Full Judgment
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT THE HONOURABLE MR. JUSTICE DEVAN RAMACHANDRAN MONDAY, THE 31ST DAY OF JULY 2023 / 9TH SRAVANA, 1945 AR NO. 67 OF 2023 PETITIONER: M/S SZONE DEVELOPERS LLP ID NO. AAO-5747, HAVING ITS REGISTERED OFFICE AT ARAMANA PO, CHENAKKALANGADI, THENHIPPALAM, MALAPPURAM - 673636 REPRESENTED BY ITS DESIGNATED PARTNER MR.FIBU SUHAZ, SON OF ABDUL AZEEZ, AGED 31 YEARS, RESIDING AT ARAMANA HOUSE, CHENAKKALANGADI PO, THENHIPPALAM, MALAPPURAM DISTRICT - 673636. BY ADVS. PRAVEEN.H. G.HARIHARAN K.S.SMITHA T.T.SHANIBA AMAL DEV D E.SILPA RESPONDENTS: 1 SRI.PD RAVI SON OF DAMODARAN P, AGED 73 YEARS, ADVOCATE, RESIDING AT 48/1459, VYSRAVAM, ERANHIPALAM PO, KOZHIKODE, PIN - 673006 2 SMT.SASIKALA RAVI WIFE OF RAVI, AGED 63 YEARS, RESIDING AT 48/1459, VYSRAVAM, ERANHIPALAM PO, KOZHIKODE, PIN - 673006 BY ADV. K.PRAVEEN KUMAR THIS ARBITRATION REQUEST HAVING COME UP FOR ORDERS ON 31.07.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: :2:
DEVAN RAMACHANDRAN, J.
========================= ========================== Dated this the 31st day of July, 2023
ORDER
The petitioner asserts that Annexure I agreement has been
entered into by them with the respondents, for the purpose of joint development of the property of the latter as a residential apartment complex; and that disputes have arisen between them, which constrained them to issue Annexure II statutory notice, nominating a counsel of the Kozhikode Bar, as the sole Arbitrator to adjudicate and resolve the same.
2. The petitioner says that, however, the respondents did not
accede to their request, but caused a reply to be issued saying that they have already terminated Annexure I agreement on 21.04.2023 and, therefore, that no arbitration, based on its terms, can be taken forward. They say that respondents have also taken the stand that they will not accede to the appointment of an Arbitrator as nominated by the former; and hence that this is a fit case where this Court is now enjoined to appoint a sole Arbitrator in terms of Annexure I agreement.
3. The afore submissions of the petitioner, as made by
their learned counsel - Smt.K.S.Smitha, were controverted by Sri.K.Praveen Kumar - learned counsel for the respondents, affirming that his client has already terminated Annexure I and, :3: therefore, that no arbitration is now possible. He added that, in any event, Annexure I mandates the appointment of three Arbitrators, one each to be appointed by the parties and the 3 rd one to be appointed by the said Arbitrators; and hence that this Arbitration Request is not maintainable.
4. I have examined Annexure I, which is the agreement between the parties, and notice that Clause 9 thereof provides for the manner of Arbitration between them.
5. The afore Clause is unmistakable in its tenor that any dispute with respect to Annexure I agreement, or qua interpretation of its terms, shall be referred to an Arbitrator/Arbitrators, as provided under the Arbitration and
Conciliation Act, 1996 ('the Act' for short). It then goes on to stipulate that arbitration shall be conducted by a panel of three Arbitrators, “one each to be appointed by the land owners and the developer”, who will, in turn, appoint the 3rd Arbitrator.
6. Going by the admitted facts on record, it is limpid that
petitioner nominated their Arbitrator through Annexure II statutory notice, but requested that he be accepted as the sole Arbitrator. This was replied to by the respondents through Annexure R1, wherein, they took the stand that they will not accept the person nominated by the petitioner as the sole Arbitrator and that, in any event, the disputes are not arbitrable, because the agreement itself was terminated by them on 21.04.2023.
