attention to the Annexures produced along with C.R.P. No.451 of 2001 (where challenge is made to the order of the learned Sub Judge setting aside the ex parte decree against petitioner). Annexure-A1 is the affidavit filed on behalf of petitioner in support of the application to enlarge time for filing written statement and related matters. That affidavit is dated 22.08.2009. In the second paragraph it is stated that summons to the petitioner was served on it on 16.07.2009 in the United Kingdom, the file relating to the subject matter and connected contracts are managed and in the custody and control of the Administrative Manager who was undergoing treatment in a hospital at London, faced with the **C.R.P. No.451 of 2011** ## **O.P(C) No.1881 of 2011 &** **==> picture [48 x 10] intentionally omitted <==** situation that the files and related materials could not be retrieved and gathered to be conveyed to the petitioner's counsel in India to instruct him prepare its defence and claims, it needed time and that petitioner has substantial contentions in the matter. In the last paragraph it is stated that a separate application seeking enlargement of time for filing written statement is being filed therewith which may be allowed on the facts and circumstances mentioned in the affidavit. In the application filed under Sec.151 of the Code it is stated that time may be enlarged for filing written statement and counter claim. Annexure-A2 is another application dated 06.01.2010 again requesting for time for filing written statement (in the circumstances stated in Annexure-A1, application). In paragraph 4 it is stated that due to unavoidable and exceptional circumstances stated therein written statement could not be filed on time. It is also stated that petitioner has substantial contentions including a counter claim against the respondent and that petitioner is only pleased to place its defence and claim before the learned Sub Judge and get the matter adjudicated at the earliest. Annexure-A3 is the affidavit and application dated **O.P(C) No.1881 of 2011 &** **C.R.P. No.451 of 2011** **==> picture [48 x 10] intentionally omitted <==** 10.11.2010 filed by petitioner to review the order passed by the learned Sub Judge on 25.10.2010 to file written statement within 20 days. In paragraph 2 of that affidavit reference is made to I.A. No.637 of 2010 filed by petitioner under Sec.8(1) of the Act (on 10.02.2010) and the contentions raised therein that the suit is not maintainable in view of the arbitration clause contained in Ext.P4, agreement. I.A. No.637 of 2010 was dismissed on 21.12.2010. Petitioner applied for a copy of that order on 22.12.2010 to challenge the same. Annexures-A1 and A2, applications are thus filed before petitioner filed I.A. No.637 of 2010 on 10.02.2010. Learned Sub Judge passed the order dated 25.10.2010 when I.A. No.637 of 2010 was pending decision. Annexure-A3, petition for review was filed before I.A. No.637 of 2010 was disposed of on 21.12.2010. After the order dated 21.12.2010 on I.A. No.637 of 2010 the case was posted on 10.01.2011 and 24.01.2011 for filling written statement on which days counsel for petitioner claims to have represented that a copy of the order dated 21.12.2010 applied for on 22.12.2010 was not yet issued to facilitate petitioner challenge the said order. On 24.01.2011 petitioner was set ex parte and an ex parte **C.R.P. No.451 of 2011** ## **O.P(C) No.1881 of 2011 &** -: 36 :- judgment and decree were passed on 29.01.2011. Vide Annexure-A4, application – I.A. No.2170 of 2011 dated 21.06.2011 (O.P(C) No.1881 of 2011 in challenge of the order dated 21.12.2010 on I.A. No.637 of 2010 under Sec.8(1) of the Act was filed in this Court on 14.06.2011). Petitioner requested that the ex parte judgment and decree against it be set aside. In Annexure-A4, application petitioner again referred to the contention it had raised in I.A. No.637 of 2010 under Sec.8(1) of the Act and the request for time to challenge the order on that application. Annexure-A4, application, the conditional order thereon, deposit of cost by the petitioner and setting aside the ex parte judgment and decree are all after petitioner filed O.P(C) No.1881 of 2011 on 14.06.2011 in challenge of the order dated 21.12.2010 on I.A. No.637 of 2010 filed under Sec.8(1) of the Act. Now the question is whether, by Annexures-A1 to A4, petitioner has submitted to the jurisdiction of learned Sub Judge. 