TULIP HOTELS PVT LTD Vs. TRADE WINGS LTD

JUDGEMENT

(1.) The matter is being argued in the background of earlier adjudication in Arbitration Application No. 4 of 2007 on 19/3/2008 by this Court holding that said application filed before it by the present Applicants was premature because as per agreement between parties the arbitration was contemplated only after failure of conciliation held in terms of Section 62 of Indian Arbitrationand Conciliation Act, 1996, hereinafter referred to as 1996 Act or Arbitration Act. This Court then left present Applicants i.e. M/s Tulip free to invoke said proceedings and all other contentions raised before it open. The two appeals against orders under Section 9 of 1996 Act earlier ordered to be heard with this application have been separated with consent of parties on 17/7/2009. The respective Senior Advocates have completed their arguments after this order.

(2.) In view of this position and as contesting parties are before this Court 3 through their respective learned Senior Advocates and existence of the arbitration clause vide Clause No. 19 in the agreement is not in dispute, I have tried to find out the areas in dispute so as to curtail unnecessary lengthy arguments. It appears that the Respondents claim a right in them to refuse to conciliate and thereby the frustration of arbitration clause itself and bar of limitation as also the nonreferrability of disputes to arbitration i.e. absence of arbitrable disputes in/as their defence. In the alternative, a Civil Suit filed by them in the matter claiming reliefs against the Applicants and strangers is also being pointed out stating that strangers who are necessary parties to that Suit, being not parties to arbitration agreement, can not be subjected to the arbitration. Accordingly, I have heard both the Senior Advocates. It can not be disputed that the earlier conciliation conducted by one Mr. Om Navani is already declared to be not in terms of Clause 19 of the agreement.

(3.) Shri Dessai, Senior Advocate for Tulips has pointed out that Clause 19 envisaged completion of the conciliation proceedings within one month and failing it, the agreement presumed failure thereof leaving parties to take recourse to the arbitration. After judgment dated 19/3/2008 of this Court, the Applicants issued a notice dated 21/6/2008 calling upon the Respondents to conciliate before either of two retired Hon 'ble Judges named therein and to communicate their acceptance within 10 days. Respondents replied to it on 21/6/2008 pointing out Section 62 required 30 days notice and that there were no hopes from conciliation. They also did not agree to any of the names suggested by the Applicants. The Applicants then sent their rejoinder notice on 9/7/2008 agreeing to wait for 30 days. However, on 10/7/2008 Respondents sent their negative response thereby making it clear that conciliation between the parties was not possible. Hence, after this failure of conciliation, Applicants again sought appointment of Arbitrators under said Clause 19 and approached this Court.