PROJECTS AND EQUIPMENT CORPORATION OF INDIA LIMITED Vs. ONODA ENGINEERING AND CONSULTING COMPANY LIMITED

JUDGEMENT

(1.) THIS petition has been brought under Section 33 of the Arbitration Act by the Projects and Equipment Corporation of India Limited against Onoda Engineering and Consulting Company Limited for declaring that the claims of the respondent based on various invoices submitted by the respondent to petitoner/Walchandnagar Industries Limited (hereinafter referred to as 'WIL') cannot form the subjects matter of any arbitration under arbitration clause misting in the bipartite agreement of the parties and in fact, such claims arise out of riparite agreement dated March 20. 1986, of the parties and WIL and injunction was sought restraining the respondent from raising any such claim or demand and for proceeding with reference made to arbitration under the jurisdiction of lmternational Chamber of Commerce.

(2.) THE facts of the case, in brief, are that the petitioner had obtained a contract from an Inconesian company PTSP in Indonesia for setting up a cement plant. THE petitioner entered an agreement with WIL to work as its associate or sub-contractor for putting up the said project on a turnkey basis and that agreement was made on April 30, 1981. By virtue of that agreement, WIL had taken up all the obligations and agreements required to be performed by petitioner by virtue of the main contract entered into with PTSP. WIL had also entered into a contract with M/s. Allias Chalmer Corporation of USA on the basis of the terms agreed upon in the main contract. WIL stated to have commenced the work in relation to the aforesaid project but their arose difficulties and could not complete the project within the stipulated period and the PTSP made. complaints about the delay in completing the project and expressed its dis-satisfaction with the progress and' quality of the work. THE petitioner also felt on the same lines and as WIL was unable) to remedy the situation, the PTSP served a notice of default on the petitioner on December 20, 1985 and WIL on being apprised of the dissatisfaction of the PTSP approached the respondent to arrange a fulfledged commissioning team of the respondent for doing the job in that project to the satisfacton of PTSP. THE petitioner and WIL arrived at an understanding with regard to the procurement of services and' technical assistance of the respondent. PTSP desired that WIL should not be associated in the project. So in older to satisfy PTSP a biparlite agreement was entered into between the petitioner and the respondent by virtue of which respondent agreed to provide necessary services and technical assistance for augmenting commissioning activity of the cement plant. This agreement was executed on March 20, 1986, after PTSP had given approval to the said agreement. WIL was not a party to this particular agreement but simultaneously on the same day tripartite agreement was executed between the parties and WIL under the terms of which WIL and the respondent were to carry on the work in the project and there was also astipulation regarding the mode and manner in which respondent was to receive its payments on the basis of letter of credit to be opened by WIL on the basis of the funds to be supplied- by the petitioner to WIL. It is not necessary to refer to various other facts mentioned in the petition showing as to how and' in what manner the disputes arose although it is averred that respondent's work was not .found upto the mark by WIL. However, respondent raised certain invoices claiming payments and as those payments-were not being made by the petitioner or WIL the respondent by virtue of an arbitration clause appearing at article 5 of the bipartite agreement of March 20, 1986, invoked the juridiction of International Chamber of Commerce, Paris, for appointment of arbitrator and for reference of the disputes to the arbitrator. THE arbitration clause was to the following effect : "If any dispute or difference or any matter relating to or out of this Agreement, between PEC and ONODA does arise and if the same cannot and/or is not settled mutually by negotiation, it shall be referred to arbitration in Singapore, in accordance with the Rules of Conciliation and Arbitration of the International Chamber of Commerce, Paris. THE language of the Arbitration proceedings shall be English Any award made in pursuance thereof shall be final and binding on both the parties."

(3.) I, hence, direct that the petition be returned for being filed in any other competent court. The stay of the arbitration proceedings granted vide order dated September 20, 1989, is. hereby, vacated. Petition and the applications are disposed of. September 12, 1990.