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FA/1374/1990 4/ 4 JUDGMENT
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
FIRST
APPEAL No. 1374 of 1990
With
FIRST
APPEAL No. 369 of 1991
To
FIRST
APPEAL No. 370 of 1991
For
Approval and Signature:
HONOURABLE
MR.JUSTICE KS JHAVERI
=========================================================
1
Whether
Reporters of Local Papers may be allowed to see the judgment ?
2
To
be referred to the Reporter or not ?
3
Whether
their Lordships wish to see the fair copy of the judgment ?
4
Whether
this case involves a substantial question of law as to the
interpretation of the constitution of India, 1950 or any order
made thereunder ?
5
Whether
it is to be circulated to the civil judge ?
=========================================================
STATE
OF GUJARAT - Appellant(s)
Versus
ASSOCIATED
BUSINESS CORPN. & 1 - Defendant(s)
=========================================================
Appearance
:
MR NEERAJ
SONI AGP for Appellant(s) : 1,
MR MG NAGARKAR for Defendant(s) :
1,
None for Defendant(s) :
2,
=========================================================
CORAM
:
HONOURABLE
MR.JUSTICE KS JHAVERI
Date
: 02/12/2010
ORAL
JUDGMENT
All
these appeals involve common questions on law and facts and
therefore, they are disposed of by this common judgment.
1.
The question that has arose for my consideration in these appeals is
whether the assent of a party to a dispute arising out of a contract
containing express provision of an arbitration clause is necessary
when a reference of the dispute is to be made to arbitration.
2. The
facts in brief are that the appellant-State and the
respondent-Company had entered into a contract agreement for carrying
out certain works in an irrigation project. While the work was in
progress, dispute arose between the parties, which was referred to
the competent authority. However, when the dispute could not be
settled, it was referred to an Arbitrator, as per the provisions of
the contract agreement. The Arbitrator published his award in the
arbitration case. Thereafter, applications were filed before the
Court below praying to pass a decree in terms of the said award. The
Court below, after appreciating the documents on record, passed a
decree in terms of the award of the Arbitrator except the claim
regarding interest.
3. The
appellant-State has challenged the judgment and decree passed by the
Courts below mainly on the ground that the appellant-State had not
granted its assent for appointment of the Arbitrator as named by the
Contractor and also that the award passed by the Arbitrator is
ex-parte inasmuch as the appellant-State was not heard.
4. Heard
learned counsel for the respective parties and perused the documents
on record. The appointment of an Arbitrator could be said to be
illegal if the provisions of Clause nos.51 & 52 of the contract
agreement entered into between the parties have not been duly
followed. In the present case, I find that the said two provisions of
the contract agreement have been duly followed while appointing the
Arbitrator.
5. If
the appellant-State had grievance against the said appointment, then
it had the remedy to move appropriate application before the
competent Court u/s.5 or 11 of the Arbitration Act at the relevant
point of time. However, no such steps were taken by the
appellant-State. Therefore, at this stage, it does not lie in the
mouth of the appellant to say that the appointment of the Arbitrator
is bad in law or illegal.
6. Considering
the facts of the case, it would be relevant to refer to a decision of
the Apex Court in the case of Banwari Lal Kotiya v. P.C.
Aggarwal, AIR 1985 S.C. 1003. In that case, it has been held
that where the arbitration agreement conforms to the definition given
in Section 2(a) of the Arbitration Act, the party desiring
arbitration can straightway approach the arbitrator/s and therefore,
resort to Section 20 of the said Act is unnecessary; and the aspect
that differences or disputes actually arose subsequently would be
inconsequential because the arbitration agreement, as defined in
Section 2(a), covers not merely present but, future differences also.
Accordingly, it was held that the arbitration clause contained in the
Contract Notes read with the relevant Bye-laws of the Delhi Stock
Exchange was not a bare arbitration agreement but was clearly an
arbitration agreement as defined in S. 2(a) and resort, therefore, to
S. 20 was not necessary.
6.1 In
this case, the arbitration clause contained in the contract agreement
entered into between the parties was clearly an arbitration agreement
falling within the definition of S. 2(a) of the said Act. Hence, the
consent of the appellant-State was not necessary before making the
reference of the dispute to the Arbitrator.
7. In
view of the above discussion, I find no merits in the present
appeals. Hence, the appeals are dismissed. No orders as to costs.
[K.
S. JHAVERI, J.]
Pravin/*
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