Oceanus Estates India (P) Ltd v The Alappuzha District Co-Operative Bank Ltd (now Kerala Bank Ltd) and Kerla Bank Ltd

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR. JUSTICE DEVAN RAMACHANDRAN MONDAY, THE 4[TH] DAY OF APRIL 2022 / 14TH CHAITHRA, 1944** ## **AR NO. 38 OF 2020** ## **PETITIONER:** OCEANUS ESTATES INDIA(P) LTD HOUSE NO.KNRA 79H, PANACKAL BUNGLOW, MARADU JUNCTION, MARADU P.O. KOCHI 682 304, HAVING CORPORATE OFFICE AT DOOR NO. 1090/B P N PLAZA , 4TH FLOOR, 18TH CROSS, 3RD SECTOR, HSR LAYOUT, BANGALORE 560 102, REPRESENTED BY REGIONAL MANGER, FRANCIS K.A., AGED 54 YEARS, S/O. ANTONY K.V. BY ADVS. S.SREEKUMAR (SR.) SRI.P.MARTIN JOSE SRI.P.PRIJITH SRI.THOMAS P.KURUVILLA SRI.R.GITHESH SRI.AJAY BEN JOSE SRI.MANJUNATH MENON SHRI.HARIKRISHNAN S. ## **RESPONDENTS:** 1 THE ALAPPUZHA DISTRICT CO-OPERATIVE BANK LTD. NEAR IRON BRIDGE , ALAPPUZHA 688 001. NOW KERALA BANK LTD., REPRESENTED BY ITS MANGING DIRECTOR. 2 KERLA BANK LTD., HAVING ITS REGISTERED OFFICE AT NEAR IRON BRIDGE, ALAPPUZHA 688 001. SRI.THOMAS ABRAHAM S.C. THIS ARBITRATION REQUEST HAVING COME UP FOR ADMISSION ON 04.04.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: AR NO. 38 OF 2020 2 ## **ORDER** The petitioner, which is stated to be a company incorporated under the provisions of the Companies Act, 1956, asserts that they were awarded with a contract for the construction of a multistoried building at Alappuzha, the terms of which have been reduced to writing in Annexure I agreement. They allege that even though they had complied with all their contractual obligations under the said agreement, they were unable to complete the construction on account of the total non-cooperation by the respondents and that this has now led to various disputes between the parties relating to the terms of the said agreement. 2. The petitioner says that since clause 61 of Annexure I agreement provides for the adjudication and resolution of all the disputes exclusively through the mechanism of arbitration, they addressed Annexure II letter to the 1[st] respondent, seeking that either their claims be met and honoured; or that the disputes be allowed to be referred to arbitration under the aforementioned clause. They allege that, however, in spite of Annexure II being received by the respondents, they have chosen not to respond to the same or to accede to any of the AR NO. 38 OF 2020 3 request made therein. They say that, therefore, they have been left without any other option but to approach this Court through this Arbitration Request. 3. I have heard Sri.S.Sreekumar, learned senior counsel instructed by Sri.P.Martin Jose, learned counsel for the petitioner and Sri.Thomas Abraham, learned standing counsel for the respondent - Bank. 4. Pertinently, Sri.Thomas Abraham, learned standing counsel for the respondents, opposed this Arbitration Request solely saying that the disputes between the parties have already been settled. He relied on the averments of the counter affidavit filed by the respondents, which avers that, on receiving Annexure II letter from the petitioner, they forwarded the same to the Registrar of Co-operative Societies with certain recommendations and that since the petitioner did not accede to the same, an inspection of the construction was arranged to be done by the officials of Cooperative Academy of Professional Education (CAPE), who submitted their report to his client on 17.01.2022. He added that this report is now under the consideration of his client and that pointed out that the counter affidavit states that “it may be considered and settled on the basis of the report and decision AR NO. 38 OF 2020 4 will be taken by the Board of Directors of the respondent bank” (sic). He thus prayed that this Arbitration Request be dismissed. 5. When I evaluate the afore rival contentions, it is clear that, on one hand, the petitioner has specified the disputes which, they say, had arisen between the parties and which have been enumerated in Annexure II notice; while, on the other, the respondents merely say that all such had been now amicably settled pursuant to the report of the CAPE. However, pertinently, the learned senior counsel for the petitioner affirmatively stated that his clients have not even been favoured with the alleged report of the CAPE and that they do not propose to accede to the recommendations therein, because they are firm in their mind that they want all the disputes to be adjudicated and resolved through the process of arbitration. 6. Viewed from the afore rival positions, it is evident that this Court will be now enjoined to consider this Arbitration Request on its merits; but before I do so, I must certainly verify that the statement of the petitioner, that clause 61 of Annexure I agreement binds the parties to the mechanism of arbitration or settlement of disputes, is accurate or otherwise. AR NO. 38 OF 2020 5 7. I have examined the said clause and as rightly stated by the petitioner, it mandates that all disputes and differences in connection with the contract or carrying out of the works and such other shall be referred to arbitration under the provisions of the Act and that such process shall be done by a sole Arbitrator to be appointed by the General Manager of the respondents. 8. As I have already said above, since the petitioner says that they are not willing to accede to the reported recommendations of the CAPE, it becomes ineluctable that the disputes between the parties cannot be construed to have been settled at all, much less amicably. 9. Obviously therefore, this Court is now obligated to allow this Arbitration Request because it is admitted by both sides that there are disputes pending between them. 10. That said, since clause 61 of Annexure I agreement provides that the sole Arbitrator shall be appointed by the respondent – society, it is apodictic that this Court is obligated to disregard such a clause in view of the judgment of the Hon'ble Supreme Court in **Perkins Eastman Architects DPC & another v. HSCC (India) Limited** [AIR 2020 SC 59], which has declared the law affirmatively that no party to a AR NO. 38 OF 2020 6 dispute can arbitrate or nominate an Arbitrator for resolution of the same. In the afore circumstances, I allow this Arbitration Request in the following manner: (a) I nominate Justice C.N.Ramachandran Nair, 3B, Bhavani, Kunnumpuram, Kakkanad, Kochi – 682 030, as the sole Arbitrator to adjudicate and resolve the disputes and differences between the parties to this case arising from Annexure I agreement. (b) The Registry is directed to communicate a copy of this order to the learned Arbitrator within two weeks from today and to obtain a Statement of Disclosure from him under Section 11(8), read with Section 12(1), of the Arbitration and Conciliation Act, 1996. (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. AR NO. 38 OF 2020 7 (e) In order to enable the Arbitrator to commence the proceedings without delay, I direct the parties to mark appearance before him at 11 A.M. on 28.04.2022. I record the consent of the parties that the seat of the arbitration shall be at Kochi, in modification to the specific stipulations in Annexure I agreement. **Sd/- DEVAN RAMACHANDRAN** **JUDGE** stu AR NO. 38 OF 2020 8 ## **APPENDIX OF AR 38/2020** PETITIONER ANNEXURES ANNEXURE 1 TRUE COPY OF AGREEMENT DATED 03.12.2009 EXECUTED BETWEEN THE PETITIONER AND THE 1ST RESPONDENT. ANNEXURE II TRUE COPY OF NOTICE DATED 07.03.2017 ISSUED BY THE PETITIONER TO 1ST RESPONDENT. ANNEXURE III TRUE COPY OF ACKNOWLEDGEMENT CARD ACKNOWLEDGING THE RECEIPT OF ANNEXURE II NOTICE ON 14.03.2017.