{"id":181573,"date":"2011-11-25T00:00:00","date_gmt":"2011-11-24T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/ms-reva-electric-car-co-p-ltd-vs-ms-green-mobil-on-25-november-2011"},"modified":"2015-12-05T03:14:05","modified_gmt":"2015-12-04T21:44:05","slug":"ms-reva-electric-car-co-p-ltd-vs-ms-green-mobil-on-25-november-2011","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/ms-reva-electric-car-co-p-ltd-vs-ms-green-mobil-on-25-november-2011","title":{"rendered":"M\/S Reva Electric Car Co.P.Ltd vs M\/S Green Mobil on 25 November, 2011"},"content":{"rendered":"
Supreme Court of India<\/div>\n
M\/S Reva Electric Car Co.P.Ltd vs M\/S Green Mobil on 25 November, 2011<\/div>\n
Bench: Surinder Singh Nijjar<\/div>\n
                                                                                           REPORTABLE\n\n\n\n\n                      IN THE SUPREME COURT OF INDIA\n\n                        CIVIL ORIGINAL JURISDICTION\n\n\n\n\n                  ARBITRATION PETITION NO.18 OF 2010\n\n\n\n\nM\/s. Reva Electric Car Co. P. Ltd.                                ...Petitioner\n\n\n                                 VERSUS\n\n\nM\/s. Green Mobil                                                  ...Respondent\n\n\n\n\n\n                                       O R D E R\n<\/pre>\n
SURINDER SINGH NIJJAR, J.\n<\/p>\n
1.    The   petitioner   has   filed   the   present   application   under   Sections <\/p>\n
11(4)   and   (6)   of   the   Arbitration   and   Conciliation   Act,   1996   read   with <\/p>\n
paragraph 2 of the Appointment of the Arbitrators by the Chief Justice of <\/p>\n
India   Scheme,   1996.   It   is   stated   that   the   parties   had   entered   into   a <\/p>\n
legally   valid   and   enforceable   Memorandum   of   Understanding   (`MOU’) <\/p>\n
                                     – 1 –\n<\/p>\n
dated   25th  September,   2007,   providing,  inter   alia,  for   the   respective <\/p>\n
obligation   of   both   the   parties   in   connection   with   the   marketing   of   the <\/p>\n
cars   of  the   petitioner.   Though  the   term  of  the  MOU   was  till   December, <\/p>\n
2007, it was extended by the acts of the parties in terms of Clause 2 of <\/p>\n
the MOU.\n<\/p>\n
2.    The  petitioner  makes   a  reference  to  various  requests  made  by  the <\/p>\n
respondent for supply of cars in terms of MOU on 22nd  April, 2008; 24th <\/p>\n
August,   2008;   and   1st  April,   2009.   The   petitioner   further   claims   that <\/p>\n
some   time   in   September   2009,   disputes   arose   between   the   parties.\n<\/p>\n
Numerous          e-mails were exchanged between the parties, apart from <\/p>\n
the   personal   discussions   between   their   representatives,   touching   and <\/p>\n
covering the disputes.  It is the petitioner’s claim that during the term of <\/p>\n
MOU,   merely   15   cars   of   the   petitioner   had   been   sold   in   the   Belgium <\/p>\n
Region.   The   petitioner,   therefore,   claimed   that   the   respondent   did   not <\/p>\n
have   in   place   the   necessary   resources   to   build   the   brand   of   the <\/p>\n
petitioner. Consequently, through e-mail dated 25th September, 2009 the <\/p>\n
petitioner   requested   the   respondent   to   immediately   cease   sales   and <\/p>\n
                                     – 2 –\n<\/p>\n
marketing activities on its behalf and take necessary steps of providing <\/p>\n
after   sales   and   service   to   existing   car   owners,   till   such   time   the <\/p>\n
petitioner appointed its new distributor.    The petitioner claims that the <\/p>\n
aforesaid   e-mail   duly   constituted   the   termination   of   the   contractual <\/p>\n
relationship between the parties as covered under the MOU.\n<\/p>\n
3.    As   a   consequence   of   the   aforesaid   termination,   the   parties   have <\/p>\n
exchanged various e-mails raising claims and counter claims on 6th  \/7th <\/p>\n
\/8th October, 2009.\n<\/p>\n
4.    The  petitioner  further   claims  to  have  received  a Writ   of Summons <\/p>\n
