JSW ISPAT STEEL LIMITED Vs. JEUMONT ELECTRIC

JUDGEMENT

(1.) The plaintiff has filed the present suit for a declaration that there is no arbitration agreement between the plaintiff and defendant No.1 including in relation to contract No.4600006177 dated 7 th September 2006 as amended on 4 th July 2007. The plaintiff has also taken out a notice of motion praying for an order of restraint restraining defendant No.1 from proceeding with or prosecuting the arbitration proceeding initiated by it before the International Chamber of Commerce vide letter dated 24 th May 2012 on the basis of the aforesaid contract. The plaintiff had also moved this court for ex parte adinterim relief. Vide order dated 3 rd July 2012, I had granted adinterim relief in terms of prayer clause (a). The said order was carried in appeal before the Division Bench. The Division Bench, vide order dated 6 th August 2012, has disposed of the appeal requesting this court to take up the notice of motion for hearing and to grant the opportunity of hearing to the appellant defendant on the question of extension or otherwise of the adinterim relief, if the motion cannot be heard finally on that date. Accordingly, the matter was listed before me on 14 th August 2012. On the said date, it was submitted on behalf defendant No.1 firm that on the question as to whether the proceedings are vexatious or oppressive was a matter of interpretation and for that affidavitinreply was not necessary. I have, therefore, recorded a statement that the defendant No.1 was willing to proceed with the motion without filing affidavitinreply, in the order dated 14 th August 2012. As such, I have heard the learned counsel for the plaintiff and defendant No.1 on the motion without there being any affidavitinreply on behalf of defendant No.1.

(2.) Shri Tulzapurkar, learned senior counsel appearing for the plaintiff submits that there is no privity of contract between the plaintiff and defendant No.1. It is submitted that though defendant No.2 is a subsidiary of the plaintiff, it has an independent existence and, as such, independent contracting capacity. The learned counsel submits that defendant No.2 had placed an order on defendant No.1 on 6 th November 2002 for refurbishment, supervision of erection and commissioning of two generators at Power Project at villageDolvi, district Raigad in the State of Maharashtra. It is the case of the plaintiff that on 7 th September 2006, another contract was entered into between defendant No.1 and defendant No.2. The learned counsel submits that as per clause18 of the said contract, the general terms and condition attached at AnnexureA was to constitute and form part of the contract. Learned counsel submits that per the said terms and conditions, the term "owner" would mean the defendant No.2 and term "contractor" would the defendant No.1. The learned counsel submits that the parties have also been defined as the owner and contractor. Learned counsel submits that clause28 of the said terms and conditions deals with dispute resolution and arbitration and the same also refer to the parties. Learned counsel further submits that the contract has been further amended on 4 th July 2007. It is submitted that in the said amended contract also the plaintiff has no role to play. Learned counsel further submits that even notice demanding the payment by defendant No.1 is only addressed to defendant No.2 and the correspondent with regard to that is only between defendant No.1 and defendant No.2. It is further submitted that the plaintiff without being in any way involved in the contract between defendant No.1 and defendant No.2, has been dragged by defendant No.1 in the arbitration proceeding. The learned counsel relying on the judgment of the Apex Court in the case of Indowind Energy Ltd. v. Wescare (I) Ltd. & Anr., 2010 AIR(SC) 1793 submits that since there is no privity of contract between the plaintiff and defendant No.1, the arbitration proceedings initiated against the plaintiff are not sustainable on law. In reply to the contention of learned counsel for defendant No.1 that the said defendant is not amenable to the personal jurisdiction of this court and, as such, injunction cannot be granted at this stage, learned counsel for the plaintiff submits that since the defendant has attachable property at Mumbai and the obedience of the court's order can be secured by attachment of property in Mumbai, this Court has jurisdiction. In this this regard, he relies on the judgment of the learned single Judge of Nagpur High Court in the case of Tarabai v. Chogmal and Anr., 1932 AIR(Nag) 114; judgment of Division Bench of this Court in the case of Harshad Ratilal Shah v. Ishardas Sudarshan Lal, 1986 MhLJ 325and the judgment of the Apex Court in the case of Harshad Chiman Lal Modi v. DLF Universal Ltd., 2005 7 SCC 791. Learned counsel for the plaintiff further submits that the question as to whether the arbitration agreement exists or not is required to be decided by this Court except when the matter is taken to the tribunal directly by both parties, without the court having come into the picture. Learned counsel in this regard relies on the judgment of the Apex Court in the case of S.B.P and Company v. Patel Engineering, 2005 8 SCC 618and in the case of National Insurance Co.Ltd. v. Boghara Polyfab Pvt.Ltd., 2009 AIR(SC) 170. Learned counsel further submits that the Arbitration and Conciliation Act, 1996 ("said Act" for short) does not oust the jurisdiction of the civil Court. It is submitted that even perusal of section 8 and section 45 of the said Act would reveal that the defendants have an option to continue with the suit or the arbitration proceedings. It is, therefore, submitted that since the defendant No.1 has not applied under section 45, the plaintiff's suit does not come to an end and, as such, the Court has jurisdiction to entertain and try the suit. The learned counsel in this regard relies on the judgments of Apex Court in the case of P.Anand Gajapathi Raju & ors. v. V.G.Raju (died) & ors., 2000 AIR(SC) 1886and Sukanya Holdings (P) Ltd. v. Jayesh H. Pandya and Anr., 2003 5 SCC 531; judgments of single Judge of this Court in the case of Ivory Properties & Hotels Pvt.Ltd. v. Nusli Neville Wadia, 2011 2 BCR 559and Onyx Musicabsolute.com Pvt.Ltd. v. Yash Raj Films Ltd., 2008 6 BCR 418and judgment of learned single Judge of Delhi High Court in the case of P.K.Bajaj v. Reminiscent India Television Ltd., 2006 2 ArbLR 361. Learned counsel, therefore, submits that the arbitration proceedings as initiated at the instance of defendant No.1 are not tenable in law and, as such, the motion needs to be allowed.

