N.S.S. Trade (India) Pvt. Ltd. v. Fertilisers and Chemicals Travancore Ltd. (FACT) and others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR. JUSTICE RAJA VIJAYARAGHAVAN V** **FRIDAY, THE 06TH DAY OF MARCH 2020 / 16TH PHALGUNA, 1941** **AR.No.81 OF 2019** ## **PETITIONER/S:** **N.S.S.TRADE (INDIA) PVT. LTD., REGISTERED OFFICE AT SHETTY HOUSE, PANCHSHEEL NAGAR, VASANT PATIL MARG, SION-CHUNABHATTI, MUMBAI-400022 REPRESENTED BY IT'S DIRECTOR, SANTHOSH SHETTY.** **BY ADVS. SRI.K.S.BABU SMT.N.SUDHA SRI.BABU SHANKAR SMT.MINU SIBY ROY SRI.T.N.JAYADEVAN** ## **RESPONDENT/S:** - **1 THE FERTILISERS AND CHEMICALS TRAVANCORE LTD. (FACT), UDYOGAMANDAL, PINCODE-683 501, KERALA REPRESENTED BY ITS DIRECTOR-CUM-CHAIRMAN.** - **2 CHIEF GENERAL MANAGER (MARKETING), THE FERTILISERS & CHEMICALS TRAVANCORE LTD (FACT), UDYOGAMANDAL, PINCODE-683 501, KERALA.** - **3 DEPARTMENT OF FERTILISERS, MINISTRY OF CHEMICALS & FERTILISERS, SHASTRI BHAVAN, NEW DELHI-110 001, REPRESENTED BY IT'S SECRETARY.** - **ADDL.R4 IMPLEADED:** - **ADDL.R4 THE INTERNATIONAL CENTRE FOR ALTERNATIVE DISPUTE RESOLUTION, PLOT NO.6, VASANT KUNJ INSTITUTIONAL AREA, PHASE-II, MAHIPALPUR, NEW DELHI, DELHI-110070 REPRESENTED BY IT'S SECRETARY GENERAL.** *** ADDITIONAL 4TH RESPONDENT IS IMPLEADED AS PER ORDER DATED 16.01.2020 IN I.A.NO.1 OF 2020.** **AR.No.81 OF 2019** **2** **R1 & R2 BY ADVS. SRI.M.GOPIKRISHNAN NAMBIAR SRI.K.JOHN MATHAI SRI.JOSON MANAVALAN SRI.KURYAN THOMAS SRI.PAULOSE C. ABRAHAM** **THIS ARBITRATION REQUEST HAVING BEEN FINALLY HEARD ON 06.03.2020, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:** **AR.No.81 OF 2019** **3** ## **ORDER** This application is filed under Sections 11(5) and 12 of the Arbitration and Conciliation Act, 1996 (‘Act 3 of 2016’ for short) seeking for an appointment of an arbitrator to resolve the disputes that has arisen between the applicant herein and the 1[st] respondent. 2. According to the applicant herein, he was the highest bidder for the work namely “Sale of bulk gypsum from FACT- Cochin Division Gypsum Yard” on “As is where is condition”. A work order was issued to them on 27.11.2015 and thereafter an agreement was entered into on 7.12.2015. Clause 8 of the agreement provides for resolution of disputes, which reads as follows: “8.0.0. RESOLUTION OF DISPUTES 8.1.0. “If any dispute(s) arises out of or in connection with this AGREEMENT or in respect of any defined legal relationship associated therewith or derived there from, the parties agree to submit the disputes to arbitration under the ICADR (International Centre for Alternate Dispute Resolution) Arbitration Rules, 1996. The authority to appoint the Arbitrator shall be the International Centre for Alternate Dispute Resolution. The number of Arbitrator shall be one and the language of the arbitration proceedings shall be English. The place of arbitration proceedings shall be Ernakulam in Kerala.” In case the sole Arbitrator neglects or refuses to act or resigns or dies, the Chariman and Managing Director of FACT shall have right to appoint new Arbitrator in his place and the new arbitrator shall **AR.No.81 OF 2019** **4** give the reasoned reward which shall be conclusive and binding on all the parties. The language of the Arbitration proceedings shall be English and the venue of proceedings shall be Ernakulam in Kerala.” 