dated   14th  January,   2010   of   legal   proceedings   initiated   by   the <\/p>\n
respondent in Belgium before the First Divisional Court, Room A of the <\/p>\n
Commercial   Court   in   Brussels.   According   to   the   petitioner,   the   claims <\/p>\n
made by the respondent before the Commercial Court, Brussels disclose <\/p>\n
that   the   respondent   instituted   the   legal   proceedings  inter   alia  claiming <\/p>\n
damages from the petitioner on account of termination of the MOU dated <\/p>\n
25th  September,   2007.       On   15th  March,   2010,   the   counsel   for   the <\/p>\n
                                    – 3 –\n<\/p>\n
respondent   sent   an   e-mail   communication   that   the   respondent   was <\/p>\n
willing  to  negotiate  a global settlement with  the  petitioner  and that the <\/p>\n
respondent through its counsel would be available to discuss any such <\/p>\n
proposal. According to the petitioner, the aforesaid communication also <\/p>\n
acknowledges the fact that the rights and obligation of both the parties <\/p>\n
were   covered   by   the   distributorship   agreement,   i.e.   the   MOU,   which <\/p>\n
stood duly terminated.\n<\/p>\n
5.    The   petitioner   thereafter   issued   a   notice   dated     24th  March,   2010 <\/p>\n
through   its   counsel   in   terms   of   Clause   11   of   the   MOU   invoking <\/p>\n
arbitration under the MOU and referring all disputes between the parties <\/p>\n
to   arbitration.   The   petitioner   in   fact   nominated   Mr.   Justice   Jayasimha <\/p>\n
Babu   (Retired)   as   the   Sole   Arbitrator,   and   failing   confirmation   by   the <\/p>\n
respondent,   as   the   arbitrator   of   the   petitioner   on   the   three   member <\/p>\n
Arbitral Tribunal to be constituted in terms of Clause 11.\n<\/p>\n
                                     – 4 –\n<\/p>\n
6.    The respondent through its counsel sent a reply to the notice dated <\/p>\n
7th April, 2010 denying existence of any contractual relationship between <\/p>\n
the parties on the date of termination of MOU on 25th September, 2009.\n<\/p>\n
7.    The   petitioner,   therefore,   filed   Arbitration   Application   No.576   of <\/p>\n
2010   under   Section   9   of   the   Arbitration   and   Conciliation   Act,   1996 <\/p>\n
before   the   Court   of   the   Principal   City   Civil   &   Sessions   Judge   at <\/p>\n
Bangalore praying for an order of injunction restraining the respondent <\/p>\n
from   proceeding   with   the   legal   proceedings   initiated   before   the   First <\/p>\n
Divisional Court, Room A of Commercial Court of Brussels, Belgium.\n<\/p>\n
8.    The petitioner had also moved I.A.No.1 in the aforesaid suit dated <\/p>\n
19th  April,   2010   seeking   an   order   of   temporary   injunction   which   was <\/p>\n
granted by the Principal City Civil & Sessions Judge at Bangalore on 21st <\/p>\n
April, 2010. Thereafter the petitioner has moved the present application <\/p>\n
for   appointment   of   the   Arbitrator   in   terms   of   Clause   11   of   the   MOU <\/p>\n
which reads as under:-\n<\/p>\n
      “11. Governing Law and Jurisdiction  <\/p>\n<\/blockquote>\n
                                     – 5 –\n<\/p><\/blockquote>\n
\n      i.   This   MOU   shall   be   construed   and   enforced   in   accordance <\/p>\n
      with the laws of India.\n<\/p><\/blockquote>\n
\n
      ii.    In   the   event   of   any   dispute   or   difference   arising   at   any <\/p>\n
      time   between   the   parties   hereto   as   to   the   construction, <\/p>\n
      meaning or effect of this Agreement or thing contained herein <\/p>\n
      or   the   rights,   duties,   liabilities   and   obligations   of   the   parties <\/p>\n
      hereto in relation to this Agreement, the same shall be referred <\/p>\n
      to a single arbitrator,  in case the parties  can agree upon one <\/p>\n
      (1) within a period of thirty days upon being called by a party <\/p>\n
      to do so and failing such agreement to three (3) arbitrators one <\/p>\n
