M/s. HCL Technologies Limited Vs. Madhya Pradesh Computerization of Police Society (MPCOPS)

Arbitration and Conciliation Act, 1996

Tags Arbitration

Madhya Pradesh High Court (Single Judge)

Arbitration Case, 38 of 2020, Judgment Date: Feb 26, 2021

Law Laid Down:-

Appointment of Arbitrator u/S 11(5) and (6) of the Arbitration and Conciliation Act, 1996 – Arbitration Clause 1.23 (Dispute Resolution) and sub-clause (a) whereof stipulating to first exhaust the inhouse mechanism of dispute resolution – Governance Procedure in Clause 2.5.3 of the Agreement does not provide issuing disputed notice in a particular format - Applicant invoked Clause 1.23 of the Agreement proposing the name of arbitrator to resolve the dispute – Non-applicant failed to respond to the request or otherwise failed to appoint anybody else as an arbitrator and then objected that notice did not mention invoking sub-clause (a) of Clause 1.23 of the Agreement

HELD - Even if the applicant did not mention about sub-clause (a) of Clause 1.23 of the agreement in its notice, which the respondents are relying yet it simplicitor mentioned Clause 1.23. Therefore, it could not be a reason to hold that no notice was served by the applicant on the non-applicant for invoking arbitration i.e. Clause 1.23 of the agreement - In fact, the notice which was served by the applicant on the non-applicant categorically mentioned that it was invoking arbitration clause contained in Clause 1.23 of the agreement. Nothing prevented the non-applicant if they wanted to first exhaust inhouse mechanism. The non-applicant having not acted within 30 days from the date of service of notice, thus forfeited its right to appoint the sole arbitrator in view of the ratio of the judgment of the Supreme Court in Datar Switchgears Ltd. vs. Tata Finance Ltd. (2000) 8 SCC 151 and Deep Trading Company vs. Indian Oil Corporation & others (2013) 4 SCC 35. Further HELD - Since the non-applicant itself being in dispute with the applicant, therefore, in view of the mandate of Section 12(5) read with the stipulations contained in Fifth and Seventh Schedules of the Act of 1996, it cannot now appoint the arbitrator -

Relied - TRF Limited vs. Energo Engineering Projects Ltd. (2017) 8 SCC 377 and Perkins Eastman Architects DPC vs. HSCC (India) Ltd. (2019) SCC Online SC 1517.

M/s. HCL Technologies Limited Vs. Madhya Pradesh Computerization of Police Society (MPCOPS)

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