$~31 * IN THE HIGH COURT OF DELHI AT NEW DELHI + O.M.P. (COMM) 144/2019 INDIAN OIL CORPORATION LIMITED ........ Petitioner
Date of Decision :
5. h April, 2019 Through: Mr.Abhinav Vasisht, Sr. Adv. with Mr.Amit Meharia, Ms.Tannishtha Singh, Ms.Priya Singh, Advs. versus FEPL ENGINEERING (P) LIMITED & ANR. ........ RESPONDENTS
Through: Mr.Sandeep Sharma, Mr.Hunny Veer Singh, Mr.Sarthak Mannan, Ms.Konika Mitra, Advs. CORAM: HON'BLE MR. JUSTICE NAVIN CHAWLA NAVIN CHAWLA, J.
(Oral) IA49492019 Exemption allowed subject to all just exceptions. OMP(Comm.) 144/2019 & IA49482019 1. This petition under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the ‘Act’) has been filed by the petitioner challenging the Arbitral Award dated 14.12.2018 passed by the Micro and Small Enterprises Facilitation Council, Konkan Region, Thane, Maharashtra O.M.P.(Comm.) No.144/2019 Page 1 (hereinafter referred to as the ‘MSME Council’) under the provisions of the Micro, Small and Medium Enterprises Development Act, 2006 (hereinafter referred to as the ‘MSMED Act’).
2. At the outset, it was put to the learned senior counsel for the petitioner that as the Arbitral Award has been passed by the MSMED Council at Konkan, Maharashtra, this Court would lack territorial jurisdiction to entertain the present petition.
3. Learned senior counsel for the petitioner, however, placed reliance on Clauses 34 and 35 of the General Purchase Conditions (GPC) enclosed with the Tender Enquiry documents to contend that in terms thereof, this Court would have jurisdiction. Clauses 34 and 35 that have been relied upon by the learned senior counsel for the petitioner are reproduced hereinunder: “34.0 ARBITRATION AND GOVERING LAW341 Arbitration: All disputes or differences which may arise out of or in connection with or are incidental to the Agreement(s) including any dispute or difference regarding the interpretation of the terms and conditions of any clause thereof which cannot be amicably resolved between the parties may be referred to Arbitration of a person selected by the Vendor out of a panel of three persons nominated by the General Manager of the Unit or Project of Indian Oil Corporation Ltd. to which the Contract relates. The Arbitration proceedings shall be governed by and conducted in accordance with the O.M.P.(Comm.) No.144/2019 Page 2 Arbitration and Conciliation Act, 1996. The venue of the arbitration shall be [...........]. or New Delhi, India. 34.2 Governing Law: The Agreement(s) shall be construed in accordance with and governed by the laws of India. IOCL shall warrant that the terms and conditions of the Purchase Order shall be valid under existing Indian laws. 35.0 JURISDICTION to the provisions or generality of 35.1 Notwithstanding any other Court or Courts having jurisdiction to decide the disputed issue, and without prejudice the Arbitration clause, jurisdiction to decide the question(s) arising out of or relative to the Contract in all matters touching or affecting any arbitration, or arising out of or in relation to or under or in accordance with the Arbitration and Conciliation Act, 1996 or otherwise under or with reference to the Contract shall vest exclusively in the court(s) of competent civil jurisdiction at………… [where the contract(s)/Purchase Order shall be signed on behalf of IOCL]. or at New Delhi and only the said Court(s) shall have the jurisdiction to entertain and try any such actions and/or proceedings to the exclusion of all other Courts, provided that nothing herein stated shall be deemed to anywise authorise any party to seek resolution of any dispute(s) otherwise than the recourse to arbitration in accordance with the provisions of the Arbitration clause herein. Provided always that an award rendered in any arbitration proceedings arising out of or in relation to the Contract may be enforced or executed in any other country or jurisdiction including without limitation a country in which any party against whom the award is to be enforced or executed is located and a country in which the assets of any such party are located.” (Emphasis supplied) O.M.P.(Comm.) No.144/2019 Page 3 4. Learned senior counsel for the petitioner has further placed reliance on the judgments of the Supreme Court in Swastik Gases Pvt. Ltd. v. Indian Oil Corporation Ltd., (2013) 9 SCC32and Indus Mobile Distribution Pvt. Ltd. vs. Datawind Innovations Pvt. Ltd. & Ors. (2017) 7 SCC678to contend that as the ‘Seat of arbitration’ was agreed by the parties to be at Delhi, this Court would have exclusive jurisdiction to entertain the present petition.