      (1) each to be appointed by GREENMOBIL and RECC and the <\/p>\n
      third to be appointed by the two arbitrators so appointed. The <\/p>\n
      award passed by such arbitrator(s)  shall be final and binding <\/p>\n
      on both the parties.\n<\/p><\/blockquote>\n
\n
      All such arbitration proceedings shall be held in Bangalore as <\/p>\n
      per   the   Arbitration   and   Conciliation   Act,   1996   as   amended <\/p>\n
      from time to time.”\n<\/p><\/blockquote>\n
\n<\/blockquote>\n
9.    In reply  to the  aforesaid  petition,  the  respondent  claimed  that the <\/p>\n
MOU dated  25th  September, 2007 expired on 31st  December, 2007. The <\/p>\n
petition does not clearly set out the claim or the period of the claim but <\/p>\n
the   documents   and   implication   of   the   contents   of   the   present   petition <\/p>\n
seem   to   indicate   that   the   claim   of   the   petitioner   is   in   respect   of   the <\/p>\n
commercial distribution of the cars which commenced from 1st January, <\/p>\n
2008 i.e. after the expiry of Memorandum of understanding. It is also the <\/p>\n
plea   of   the   respondent   that   the   MOU   relate   to   a   test   and   trial   period <\/p>\n
                                       – 6 –\n<\/p>\n
which came to an end on 31st  December, 2007, after which the parties <\/p>\n
decided   to   enter   into   a   distribution   agreement   which   was   sent   by   the <\/p>\n
petitioner to the respondent on 15th  November, 2007, i.e., 15 days prior <\/p>\n
to the expiry of the MOU. Therefore, the arbitration clause relied upon by <\/p>\n
the   petitioner   does   not   cover   any   disputes\/claims   that   relate   to   any <\/p>\n
period   beyond   31st  December,   2007.   It   is   further   claimed   that   the <\/p>\n
petition is only a counterblast to the proceedings filed by the respondent <\/p>\n
before   the   Commercial   Court   at   Brussels.   This,   according   to   the <\/p>\n
respondent, is evident from the fact that the respondent had instituted <\/p>\n
the   proceedings   in   the   Commercial   Court   at   Brussels   on   14th  January, <\/p>\n
2010;   the   petitioner   was   intimated   about   the   said   proceedings   vide     e-\n<\/p>\n
mail   dated   15th  March,   2010;   and   the   notice   invoking   the   arbitration <\/p>\n
clause in the MOU is dated 24th  March, 2010. It is, therefore, clear that <\/p>\n
the   arbitration   clause   is   invoked   only   to   avoid   proceedings   before   the <\/p>\n
Commercial   Court   at   Brussels.   It   is   emphasised   that   the   proceedings <\/p>\n
before   the   Commercial   Court   at   Brussels   related   to   the   period   beyond <\/p>\n
the   MOU   when   the   parties   had   commenced   work   of   distributorship   or <\/p>\n
dealership after the test trial period under the MOU had come to an end.\n<\/p>\n
                                     – 7 –\n<\/p>\n
10.    I have heard the learned counsel for the parties.\n<\/p>\n
11.     Mr. Narasimha, learned senior counsel appearing for the petitioner <\/p>\n
submits   that   the   averments   made   by   the   respondent   in   reply   to   the <\/p>\n
petition   make   it   abundantly   clear   that   the   disputes   pertained   to   the <\/p>\n
MOU     dated   25th  September,   2007.   According   to   the   learned   counsel, <\/p>\n
there   was   no   fresh   agreement   entered   into   between   the   parties.   Cars <\/p>\n
were being supplied to the respondent in terms of Clause 2 of the MOU.\n<\/p>\n
Making   a   reference   to   Clause   2,   learned   counsel   submits   that   the <\/p>\n
aforesaid clause makes it clear that the MOU was effective for a period of <\/p>\n
three to six months, from the date of arrival of the cars in Belgium.  This <\/p>\n
term was to be considered as the trial period. On completion of the trial <\/p>\n
period   but   not   later   than       3rd  December,   2007,   the   parties   were   to <\/p>\n