38. Section 8(1) of the Act states that a judicial authority before which action is brought in a matter which is the subject matter of arbitration agreement shall, if a party so applies not later than when submitting his first statement of substance of ## **O.P(C) No.1881 of 2011 &** **C.R.P. No.451 of 2011** **==> picture [48 x 10] intentionally omitted <==** dispute, refer the parties to arbitration. Section 34 of the Act of 1940 required such application to be made, “at any time before filing a written statement or taking any other steps in the “ proceedings. Referring to the expression step in the proceedings” occurring in the Act of 1940, the Supreme Court ## held in **F.C.I. v. Yadav Engineer and Contractor** ([1982] 2 SCC 499) that the expression “step in the proceedings” must be such steps as would clearly, unambiguously and unequivocally disclose the intention of party taking the steps to give up the benefit of arbitration agreement and to acquiesce in the resolution of dispute by the court. It was observed that when ex parte orders are made at the back of a party and he is forced to come to the court to vindicate his right (to set aside the ex parte order), such compulsion cannot disclose an unambiguous intention to give up benefit of the arbitration agreement. The expression “step in the proceedings” was considered again in ## **General Electric Company v. Renusagar Power Co.** ([1987] 4 SCC 137) and it was held that it must be a step in aid of the progress of the suit or submission to the jurisdiction of the court for adjudication of the merit of the controversy in the suit. **C.R.P. No.451 of 2011** ## **O.P(C) No.1881 of 2011 &** -: 38 :- The step must be such as to manifest the intention of the party, unequivocally, to abandon the right under the agreement and instead to opt to have the dispute resolved on merit in the suit. The step must be such as to indicate an election or affirmation in favour of the suit in the place of the arbitration. As against the expression “step in the proceedings” which occurred in the Act of 1940, Sec.8(1) of the Act uses the expression, “before filing a statement on the substance ” of the dispute . Dealing with the said expression the Supreme Court in **Rashtriya Ispat Nigam Ltd. v. Verma Transport Co.** ([2006] 7 SCC 275) held in paragraph 36: “The expression 'first statement on the substance of the dispute' contained in Sec.8(1) of the 1996 Act must be contra-distinguished with the expression 'written statement'. It employs submission of the party to the jurisdiction of the ## **O.P(C) No.1881 of 2011 & C.R.P. No.451 of 2011** -: 39 :- judicial authority. What is, therefore, needed is a finding on the part of the judicial authority that the party has waived its right to invoke the arbitration clause. If an application is filed before actually filing the first statement on the substance of the dispute, the party cannot be said to have waived its right or ” acquiesced itself to the jurisdiction of the court. (emphasis supplied) Reference was made to the decision in **State of U.P. v. Janki** **Saran Kailash Chandra** ([1973] 2 SCC 96) where, an application for time to file written statement was considered to be a “step in the proceedings” as mentioned in Sec.34 of the Act of 1940. The Supreme Court in paragraph 38 of **Rashtriya Ispat Nigam Ltd. v. Verma Transport Co.** took note of the distinction in the wordings of Sec.34 of the Act of 1940 and Sec.8(1) of the Act (of 1996) and held: “....In view of the change brought about by the 1996 Act, we are of the opinion that what is **O.P(C) No.1881 of 2011 &** **C.R.P. No.451 of 2011** **==> picture [48 x 10] intentionally omitted <==** necessary is disclosure of the entire substance in the main proceeding itself and not taking part in the supplemental proceeding.” 39. “Acquiescence” is the assent or acceptance by a party who is aware that his right has been transgressed. “Waiver” is the intentional relinquishment of a known right. A voluntary choice is the essence of 'waiver'. 