HMP ENGINEERS LIMITED Vs. RALLIS INDIA LTD

JUDGEMENT

(1.) Respondent no.3 has at the threshold challenged the territorial jurisdiction of this court to entertain the petition under Section 34 of Arbitration and Conciliation Act, 1996 (in short the "Act') as accordinq to Mr.Atul Setalvad, learned senior counsel for respondent no.1 neither of the parties is either living in Delhi or works for gains in Delhi nor was the agreement between the parties executed in Delhi nor was the contract to be performed at Delhi. It is contended by Mr.Setalvad that apart from this, arbitration agreement that is embodied in the 'Consent Terms' between the parties was also filed in Mumbai High Court and merely because the learned sole Arbitrator Hon'ble Mr. Justice A.M.Ahmadi, Retd. Chief Justice of India chose to hold the proceedings at Delhi and made the award at Delhi would not provide territorial jurisdiction to this court.

(2.) . The facts germane for determining the contentious question of jurisdiction need to be recapitulated in brief. An agreement dated 4.4.1991 was entered into between petitioner no.2 and respondent no.1 at Mumbai for sale of shares of petitioner nos.7 & 8 and the properties of Engineering Division. Disputes and differences arose between the parties which were referred to the sole arbitration of Mr.Justice A.M.Ahmadi. Proceedings culminated in award dated 31.8.1999. Same was challenged by the petitioners before this court. Prior to the said challenge by the petitioners, respondent no.1 had already filed application under Section 9 of the Act before Mumbai High Court. However, parties entered into compromise and Consent Terms were signed by both the parties and filed in Mumbai High Court. In view of consent terms, application under Section 34 of the Act filed by the petitioners in this court was withdrawn as one of the Consent Terms was that petitioner shall withdraw petition under Section 34 of the Act filed in this court. "Another term of consent terms was arbitration clause whereby parties were given liberty to refer the disputes arising from the consent terms to the sole arbitration of Mr.Justice A.M.Ahmadi. However, inspite of consent terms, disputes arose and the petitioner referred the disputes to Mr.Justice A.M.Ahmadi for fresh arbitration. Mr.Justice A.M.Ahmadi made the award on 30.10.2001. The said award has beep again challenged by the petitioners by way of instant petition.

(3.) . As per this award, petitioners were required to pay respondent no.1 approximately sum of Rs.11 crorea and respondent no.1 was required to pay sum of Rs.1.8 crores to the petitioners. As per Consent Terms, sum of Rs.11 crores were set of to Rs.6 crore upon petitioners transferring certain properties to respondent no.1, some of which are in Delhi. Consent Terms did not provide for payment of Rs.1.8 crores by respondent no.1 to the petitioners. When the petitioners claimed Rs.1.8 crore from sum of Rs.6 crores, respondent no.1 refused to set off the said amount and this gave rise to the disputes for arbitration. The claims made by the petitioners are as follows:-