RITES LIMITED Vs. JMC PROJECTS INDIA LTD

JUDGEMENT

(1.) THIS appeal is directed against the judgment dated 20. 04. 2007 passed by the learned Single Judge in LA. No. 1112/2007 in C. S. (OS) 1632/2006 whereby the aforesaid application filed by the appellant/defendant under section 8 of the Arbitration and Conciliation Act (the Act) to seek stay of the respondents suit, and reference of the disputes to arbitration has been dismissed.

(2.) ADMITTEDLY, the parties entered into an agreement which contained an arbitration clause for settlement of disputes through arbitration. The respondent initially also invoked the arbitration agreement. An Arbitral tribunal was also constituted. Before the Arbitral Tribunal, the case of the respondent was that its claims were not referable to arbitration, being "excepted matters". Correspondence took place between the parties and the arbitral Tribunal. Thereafter, the Respondent preferred the Civil Suit aforesaid in which the appellant preferred the application under section 8 of the Act.

(3.) THE learned Single Judge rejected the appellants said application after examination of the correspondence undertaken by the parties with the arbitral Tribunal and upon arriving at the conclusion that the present was a case where the parties have mutually terminated the mandate of the arbitral Tribunal under Section 15 of the Act. He held that the present was a case of not mere termination of mandate of a particular arbitral tribunal, but the intention of the parties was not to get the disputes resolved through the process of arbitration altogether. He also recorded that he had suggested to the parties that it would be better to have the disputes resolved through a sole arbitrator appointed by the Court. While the respondent was willing for the same, the appellant insisted that the arbitration should proceed only in accordance with arbitration agreement. Consequently, the Court concluded that the parties are ad idem that the subject matter of the disputes is not capable of adjudication through arbitration.