40. So far as Annexure-A3, application for review of the order dated 25.10.2010 regarding filing of written statement is concerned, the said order and Annexure-A3, application are made when I.A. No.637of 2010 under Sec.8(1) of the Act was pending, i.e., when there was a temporary suspension of the jurisdiction of the learned Sub Judge due to the pendency of I.A. No.637 of 2010 and that application was yet to be decided. Annexure-A3, cannot therefore amount to acquiescence in the jurisdiction of the court or a waiver of right of petitioner under Sec.8(1) of the Act. By Annexures-A1 and A2, requests were made on behalf of petitioner for time to file written statement. The said applications do not amount to statements of substance of the dispute so that it could **C.R.P. No.451 of 2011** -: 41 :- ## **O.P(C) No.1881 of 2011 &** be interpreted as amounting to acquiescence in the jurisdiction of the court or waiver of the claim for arbitration under clause 17 of Ext.P4. I must also understand the compulsion in which petitioner, a Company incorporated in the United Kingdom was placed. Summons on petitioner was served at its office in London, United Kingdom on 16.09.2009. The representative of petitioner at Kozhikode, Kerala not being possessed of the relevant records (as the same were in the office of petitioner in London) was not able to give instruction to the Advocate to prefer its defence. Annexures-A1 and A2 also state the constraint the representative had as the Administrative Manager and Director in charge were undergoing treatment in a hospital at London, to get the relevant materials to prepare the written defence. It was when confronted with such compulsive circumstances that the representative of petitioner, on its behalf had to seek time from learned Sub Judge to file its defence. Annexures-A4 and A6 came only after petitioner filed O.P(C) No.1881 of 2011 in this Court on 14.06.2011 in challenge of the order dated 21.12.2010 on I.A. No.637 of 2010 filed under Sec.8(1) of the Act. I am not inclined to think that Annexures-A1 to A4 and A6 amounted to either an **C.R.P. No.451 of 2011** ## **O.P(C) No.1881 of 2011 &** **==> picture [48 x 10] intentionally omitted <==** intentional relinquishment of the right of petitioner to request learned Sub Judge to refer the parties to arbitration in the sense that there was a voluntary choice of jurisdiction of the learned Sub Judge or that there was an assent or acceptance, by the petitioner of the jurisdiction of learned Sub Judge to entertain the suit. The contention that by Annexures-A1 to A4 and A6 (in C.R.P. No.451 of 2011) petitioner has acquiesced in the jurisdiction of the learned Sub Judge or that it has waived its right to refer the dispute to arbitration has therefore to fail. Any application filed in a pending suit without reference to the substance of the dispute and without any indication of a voluntary choice of the jurisdiction of the court notwithstanding the agreement to refer the disputes to arbitration or a relinquishment of the said right cannot amount to submission to the jurisdiction of the court. 41. In the view I have taken I hold that clause 17 in Ext.P4, agreement amounts to an agreement between the parties to refer the disputes arising out of the said contract or any matter arising out of or in relation to the said contract to arbitration in accordance with the Indian law of arbitration, i.e., ## **O.P(C) No.1881 of 2011 & C.R.P. No.451 of 2011** -: 43 :- the Act (of 1996). Hence the learned Sub Judge has no jurisdiction to entertain the suit. Learned Sub on receiving I.A. No.637 of 2010 was required to refer the parties to arbitration. The order dated 21.12.2010 on I.A. No.637 of 2010 is liable to the set aside. 42. Since clause 17 of Ext.P4, does not mention about any named arbitrator, it is open to the parties or any of them to invoke Sec.11(9) of the Act to get an arbitrator appointed. 43. Respondent has filed C.R.P. No.451 of 2011 challenging the order dated 06.08.2011 setting aside the ex parte decree passed by the learned Sub Judge. It is argued that in spite of the fact that the application was filed after 30 days, there was no application to condone the delay. 