mutually   decide   to   continue   the   marketing,   sales,   and   service   of   the <\/p>\n
work hours by the respondent. They were also to enter into a fresh long <\/p>\n
term   agreement   on   mutually   agreed   terms   and   conditions.   He   submits <\/p>\n
that till the date of the termination of the MOU, no fresh agreement had <\/p>\n
                                     – 8 –\n<\/p>\n
been   entered   into   between   the   parties.   Relying   on   the   last   sentence   of <\/p>\n
the Clause 2, Mr. Narasimha submits that it  was the  sole discretion of <\/p>\n
the petitioner to extend the MOU in case the petitioner believed that the <\/p>\n
additional   time   is   required   to   complete   the   trial   period.   The   aforesaid <\/p>\n
portion of Clause 2 is as under :-\n<\/p>\n
       “RECC, at its sole discretion, may decide to extend the MOU if <\/p>\n
       RECC believes that additional time is required to complete the <\/p>\n
       trial period.”\n<\/p><\/blockquote>\n
\n<\/blockquote>\n
12.    He   further   submits  that  although  the   cars   were  being supplied  to <\/p>\n
the   respondent   but   the   petitioner   was   not   satisfied   with   the   progress <\/p>\n
made   in   the   number   of   cars   sold   by   the   respondent.   Therefore,   the <\/p>\n
respondent was constrained to terminate the MOU, after a period of two <\/p>\n
years from the commencement.\n<\/p>\n
13.    According   to   Mr.   Narasimha,   respondent   has   initiated   the <\/p>\n
proceedings in the Brussels Court only to pre-empt the initiation of legal <\/p>\n
proceedings   by   the   petitioner.   He   points   out   that   the   pleadings   in   the <\/p>\n
Writ of Summons, clearly show: that the respondent was only concerned <\/p>\n
with   the   effect   of   the   termination   and   not   the   period   of   the   MOU.\n<\/p>\n
                                     – 9 –\n<\/p>\n
Respondent   has   admitted   that   the   contractual   relationship   started   in <\/p>\n
2007.   The respondent has admitted  that there is no other subsequent <\/p>\n
agreement.     In   Paragraph   18   of   the   Writ   of   Summons,   the   respondent <\/p>\n
admits   that   the   contractual   relationship   was   subsisting   till   September, <\/p>\n
2009.  In Paragraph 30, it is admitted by the respondent that “the party <\/p>\n
summoned   below   terminated   the   contract   in   an   untimely   and   brutal <\/p>\n
manner on 25th September, 2009”.\n<\/p>\n
14.    He   points   out   that   the   disputes   have   arisen   in   relation   to   the <\/p>\n
termination   of   the   MOU   and  the   consequences   thereof.     Such  disputes <\/p>\n
are   clearly   covered   by   the   arbitration   clause   which   clearly   provides   for <\/p>\n
resolution   of   disputes   through   arbitration.   The   clause   provides   that   in <\/p>\n
the   event   of   any   dispute   or   difference  arising   at   any   time  between   the <\/p>\n
parties in relation to the agreement shall be referred to a Sole Arbitrator.\n<\/p>\n
The clause, according to the learned senior counsel, is not limited to the <\/p>\n
disputes relating only to the initial period of the MOU                      till <\/p>\n
31st December 2007.\n<\/p>\n
                                     – 10 –\n<\/p>\n
15.     He submits irrespective of whether the MOU is now in existence or <\/p>\n
not, the Arbitration clause would survive.   He relies on the decisions of <\/p>\n
this   Court   in   the   cases   of  Bharat   Petroleum   Corporation   Ltd.  Vs. <\/p>\n
Great
\n              Eastern Shipping Company Ltd.1
\n                                                            and Everest Holding Limited <\/p>\n
Vs.  Shyam
\n                        Kumar   Shrivastava   &   Ors.2
\n                                                               He   further   submits   that   this <\/p>\n
Court   is   required   to   refer   the   disputes   between   the   parties   to   the   Sole <\/p>\n
Arbitrator, without any in-depth examination of the disputes.  The Court <\/p>\n