3. Though some quantity of gypsum was lifted by the applicant from the yard, later disputes arose. On 2.9.2016, the applicant was informed that the supply of gypsum will stand stopped with immediate effect. Though the applicant moved heaven and earth to enable them to execute the work, it was of no avail. The applicant thereafter submitted a notice of claim dated 05.03.2019 to the respondents, but the same did not evoke any response. In terms of the agreement, the applicant approached the International Centre for Alternate Dispute Resolution (ICADR) seeking appointment of an Arbitrator. Though the payment as sought for by the ICADR was remitted, they did not take any steps to act in terms of their rules of Arbitration and appoint an arbitrator. It is in the above backdrop that the applicant is before this Court seeking for appointment of an Arbitrator. 4. The respondent Nos.1 and 2 have filed counter affidavit, contending that the arbitration request is not maintainable as the ICADR was not made a party. It is contended that it is for the ICADR, New Delhi, to appoint an arbitrator to resolve the disputes and this Court will have jurisdiction. 5. In view of the contention of non joinder raised by the respondents, **AR.No.81 OF 2019** **5** the applicant has filed an application seeking impleadment of ICADR as an additional respondent. Though notice was issued to the ICADR from this Court, the same was returned with an endorsement ‘addressee left’. Furthermore, I find from Annexure-A11 that the ICADR was noticed by the applicant and they had given a panel of arbitrators and the applicant by Annexure-A12 had agreed to the names suggested by the ICADR. It is also evident from Annexure-A13 and A14, which are dated 12.8.2019 that the applicant had requested the additional 4[th] respondent to take urgent steps to appoint an arbitrator. However, the additional 4[th] respondent has not responded to the said request. 6. In **Uttarakhand Purv Sainik Kalyan Nigam Ltd. v. Northern Coal Field Ltd.[1]** , it has been held that in view of the legislative mandate contained in 11(6-A), this Court is required only to examine the existence of an arbitration agreement. All other preliminary or threshold issues are left to be decided by the arbitrator under Section 16, which enshrines the kompetenzkompetenz principle. In the case on hand, the ICADR has not acted in tune with the mandate and hence this Court is required to exercise the powers under Section 11(6) of Act 3 of 2016 and appoint an arbitrator to resolve the disputes between the parties. In that view of the matter, this petition is allowed. (a) I nominate Hon'ble Mr. Justice J.M.James, Smirithi, 1 [2020 (2) SCC 455] **AR.No.81 OF 2019** **6** T.C.26/939(T.C.27/1754), Vanchiyoor, Thiruvananthapuram-695 035, Former Judge of this Court as Sole Arbitrator to decide the dispute and differences between the parties arising from Annexure-A1 dated 07.12.2015. (b) A copy of this order shall be communicated to the learned Sole Arbitrator by the Advocate of the applicant within a period of one week from today. A copy of the order shall also be forwarded to the learned Sole Arbitrator in the address shown in the list of panel of Arbitrators. (c) The Arbitrator is requested to forward the statement of disclosure under Section 11(8) r/w. Section 12(1) of the Act 3 of 2016. The disclosure statement shall be placed before this Court for confirmation of