44. Assuming that I.A. No.2170 of 2010 to set aside the ex parte decree was filed beyond the period of 30 days, it is not as if in such situation an application to condone the delay is mandatory. For, Section 5 of the Limitation Act does not contemplate a written application to condone the delay. Instead what is required is only to show sufficient cause. I have been referred to the affidavit filed in support of I.A. No.2170 (at page **C.R.P. No.451 of 2011** ## **O.P(C) No.1881 of 2011 &** -: 44 :- 21 of C.R.P No.451 of 2011). There, reference is made to I.A. No.637 of 2010 filed on 10.02.2010 under Sec.8(1) of the Act, decision of the learned Sub Judge on that application on 21.12.2010, petitioner applying for a copy of the said order on 22.12.2010 to challenge the same and a copy of the order being issued only 18.01.2011. It is further stated in the affidavit that after dismissal of I.A. No.637 of 2010 on 21.12.2010, learned Sub Judge posted the case on 10.01.2011 on which day petitioner was represented by counsel and it was submitted that the order on I.A. No.637 of 2010 is being challenged and for the said purpose, copy of the order was not received. On 10.01.2011 learned Sub Judge recorded that no written statement is filed, petitioner was set ex parte and posted the case for payment of balance court fee on 24.01.2011. That day the matter was taken up and again there was a submission on behalf of petitioner that copy of order on I.A. No.637 of 2010 was yet not received enabling petitioner to challenge the same. On 24.01.2011 balance court fee paid by the respondent was received and ex parte judgment and decree were passed on 29.01.2011. 45. Assuming that separate application for condonation of **C.R.P. No.451 of 2011** ## **O.P(C) No.1881 of 2011 &** **==> picture [48 x 10] intentionally omitted <==** delay is not filed, I find that the factual situation in the case is stated in paragraph 4 of the affidavit in support of I.A. No.2170 of 2011. It is stated that the deponent was away with family in his Home State in Gujrat from 15.01.2011 for a month and therefore communication sent by the counsel in his Kozhikode address could not be seen by him until his return on 15.02.2011. Thereafter he contacted the Managing Director of petitioner in the U.K. and informed him of the happenings in the case. He got instruction from U.K., contacted his counsel and took steps to challenge the order on I.A. No.637 of 2010 in this case. Thus circumstances which led to the delay is discernible from the affidavit in support of the application. Even otherwise, when the order on I.A. No.637 of 2010 under Sec.8(1) of the Act is set aside, it has to be held that learned Sub Judge had no jurisdiction to proceed with the suit. Hence all orders passed subsequent to filing of I.A. No.637 of 2010 on 10.02.2010 should stand vacated as rendered without jurisdiction. Thus the ex parte judgment and decree also should go being rendered without jurisdiction. In that view, there is no reason to interfere with the order dated 06.08.2011 setting aside the ex parte judgment and decree ## **O.P(C) No.1881 of 2011 &** ## **C.R.P. No.451 of 2011** -: 46 :- against petitioner. 46. In the light of what I have stated above request to refer the dispute to arbitration is to be accepted. There is however, no reason to interfere with the order passed by the learned Sub Judge setting aside the ex parte decree. 47. Learned counsel for respondent made an alternative request that the court fee paid in the civil court be refunded to the respondent. Once the parties are referred to arbitration, there is nothing remaining to be decided in the suit and the suit itself is not maintainable. The court had no jurisdiction to entertain it. In the circumstances I leave it open to the respondent to move the learned Sub Judge for the purpose as law provides. Any such application if moved by the respondent shall be decided by the learned Sub Judge as provided under law. Resultantly the proceedings are disposed of as under: ## (1) O.P(C) No.1881 of 2011 is allowed. (a) Exhibit P3, order on I.A. No.637 of 2010 is set aide. That application is allowed and ## **O.P(C) No.1881 of 2011 & C.R.P. No.451 of 2011** -: 47 :- parties are referred to arbitration as provided in clause 17 of Ext.P4, agreement. (b) It is open to the parties or any of them to move under Sec.11(9) of the Arbitration and Conciliation Act, 1996 to get the Arbitrator appointed for settlement of their disputes. (2) Civil Revision Petition No.451 of 2011 is dismissed. All pending Interlocutory Applications will stand dismissed. ## **THOMAS P. JOSEPH, JUDGE.** vsv