is   merely   to   be   satisfied   that   the   disputes   fall   within   the   ambit   of   the <\/p>\n
Arbitration   Clause.     In   support   of   this   submission,   he   relies   on   the <\/p>\n
judgment of this Court in Brigadier Man Mohan Sharma, FRGS (Retd.) <\/p>\n
Vs.  Lieutenan
\n                          t   General   Depinder   Singh3
\n                                                                .    He   also   relies   on   the <\/p>\n
judgment   in   the   case   of  National   Insurance   Company   Limited  Vs. <\/p>\n
Boghara
\n                 Polyfab   Private   Limited4
\n                                                     ,   in   support   of   the   submission   all <\/p>\n
disputes   are   such   which   need   to   be   decided   by   the   Sole   Arbitrator   on <\/p>\n
merits, and can not be decided by this Court in a petition under Section <\/p>\n
11(4)   and   6   of   the   Arbitration   and   Conciliation   Act,   1996.     Learned <\/p>\n
1 2008 (1) SCC 503<\/p>\n
2 2008 (16) SCC 774<\/p>\n
3 2009 (2) SCC 600<\/p>\n
4 2009(1) SCC 267<\/p>\n
                                         – 11 –\n<\/p>\n
counsel further submits that in accordance with the aforesaid clause the <\/p>\n
petitioner   had   already   nominated   the   Sole   Arbitrator.   The   respondent <\/p>\n
has, however, not accepted the aforesaid arbitrator. At the same time, it <\/p>\n
had expressed its willingness to negotiate the global settlement with the <\/p>\n
petitioner.\n<\/p>\n
16.    On the other hand, Ms. Tasneem Ahamadi, has submitted that the <\/p>\n
MOU having come to an end by efflux of time, there was no question of <\/p>\n
any  termination   as  claimed   by  the  petitioner.  She  further   submits  that <\/p>\n
the   notice   invoking   arbitration   was   sent   only   as   a   counterblast   to   the <\/p>\n
summons   received   by   the   petitioner   from   the   Brussels   Commercial <\/p>\n
Court. Learned counsel further submitted that the disputes which form <\/p>\n
the basis of the claim in the Brussels Commercial Court pertained to a <\/p>\n
period   subsequent   to   the   period   covered   by   the   MOU.   The   arbitration <\/p>\n
clause in the MOU relates only to disputes which relate to the test and <\/p>\n
trial period.   Hence, an arbitrator can not be appointed for settlement of <\/p>\n
disputes   which   occurs   \/   relate   to   a   period   after   31st  December,   2007.\n<\/p>\n
The   disputes   raised   before   the   Commercial   Court   at   Brussels   are   not <\/p>\n
                                     – 12 –\n<\/p>\n
covered by the arbitration clause in the MOU.  She had made a detailed <\/p>\n
reference to numerous  e-mails exchanged between the parties to submit <\/p>\n
that the parties had in fact entered into a long term contract. This was <\/p>\n
only   to   be   reduced   to   a   formal   document.   Since   the   disputes   are   not <\/p>\n
covered by the arbitration clause, there can be no reference. In support <\/p>\n
of the aforesaid submission, learned counsel relies on a judgment of this <\/p>\n
Court  in the case of  SBP & Co.   Vs.   Patel
\n                                                        Engineering Ltd. & Anr.5
\n                                                                                           .\n<\/p>\n
In view of the law laid down in the aforesaid judgment, according to the <\/p>\n
learned counsel, the arbitration petition deserves to be dismissed.\n<\/p>\n
17      I have considered the submissions made by the learned counsel for <\/p>\n
the parties. It appears that the submissions made by Ms. Ahamadi that <\/p>\n
the question with regard to the existence of a valid arbitration agreement <\/p>\n
would have to be decided by this Court, is not without merit. This Court <\/p>\n
has   on   a   number   of   occasions   examined   the   scope   and   ambit   of   the <\/p>\n
jurisdiction of the Chief Justice or his designate under Section 11 of the <\/p>\n
