INTEROCEAN SHIPPING I PVT LTD Vs. ASHISH DHULL

JUDGEMENT

(1.) The Applicant, Inter Ocean Shipping(I) Pvt. Ltd., has filed this action under Section 11 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'Act') seeking the appointment of an Arbitrator. The Applicants' claims are predicated on an Agreement of Service, the salient clauses of which are that the Respondent/Employee could not take-up employment with any other organisation during the three year tenure of the Agreement. The Applicant/Employer was contractually bound not to terminate the services of the employee during this tenure. Correspondingly, the employee was bound not to leave the service of the employer until the completion of the agreed three years tenure. The consequences of the employees' breach have been spelt out. The power to extend the tenure is conspicuous by its absence. The said Agreement contains the following Arbitration Clause: 14. That in event of any dispute or difference arising between the parties hereto during the subsistence of this agreement or afterwards relating to this agreement, the same shall be referred to the arbitration proceedings of which shall be held at Delhi and whose decision shall be final and binding on the parties. The party desiring the settlement of the dispute, shall give notice of its intentions to go in for arbitration clearly stating the point of dispute to be decided by arbitrators and appoint its own arbitrator within 30 days. If the other party fails to appoint its arbitrator within stipulated period or the two arbitrators fail to appoint an umpire, the court having jurisdiction shall appoint the second arbitrator and/or the umpire as the case may be. The venue of the arbitration shall be Delhi, India only. Subject as aforesaid, the provisions of Indian Arbitration and Conciliation Act, 1996 and any statutory modifications or reenactments thereof and rules made thereunder for the time being in force shall apply to the arbitration proceedings under this clause.

(2.) Arbitration Applications No.92/2006 and 99/2006 have been filed against the Applicant's erstwhile employees, the Respondents herein, namely, S/Shri Ashish Dhall and Rajnish Sharma respectively. Shri Ashish joined the services of the Applicant on 1.9.2000 as Shipping Executive on a consolidated salary of Rs.12,000/- per month and allegedly abandoned the services with the Applicant on 25.5.2005 without giving proper notice. The Applicant has claimed damages of Rs.6,97,000/- on account of the breach of the Agreement of Service. Shri Rajnish joined the services of the Applicant on 26.7.2000 as Shipping Executive on a consolidated salary of Rs.16,500/- per month and allegedly abandoned the services with the Applicant on 11.5.2005 without giving proper notice. The Applicant has claimed damages of Rs.6,00,000/- on account of the breach of the Agreement of Service.

(3.) These Petitions have been strenuously resisted by learned counsel for the Respondents/Employees on the ground that there is no subsisting Agreement to refer disputes to Arbitration. It has been underscored that the subject Agreement of Service was only in respect of the initial three year period when the employees were receiving a consolidated salary. Had the employees abandoned their services within that period the Arbitration Clause would undoubtedly have applied to claims for damages. It has further been contended that the Petition had been filed under Section 9 of the Act in which the ex parte ad interim injunction granted to the Applicant was withdrawn by Orders dated 22.9.2005. The Court observed thus:-