(3.) Shri Sancheti, learned senior counsel appearing for defendant No.1 submits that defendant No.1 is incorporated in France. It has its office in France and does not have office in India. The learned counsel, therefore, submits that defendant No.1 is not amenable to the jurisdiction of this court and, as such, in view of law laid down by the Apex Court in the case of Modi Entertainment Network v. W.S.G. Cricket Pte.Ltd., 2003 AIR(SC) 1177, an antisuit injunction cannot be granted by this Court. Learned counsel also relying on the judgment of the learned single Judge of this Court in case of Shree Precoated Steels Ltd. v. Macsteel International Far East Ltd., 2008 2 BCR 681submits antisuit injunction as sought cannot be granted. Learned counsel submits that since there is no pleading in the plaint regarding lifting of corporate veil the injunction as granted cannot be granted against defendant No.1. Learned counsel in this respect relies on the judgment of the Apex Court in the case of Delhi Development Authority v. Skiper Construction Company, 1996 AIR(SC) 2005. Learned counsel relying on the provision of section 16 read with section 5 of the said Act submits that by now it is a settled principle of law that in arbitration matters, the court should not interfere. Learned counsel relied on the following judgments: Kvarener Cemevatation India Ltd. v. Bajrangalal Agarwal,2001 3 RAJ 414 ; M/s.S.B.P. & Co. v. M/s.Patel Engineering Ltd., 2006 AIR(SC) 450; Shree Subhlaxmi Fabrics Pvt.Ltd. v. Chan Mal Baradia, 2005 2 UC 807; and Sandip Industries v. Sperpack, 2008 6 MhLJ 313. Learned counsel further submits that PartI of the said Act is applicable to the International Arbitration and, therefore, in view of provisions of section 5 and 16 of the said Act, the interference by this Court is not permissible. Learned counsel relies on the judgments of Apex Court in the case ofBhatia International v. Bulk Trading S.A., 2002 AIR(SC) 1432 and Venture Global Engineering v. Satyam Computer Service Ltd., 2008 AIR(SC) 1061and judgment of learned single Judge of the Delhi High Court in the case of Aitreya Ltd. v. Dans Energy Pvt.Ltd., 2012 127 DRJ 565.