Jharkhand High Court: In an arbitration application filed by the Petitioner-Smart Chip Private Limited for appointment of sole arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996 (‘the AC Act’) for resolution of disputes between the parties, Shree Chandrashekhar, ACJ., opined that under Section 11 of the AC Act, in cases where the parties did not agree to a procedure for appointment of an arbitrator for resolving the dispute on making an application by the aggrieved party, the power under Section 11(6) of the AC Act was exercisable by the Chief Justice of the High Court or a Judge nominated by the Chief Justice. At the present stage, it was not required to look beyond except existence of the arbitration clause; no more no less. Therefore, exercising the power under Section 11(6) of the AC Act, the Court requested Saibal Kumar Laik, a practicing Advocate of the High Court of Jharkhand to act as the sole Arbitrator for resolving the dispute between the parties.
Background
The petitioner was a company incorporated under the Companies Act, 1956. Pursuant to a Request for Proposal floated by the respondent on 29-07-2017 for Supply, Installation, Commissioning and Management of Micro ATM and Allied Software to be used as field devices for carrying out financial inclusion transactions at approximately 2000 villages/locations across the State of Jharkhand, the petitioner submitted its bid and was declared successful. Five work orders were issued to the petitioner between 17-08-2017 and 25-05-2018. Thereafter, some disputes cropped up in relation to the release of payment and non-supply of materials, there was an exchange of emails and letters between the parties. On 05-09-2022, the demand notice was given to the Cooperative Bank and a meeting was held on 11-10-2022 for amicably settling the dispute. Lastly, the petitioner issued a notice on 19-09-2023 under Section 21 of the AC Act.
Subsequently, present petition was filed for appointment of sole arbitrator to resolve the dispute between the parties.
The respondent-Cooperative Bank raised an objection to the maintainability of the present application on the ground that the petitioner being an agent governed under Section 48 of the Bihar Cooperative Societies Act, 1935, was required to approach the Registrar of the Cooperative Societies for initiating a dispute resolution proceeding.
Analysis, Law, and Decision
The Court prima facie opined that the clause 8 contained in “Request for Proposal for Supply, Installation, Commissioning and Management of Micro ATM and Allied Software” was an arbitration clause which should govern the parties in dispute.
The Court after perusal of the objections taken by Cooperative Bank stated that the dialogue between the petitioner and the Cooperative Bank had come to a dead end. Under Section 11 of the AC Act, in cases where the parties did not agree to a procedure for appointment of an arbitrator for resolving the dispute on making an application by the aggrieved party, the power under Section 11(6) of the AC Act was exercisable by the Chief Justice of the High Court or a Judge nominated by the Chief Justice. The Court relied on N.N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd., (2023) 7 SCC 1 and opined that at the present stage, it was not required to look beyond except existence of the arbitration clause; no more no less.
Therefore, exercising the power under Section 11(6) of the AC Act, the Court requested Saibal Kumar Laik, a practicing Advocate of the High Court of Jharkhand to act as the sole Arbitrator for resolving the dispute between the parties. The Arbitrator might enter reference within 30 days from the communication of a copy of this order by the petitioner. Further, as agreed by the parties, the fee payable to the sole Arbitrator should be as per Schedule-4 of the AC Act and the seat of the Arbitrator should be at Ranchi.
[Smart Chip (P) Ltd. v. Jharkhand State Cooperative Bank Ltd., 2024 SCC OnLine Jhar 1577, Order dated 17-05-2024]
Advocates who appeared in this case :
For the Petitioner: Khushboo Kataruka, Advocate; Shubham Kataruka, Advocate; Ushma Pandey, Advocate;
For the Respondent: Mrinal Kanti Roy, Advocate; Rishi Ranjan Vats, Advocate.
Buy Arbitration and Conciliation Act, 1996 HERE