Arbitration   and   Conciliation   Act,   1996.   A   reference   in   this   connection <\/p>\n
5 2005 (8) SCC 618<\/p>\n
                                    – 13 –\n<\/p>\n
can be made to the judgment of this Court in SBP & Co. (supra) wherein <\/p>\n
a Constitution Bench of this Court has clearly held as under:\n<\/p>\n
     “39.  It  is   necessary   to  define   what   exactly   the   Chief   Justice, <\/p>\n
     approached with an application under Section 11 of the Act, is <\/p>\n
     to   decide   at   that   stage.   Obviously,   he   has   to   decide   his   own <\/p>\n
     jurisdiction in the sense whether the party making the motion <\/p>\n
     has   approached   the   right   High   Court.   He   has   to   decide <\/p>\n
     whether   there   is   an   arbitration   agreement,   as   defined   in   the <\/p>\n
     Act and whether the person who has made the request before <\/p>\n
     him,   is   a   party   to   such   an   agreement.   It   is   necessary   to <\/p>\n
     indicate   that   he   can   also   decide   the   question   whether   the <\/p>\n
     claim was a dead one; or a long-barred claim that was sought <\/p>\n
     to be resurrected and whether the parties have concluded the <\/p>\n
     transaction   by   recording   satisfaction   of   their   mutual   rights <\/p>\n
     and   obligations   or   by   receiving   the   final   payment   without <\/p>\n
     objection.   It   may   not   be   possible   at   that   stage,   to   decide <\/p>\n
     whether   a   live   claim   made,   is   one   which   comes   within   the <\/p>\n
     purview of the arbitration clause. It will be appropriate to leave <\/p>\n
     that question to be decided by the Arbitral Tribunal on taking <\/p>\n
     evidence,   along   with   the   merits   of   the   claims   involved   in   the <\/p>\n
     arbitration.   The   Chief   Justice   has   to   decide   whether   the <\/p>\n
     petitioner   has   satisfied   the   conditions   for   appointing   an <\/p>\n
     arbitrator   under   Section   11(6)   of   the   Act.   For   the   purpose   of <\/p>\n
     taking a decision on these aspects, the Chief Justice can either <\/p>\n
     proceed on the basis of affidavits and the documents produced <\/p>\n
     or  take  such  evidence  or  get  such  evidence  recorded,   as  may <\/p>\n
     be necessary. We think that adoption of this procedure in the <\/p>\n
     context of the Act would best serve the purpose sought to  be <\/p>\n
     achieved   by   the   Act   of   expediting   the   process   of   arbitration, <\/p>\n
     without too many approaches to the court at various stages of <\/p>\n
     the proceedings before the Arbitral Tribunal.”<\/p>\n<\/blockquote>\n
                                    – 14 –<\/p>\n
In   the   case   of  National   Insurance   Co.   Ltd.   (supra),   this   Court   again <\/p>\n
examined the question with regard to the scope of the jurisdiction under <\/p>\n
Section   11(6).   In   doing   so,   this   Court   explained   the   ratio   of   the <\/p>\n
Constitution Bench in  SBP & Co.  (supra). In Para 21 of the Judgment, <\/p>\n
the   power   of   the   Arbitral   Tribunal   in   cases   where   the   disputes   are <\/p>\n
referred   to   arbitration   without   the   intervention   of   the   court   has   been <\/p>\n
distinguished   from   the   power   in   matters   where   the   intervention   of   the <\/p>\n
court   is   sought   for   appointment   of   an   Arbitral   Tribunal.   In   case   where <\/p>\n
the   matters   are   sought   to   be   referred   to   arbitration  without   the <\/p>\n
intervention   of   the   court  it   has   been   held   that   the   Arbitral   Tribunal <\/p>\n
can decide the following questions affecting its jurisdiction:  (a) whether <\/p>\n
there is an arbitration agreement; (b) whether the arbitration agreement <\/p>\n
is valid; (c) whether the contract in which the arbitration clause is found <\/p>\n
is   null   and   void,   and   if   so,   whether   the   invalidity   extends   to   the <\/p>\n
arbitration clause also.\n<\/p>\n