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7. It is, therefore, clear that both sides have not made their
nominations in terms of Clause 9 of Annexure I agreement and this is luculent from the fact that though the petitioner named a person, he was suggested as the sole Arbitrator; while the respondents took the stand that they will not accept such, nor will they nominate an Arbitrator from their side because the agreement itself has been terminated by them on 21.04.2023.
8. Going by Section 11 of the Act, it is only where the
procedure for appointment of Arbitrators is mandated will sub- clause 4 thereof apply. This has been spoken to by this Court in various judgments, including Tulsi Developers India Pvt. Ltd. v. Dr. Appu Benny Thomas [2021 (5) KHC 404].
9. In the case at hand, it is conceded that, in spite of being requested, the respondents did not nominate an Arbitrator on their
side and, therefore, that a panel could not be constituted. That apart, the stand of the respondents specifically is that they will not concede to arbitration because the agreement itself has been terminated by them on 21.04.2023.
10. It is, therefore, apodictic that jurisdiction of this Court
under Section 11 to appoint a sole Arbitrator/ panel of Arbitrators, has been now validly invoked by the petitioner; and that the only question to be decided is whether it should be a sole Arbitrator or a panel of Arbitrators, to adjudicate the disputes between the parties. :5:
11. Pertinently, Sri.K.Praveen Kumar - learned counsel for the
respondents, expressly admitted that his clients' primary objection is that the disputes are not arbitrable because, inter alia, Annexure I has been terminated by them on 21.04.2023. He then added that, if this Court is inclined to refer this matter to a sole Arbitrator, his clients will accept it provided all contentions of theirs, including that the disputes are not arbitrable and the agreement itself stands terminated, may be allowed to be impelled by them during the said process.
In the afore circumstances, since Clause 9 of Annexure I agreement has been admitted by both sides and since they are also in unison that a competent sole Arbitrator be appointed by this Court, I allow this Arbitration Request, in the following manner:
(a) I nominate Sri.Asokan K., Asoka Gardens, Thuvacode Post, Chemanchery, Kozhikode - 673 304, as the sole Arbitrator to adjudicate and resolve the disputes and
differences between the parties to this case arising from
Annexure I agreement.
(b) The Registry is directed to communicate a copy of this
order to the learned Arbitrator, within a period of two
weeks from today and to obtain a Statement of Disclosure from him under Section 11(8) read with Section 12(1) of the Arbitration and Conciliation Act, 1996.
(c) Once the Disclosure Statement is obtained from the :6:
learned Arbitrator, the Registry shall release the certified copy of this order, with a copy of the said statement appended to it, retaining the original of the same on the files of this case.
(d) The fees of the Arbitrator shall be governed by the Fourth schedule to the Arbitration and Conciliation Act, 1996.
(e) In order to enable the Arbitrator to commence the
proceedings without delay, I direct the parties to mark appearance before him at 11 am on 15.09.2023. This Arbitration Request is thus allowed. Sd/- DEVAN RAMACHANDRAN JUDGE
anm :7: APPENDIX OF AR 67/2023 PETITIONER ANNEXURES Annexure I TRUE COPY OF THE JOINT DEVELOPMENT AGREEMENT DATED 23RD JANUARY 2023 ENTERED INTO BETWEEN THE PETITIONER AND THE RESPONDENTS Annexure II TRUE COPY OF THE LAWYER NOTICE ALONG WITH POSTAL RECEIPT ISSUED ON BEHALF OF THE PETITIONER TO THE RESPONDENTS Annexure III TRUE COPY OF THE APPLICATION FILED UNDER SECTION 9 BEFORE THE COMMERCIAL COURT, KOZHIKODE BY THE APPLICANT RESPONDENTS' ANNEXURES Annexure R(1) TRUE COPY OF THE REPLY LEGAL NOTICE CAUSED TO BE SENT BY THE RESPONDENTS HEREIN TO THE PETITIONER DATED 21.04.2023 Annexure R(2) TRUE COPY OF THE REPRESENTATION DATED 10.03.2023 Annexure R(3) TRUE COPY OF THE LETTER NO.K-RERA/ T1/269/2023 DATED 08.05.2023 FROM K-RERA Annexure R(4) TRUE COPY OF THE REPLY DATED 16.05.2023