5. I am unable to agree with the submission made by the learned senior counsel for the petitioner for more than one reason.
6. At first, it is seen that Clauses 34 and 35 of the GPC relied upon by the leaned senior counsel for the petitioner do not provide for any exclusive ‘Seat of arbitration’ nor vest exclusive jurisdiction in this Court. Clause 34 infact, leaves the Venue of arbitration as blank ‘or’ at New Delhi. Therefore, the parties were to decide on the Venue of arbitration in terms of Clause 34 GPC.
7. By not filling up the blank in Clauses 34 of the GPC, it is apparent that the parties did not arrive at a consensus or a determination on the Venue leave alone the Seat of arbitration.
8. Equally, in Clause 35 of the GPC, the blank was again not filled up by the parties, clearly showing that the parties O.M.P.(Comm.) No.144/2019 Page 4 either could not arrive at a consensus on vesting exclusive jurisdiction to any Court or did not deem it appropriate to do the same. Merely because an alternate was given for the Venue of arbitration to be at Delhi or the Court(s) at Delhi to have jurisdiction would not mean that the parties had, infact, arrived at an consensus agreement to vest exclusive jurisdiction in this Court.
9. In view of the above, the judgments of the Supreme Court in Swastik Gases (supra) and Indus Mobile (supra) would have no application.
10. This is more so because the Purchase Order in question, dated 10.03.2016, has been issued by the petitioner from its Vadodara office to the respondent at Navi Mumbai. The supply under the Purchase Order was to be made at Gujarat. Therefore, no part of the cause of action has arisen at Delhi.
11. Most importantly, the Impugned Award has been passed by MSME Council in exercise of its powers under Section 18 of the MSMED Act, which is reproduced hereinbelow: “18. Reference to Micro and Small Enterprises Facilitation Council.—(1) Notwithstanding anything contained in any other law for the time being in force, any party to a dispute may, with regard to any amount due under section 17, make a reference to the Micro and Small Enterprises Facilitation Council. (2) On receipt of a reference under sub-section (1), the Council shall either itself conduct conciliation in the O.M.P.(Comm.) No.144/2019 Page 5 matter or seek the assistance of any institution or centre providing alternate dispute resolution services by making a reference to such an institution or centre, for conducting conciliation and the provisions of Section 65 to 81 of the Arbitration and Conciliation Act, 1996 shall apply to such a dispute as if the conciliation was initiated under Part III of that Act. (3) Where the conciliation initiated under sub- section (2) is not successful and stands terminated without any settlement between the parties, the Council shall either itself take up the dispute for arbitration or refer to it any institution or centre providing alternate dispute resolution services for such arbitration and the provisions of the Arbitration and Conciliation Act, 1996 shall then apply to the dispute as if the arbitration was in pursuance of an arbitration agreement referred to in sub-section (1) of section 7 of that Act. (4) Notwithstanding anything contained in any other law for the time being in force, the Micro and Small Enterprises Facilitation Council or the Centre providing alternate dispute resolution services shall have jurisdiction to act as an Arbitrator or Conciliator under this section in a dispute between the supplied located within its jurisdiction and a buyer located anywhere in India. (5) Every reference made under this section shall be decided within a period of ninety days from the date of making such a reference.” 12. A reading of the above provision would show that the MSME Council, where the supplier is located, shall have jurisdiction in the matter. In exercise of this power, MSME Council at Thane exercised its jurisdiction in the present dispute. The Seat of arbitration, therefore, would be at Thane, O.M.P.(Comm.) No.144/2019 Page 6 Maharashtra and even applying the judgment of the Supreme Court in Indus Mobile (supra), it would only be the Courts at Thane which will have exclusive jurisdiction to entertain the present petition.
13. To hold otherwise, would infact run counter to the mandate of the MSMED Act. The MSMED Act being a special legislation dealing with the Micro, Small and Medium Enterprises, would certainly have precedence over the general law, that is the Arbitration and Conciliation Act, 1996.
14. I may also note that the petitioner has already filed a Writ Petition before the High Court of Bombay, being WP No.769/2019, challenging various orders passed by the MSME Council in course of the proceedings. The said Writ Petition is stated to be pending as on date.
15. In view of the above, I hold that this Court does not have the jurisdiction to entertain the present petition. The same is dismissed with no order as to costs. NAVIN CHAWLA, J APRIL05 2019 RN O.M.P.(Comm.) No.144/2019 Page 7