18.    In matters, where the intervention of the Chief Justice of India has <\/p>\n
been sought for appointment of a sole arbitrator under Section 11(4), (5) <\/p>\n
                                     – 15 –\n<\/p>\n
and   (6)   of   the   Arbitration   Act,  1996,   the   Chief   Justice   or   his   designate <\/p>\n
will   have   to   decide   certain   preliminary   issues.     It  would   be   apposite   to <\/p>\n
notice   here   the   relevant   observations   made   in   Para   22,   which   are   as <\/p>\n
follows :-\n<\/p>\n
      “22.  This   Court   identified   and   segregated   the   preliminary <\/p>\n
      issues   that   may   arise   for   consideration   in   an   application <\/p>\n
      under   Section   11   of   the   Act   into   three   categories,   that   is,   (i) <\/p>\n
      issues   which   the   Chief   Justice   or   his   designate   is   bound   to <\/p>\n
      decide;   (ii)   issues   which   he   can   also   decide,   that   is,   issues <\/p>\n
      which he may choose to decide; and (iii) issues  which should <\/p>\n
      be left to the Arbitral Tribunal to decide.<\/p>\n
      22.1.  The   issues   (first   category)   which   the   Chief   Justice\/his <\/p>\n
      designate will have to decide are:\n<\/p><\/blockquote>\n
      (a) Whether the party making the application has approached <\/p>\n
      the appropriate High Court.\n<\/p><\/blockquote>\n
      (b) Whether there is an arbitration agreement and whether the <\/p>\n
      party who has applied under Section 11 of the Act, is a party <\/p>\n
      to such an agreement.\n<\/p><\/blockquote>\n
\n
      22.2. The issues (second category) which the Chief Justice\/his <\/p>\n
      designate may choose to decide (or leave them to the decision <\/p>\n
      of the Arbitral Tribunal) are:\n<\/p><\/blockquote>\n
      (a)   Whether   the   claim   is   a   dead   (long-barred)   claim   or   a   live <\/p>\n
      claim.\n<\/p><\/blockquote>\n
      (b)          Whether         the         parties         have         concluded         the <\/p>\n
      contract\/transaction by recording satisfaction of their mutual <\/p>\n
      rights and obligation or by receiving the final payment without <\/p>\n
      objection.\n<\/p><\/blockquote>\n
\n<\/blockquote>\n
                                          – 16 –\n<\/p><\/blockquote>\n
\n      22.3.  The issues (third category)  which the  Chief  Justice\/his <\/p>\n
      designate should leave exclusively to the Arbitral Tribunal are:<\/p>\n<\/blockquote>\n
      (i) Whether a claim made falls within the arbitration clause (as <\/p>\n
      for example, a matter which is reserved for final decision of a <\/p>\n
      departmental   authority   and   excepted   or   excluded   from <\/p>\n
      arbitration).\n<\/p><\/blockquote>\n
      (ii) Merits or any claim involved in the arbitration. ”<\/p>\n<\/blockquote>\n
These   observations   were   further   reiterated   by   this   Court   in   the   case   of <\/p>\n
A.P. Tourism Development Corporation Ltd. Vs. Pampa Hotels Ltd.6.\n<\/p>\n
The   aforesaid   ratio   of   law   has   been   reiterated   by   this   Court   in  Alva  <\/p>\n
Aluminium   Limited,   Bangkok  Vs.  Gabriel   India           Limited7.   Upon <\/p>\n
consideration of the entire case law, it has been observed as follows :-\n<\/p>\n
      “18.  It is in the light of above pronouncements, unnecessary <\/p>\n
      to   delve   any   further   on   this   issue.   It   is   clear   that   once   the <\/p>\n
      existence   of   the   arbitration   agreement   itself   is   questioned   by <\/p>\n
      any  party  to   the   proceeding  initiated  under   Section   11  of  the <\/p>\n
      Act,   the   same   will   have   to   be   decided   by   the   Chief <\/p>\n
      Justice\/designate   as   the   case   may   be.   That   is   because <\/p>\n
      existence   of   an   arbitration   agreement   is   a   jurisdictional   fact <\/p>\n
      which   will   have   to   be   addressed   while   making   an   order   on   a <\/p>\n