the appointment of the Arbitrator. The Registry shall retain a copy of the original. (d) The Arbitrator's fees shall be governed by the Kerala High Court (Fee Payable to Arbitrators) Rules, 2017. Both parties agree that the Arbitration costs and fees shall be shared equally. This Arbitration Request is allowed as above. ## **Sd/-** ## **RAJA VIJAYARAGHAVAN V** ## **JUDGE** DSV/7.3.2020 **AR.No.81 OF 2019** **7** ## **APPENDIX** ## **PETITIONER'S/S EXHIBITS:** **ANNEXURE A1 THE TRUE PHOTOSTAT COPY OF THE AGREEMENT DATED 07/12/2015 EXECUTED BETWEEN THE APPLICANT AND THE 1ST RESPONDENT.** |**ANNEXURE A1**|**THE TRUE PHOTOSTAT COPY OF THE AGREEMENT**<br>**DATED 07/12/2015 EXECUTED BETWEEN THE**<br>**APPLICANT AND THE 1ST RESPONDENT.**| |---|---| |**ANNEXURE A2**|**THE TRUE PHOTOSTAT COPY OF THE NOTICE OF**| ||**CLAIMS DATED 05/03/2019.**| |**ANNEXURE A3**|**THE TRUE PHOTOSTAT COPY OF THE POSTAL**| ||**RECEIPTS ISSUED BY THE POSTAL AUTHORITIES**| ||**DATED 06/03/2019.**| |**ANNEXURE A4**|**THE RECEIPT OF ACKNOWLEDGMENT DATED**| ||**09/03/2019 OF THE 2ND RESPONDENT.**| |**ANNEXURE A5**|**THE TRACK CONSIGNMENT REPORT HAVING**| ||**DELIVERED THE NOTICE OF CLAIMS TO THE**| ||**RESPONDENT.**| |**ANNEXURE A6**|**THE TRUE PHOTOSTAT COPY OF THE REQUEST**| ||**LETTER DATED 09/04/2019 FOR APPOINTMENT OF**| ||**ARBITRATOR SENT BY THE APPLICANT TO THE**| ||**INTERNATIONAL CENTRE FOR ALTERNATIVE**| ||**DISPUTE RESOLUTION (ICADR).**| |**ANNEXURE A7**|**THE TRUE PHOTOSTAT COPY OF LETTER DATED**| ||**16/04/2019 ISSUED BY THE INTERNATIONAL**| ||**CENTRE FOR ALTERNATIVE DISPUTE RESOLUTION**| ||**(ICADR) TO THE APPLICANT.**| |**ANNEXURE A8**|**THE TRUE PHOTOSTAT COPY OF THE LETTER DATED**| ||**23/04/2019 ISSUED BY THE APPLICANT TO**| ||**INTERNATIONAL CENTRE FOR ALTERNATIVE**| ||**DISPUTE RESOLUTION (ICADR).**| |**ANNEXURE A9**|**THE TRUE PHOTOSTAT COPY OF THE LETTER DATED**| ||**23/04/2019 SHOWING THE DETAILS OF PAYMENT**| ||**OF FEES FOR APPOINTMENT OF SOLE ARBITRATOR.**| |**ANNEXURE A9(A)**|**THE TRUE PHOTOSTAT COPY OF THE TAX INVOICE**| ||**NO.55/19-20/ICADR ISSUED BY THE**| ||**INTERNATIONAL CENTRE FOR ALTERNATIVE**| ||**DISPUTE RESOLUTION (ICADR).**| |**ANNEXURE A10**|**THE TRUE PHOTOSTAT COPY OF THE REPLY DATED**| **AR.No.81 OF 2019** **8** **29/04/2019 ISSUED BY THE 1ST OPPOSITE PARTY TO THE APPLICANT.** **ANNEXURE A11** **THE TRUE PHOTOSTAT COPY OF THE LETTER DATED 14/06/2019 ISSUED BY THE INTERNATIONAL CENTRAL FOR ALTERNATIVE DISPUTE RESOLUTION (ICADR) TO THE APPLICANT.** **ANNEXURE A12** - **THE TRUE PHOTOSTAT COPY OF THE LETTER DATED 18/06/2019 ISSUED BY THE APPLICANT TO THE INTERNATIONAL CENTRE FOR ALTERNATIVE DISPUTE RESOLUTION (ICADR).** **ANNEXURE A13** - **THE TRUE PHOTOSTAT COPY OF THE REMINDER LETTER DATED 12/08/2019 ISSUED BY THE APPLICANT TO THE INTERNATIONAL CENTRE FOR ALTERNATIVE DISPUTE RESOLUTION (ICADR).** - **ANNEXURE A14 THE TRUE PHOTOSTAT COPY OF THE ENVELOPE ISSUED TO THE INTERNATIONAL CENTRE FOR ALTERNATIVE DISPUTE RESOLUTION (ICADR) RETURNED TO THE APPLICANT WITH ENDORSEMENT LEFT.** **RESPONDENT'S/S EXHIBITS:** - **ANNEXURE R1 TRUE COPY OF THE LETTER DATED 10/05/2019 ISSUED BY THE 1ST AND 2ND OPPOSITE PARTIES TO THE ICADR.** **ANNEXURE R2 TRUE COPY OF THE ORDER OF PREFERENCE TO ICADR VIDE ITS LETTER REF. AGM(LS)-HO-LS-B994-181 DATED 02/07/2019.** **ANNEXURE R3 TRUE COPY OF THE ICADR RULES.** **//TRUE COPY// P.A.TO JUDGE**