PUNJAB AND HARYANA HIGH COURT, CHANDIGARH
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Arbitration Case Nos.108 to 100 of 2008
Date of decision: August 21, 2009.
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Transmission Corporation of Andhra Pradesh Ltd.
Versus
M/S Equipment Conductor Cables Limited.
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CORAM: Hon’ble Mr. Justice T.S.Thakur,CJ
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Present: Shri V.K.Jain, Sr.Advocate, with
Shri Pardeep Bhandari,Advocate.
Shri Hari Om Attri, Advocate, for
respondent No.1.
Shri Ajay Gupta, Addl: Advocate General,
for the State of Haryana.
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T.S.Thakur, CJ (Oral)
In these petitions filed under Section 11 of the Arbitration and
Conciliation Act, 1996, the petitioners pray for the appointment of an
independent arbitrator for adjudication of the disputes that have arisen
between the parties in relation to three different purchase orders placed by
the Transmission Corporation with respondent No.1 Company. It is not in
dispute that in terms of Section 18 of the Micro, Small and Medium
Enterprises Development Act, 2006 reference to the Micro, Small and
Medium Enterprises Facilitation Council was made to explore the
possibility of a settlement of the outstanding disputes by way of
conciliation. It is also not in dispute that one of the issues that was raised
before the said Council related to its territorial jurisdiction to entertain the
conciliation proceedings. The said issue was it appears argued by both the
sides and by an order dated 5.7.2006 decided in the affirmative holding
that the Haryana, Micro & Small Enterprise Facilitation Council had
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the jurisdiction to entertain conciliation proceedings. Further proceedings
before the Council could not however go on because of an interim order of
stay passed by this Court in these proceedings on 23.07.2008. A reading of
the order of this Court give an impression as though the Council was
proceeding with the matter without determining the question of territorial
jurisdiction, learned counsel for the respondent argued and in my opinion
rightly so that the impression created was not entirely correct in asmuch as
the Council had on 5.8.2006 after hearing arguments of both the sides
declared that it had the jurisdiction to entertain the council proceedings.
The interim order staying further proceedings before the Council was not
in that view justified.
Learned counsel for the petitioner in all these petitions argued
that the conciliation proceedings must be deemed to have failed leaving no
option except to look for a suitable Arbitrator to adjudicate upon the
disputes between the parties. In support of that submission he placed
reliance upon an order passed by the Council on 8.5.2008 in which it is
inter alia recorded that one of the parties was not agreeable to any
reconciliation. It was submitted that since one of the parties to the disputes
was not agreeable to any conciliation, it will be presumed that reconciliation
had failed. I do not think so. It is true that one of the parties has shown no
inclination to reconcile the outstanding disputes, yet it is equally true that
the Council has not so far reported failure of the conciliation proceedings.
On the contrary the Council had adjourned the matter to 8.7.2009
obviously in an attempt to make further efforts to bring about a conciliation
between the two parties. Even according to learned counsel appearing for
the Haryana Micro and Small Enterprise Facilitation Council-respondent
No.2 in these petitions no failure report has been submitted by the Council
so far and the proceedings can be resumed any time if the order passed by
this Court against the said proceedings is vacated. That being so it may be
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premature for this Court to assume that the proceedings before the Council
have indeed failed to bring about a satisfactory situation. The proper
course in my opinion is to give an opportunity to the Facilitation Council to
conclude its proceedings expeditiously. Before any resort is taken to the
provisions of Section 18 of the Micro, Small and Medium Enterprises
Development Act, 2006 read with Section 11 of the Arbitration and
Conciliation Act, 1996 for reference of disputes for arbitration.
It was then argued on behalf of the respondents that even after
the conciliation proceedings are reported to have failed, the Council may
itself decide to act as an Arbitrator or refers the disputes for arbitration to
any institution or centre providing alternate dispute resolution services.
Counsel appearing for the petitioner on the other hand argued that keeping
in view the prohibition contained in Section 80 of the Arbitration and
Conciliation Act, 1996, the council cannot act as a arbitrator in a case
where it has itself conducted conciliation proceedings. This would,
according to him, would mean that after the conciliation proceedings fail,
the council would have no right assume the role of an arbitrator and shall
have to make a adjudication of the disputes for arbitration to any institution
or centre for such arbitration.
I do not for the present propose to express any final opinion as
to the legality or legitimacy of the arbitration proceedings, if the council
chooses to assume the role of an arbitrator. Whether or not the Council
can decide to act as an arbitrator or refer it to an institution or centre
providing alternate dispute resolution services is a question which the
Council will have to answer at the appropriate stage. It is only when the
Council makes a report regarding the failure of the conciliation
proceedings and decides to take up the arbitration proceedings that the
question whether the Council can act as an arbitrator may call for
determination. Till such time, the Council has not taken a decision in that
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regard. It is premature even for this Court to express any opinion regarding
the legality of arbitration by the council. Suffice it to say that the present
petitions seeking appointment of a arbitrator are for the present not
maintainable and shall have to await conclusion of the conciliation
proceedings.
In the result, these petitions are disposed off in the following
terms:-
1. The parties shall appear before the Haryana
Micro & Small Enterprise Facilitation Council on 15.09.2009
for further directions;
2. The Council shall resume to the conciliation
proceedings and conclude the same expeditiously but not
later than three months from 15.09.2009;
3. The Council shall communicate to the parties, the
result of the conciliation proceedings and also whether the
matters in dispute, if not resolved, is being referred to
arbitration if so whether the Council would itself act as an
arbitrator or refer the same to any institution or centre
providing alternate dispute resolution services.
The parties shall have the liberty to seek appropriate redress
in appropriate proceedings before the appropriate court or forum
depending upon the decision taken by the Arbitrator. No costs.
All the pending applications are also disposed off.
A copy of the order be given dasti to the counsel for the
petitioner, under the signatures of Special Bench Secretary.
August 21, 2009 (T.S.Thakur)
Malik Chief Justice
Arb.Case No. 110 of 2008.
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Present: Shri V.K.Jain,Sr.Advocate, with
Shri Pardeep Bhandari,Advocate.
Shri Hariom Attri,Advocate, for
respondent No.1.
Shri Ajay Gupta, Addl: A.G.Haryana.
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Same order as in Arbitration case No. 108 of 2008 decided on
August 21, 2009.
August 21, 2009 (T.S.Thakur)
Malik Chief Justice
Arb.Case No. 109 of 2008.
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Present: Shri V.K.Jain,Sr.Advocate, with
Shri Pardeep Bhandari,Advocate.
Shri Hariom Attri,Advocate, for
respondent No.1.
Shri Ajay Gupta, Addl: A.G.Haryana.
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Same order as in Arbitration case No. 108 of 2008 decided on
August 21, 2009.
August 21, 2009 (T.S.Thakur) Malik Chief Justice