MARRIOTT INTERNATIONAL INC Vs. ANSAL HOTELS LIMITED

JUDGEMENT

(1.) S.K. Mahajan, J.-By this appeal, the appellants seek to challenge the order dated March 8,1999 passed by the learned Single Judge whereby their application under Section 9 of the Arbitration and Conciliation Act, 1996 (in short referred to as "the Act") was dismissed. A preliminary objection to the maintainability of the appeal has been raised by the respondents on the ground that Section 9 falls in Part-1 of the Act and Part-1 applies only to those arbitrations where the place of arbitration is in India. The contention of the respondents, therefore, is that as the arbitration proceedings were being held before the Kuala Lumpur Regional Centre for Arbitration in Malaysia, Section 9 of the Act will have no applicability and the petition itself was, therefore, not maintainable. It is submitted that in case the petition itself was not maintainable, this appeal will also not lie and is not maintainable.

(2.) The contention of the appellants, however, is that the Act provides a comprehensive framework for an arbitration under the Indian law based on the pattern of UNCITRAL Model Law of international commercial arbitration and the Act would, therefore, apply to all the arbitrations that are connected with India irrespective of the fact whether the place of arbitration is in India or abroad. Before we discuss the respective contentions of the parties, the facts in short relevant to the matter in issue may be enumerated as under:

(3.) Appellants who are the Marriott Group of Companies (hereinafter referred to as "the Marriotts"), on March 8,1997 entered into a series of related contracts with respondent No. 1 pursuant to which the appellants were appointed to operate the hotel as part of the Marriott chain of hotels world-wide and to provide certain technical, advisory, sales, marketing and pre-opening services to the hotel. There were separate agreements in respect of all these services. Respondent No. 1 allegedly terminated these contracts and is also alleged to have entered into certain agreements with the ITC Hotels Limited and appointing them as the new operator of the hotel and to take over its operation. ITC Hotels Limited were also issued certain shares to the extent of about 50-51% of the entire share capital of the Company. For the view we are taking in this appeal, it is not relevant as to what is the extent of share holding of the ITC Hotels Limited in respondent No. 1 Company. According to the appellant as the purported termination of the agreements by respondent No. 1 was illegal, they proposed to resolve their disputes by negotiations. However, receiving no assurance from the respondents for resolution of such differences by negotiations, the appellants filed a petition under Section 9 of the Act for seeking interim directions. It may not be out of place to mention here that in accordance with the arbitration agreement between the parties, the arbitration proceedings have also been initiated before the Kuala Lumpur Regional Centre for Arbitration in Malaysia.