      petition under Section 11 of the Act.”\n<\/p><\/blockquote>\n
\n<\/blockquote>\n
6 [2010 (5) SCC 425].\n<\/p>\n
7 [2011 (1) SCC 167].\n<\/p>\n
                                      – 17 –\n<\/p>\n
19.    In  view  of the  aforesaid  authoritative dicta, the submission of  Ms. <\/p>\n
Ahamadi has to be accepted that in a petition under Sections 11(4)(5)(6) <\/p>\n
and   (9)   of   the   Arbitration   Act,   1996,     it   is   for   the   Chief   Justice   of <\/p>\n
India\/his   designate   to   decide   about   the   existence   of   a   valid   arbitration <\/p>\n
agreement. Now let me examine the facts in the present case keeping in <\/p>\n
view the aforesaid well settled principles.\n<\/p>\n
20.     There is no dispute that the parties had entered into a legally valid <\/p>\n
and   enforceable   MOU   dated   25th  September,   2007.   There   is   also   no <\/p>\n
dispute   that   Clause   11   provides   that   disputes   arising   between   the <\/p>\n
parties,   at   any   time,   in   relation   to   the   MOU,   shall   be   referred   to <\/p>\n
arbitration.     Clause   (2)   of   the   MOU,   undoubtedly,   fixes   the   trial   period <\/p>\n
upto   31st  December,   2007.   However,   the   clause   also   provides   that   the <\/p>\n
petitioner   may   unilaterally   decide   to   extend   the   MOU,   if   it   considers <\/p>\n
necessary. The correspondence between the parties would show that the <\/p>\n
petitioner had proposed a draft distribution agreement to the respondent <\/p>\n
for   discussion.   Thereafter,   a   series   of   e-mails   were   exchanged   between <\/p>\n
the parties, but making it apparent that no final consensus was reached.\n<\/p>\n
                                      – 18 –\n<\/p>\n
It   would,   therefore,   appear   that  the   MOU   was   duly   extended  till   it  was <\/p>\n
terminated as averred by the petitioner.\n<\/p>\n
21.    The   petitioner   has   categorically   pleaded   that   the   MOU   was <\/p>\n
terminated on 25th September, 2009. The petitioner has placed on record <\/p>\n
the e-mail dated 25th  September, 2009 in which it is clearly stated that <\/p>\n
MOU was entered into           on 25th September, 2007 for a test period of <\/p>\n
six months from the date of arrival of the trial cars. It is further stated <\/p>\n
that this period was extended on an informal and voluntary basis by the <\/p>\n
petitioner for a period extending to two years from the date of signing of <\/p>\n
the   MOU.   During   this   two   years   period,   a   total   of   15   REVA   cars   have <\/p>\n
been   sold.   It   is   pointed   out   that   inspite   of   the   best   efforts   of   the <\/p>\n
respondent   and   the   efforts  of  the   petitioner   to   support   the   respondent, <\/p>\n
following   a   review   of   the   European   operations   it   is   believed   that   the <\/p>\n
respondents do not have in place the resources to build the REVA brand, <\/p>\n
invest  in  the   appropriate   infrastructure,   obtain  necessary   fiscal   and\/or <\/p>\n
subsidy and infrastructure support and are not adequately  prepared to <\/p>\n
launch       the   M1   vehicles   introduced   by   REVA   at   the   Frankfurt   IAA.\n<\/p>\n
                                      – 19 –\n<\/p>\n
Thereafter it requests the respondents to immediately cease all sales and <\/p>\n
marking   activities   on   behalf   of   REVA   brand.   This   termination   of   the <\/p>\n
agreement   has   been   acknowledged   by   the   respondents   in   its   e-mail <\/p>\n
dated   7th  October,   2009.         A   perusal   of   this   e-mail   would   also <\/p>\n
demonstrate that the disputes had clearly arisen between the parties at <\/p>\n
that   time.   The   e-mail   makes   a   grievance   that   the   respondents   had   not <\/p>\n
been   notified   of   the   termination   of  its  dealership   activities   a   few   weeks <\/p>\n
ago when it had informed the petitioner of its negotiations with potential <\/p>\n
Dutch partners. The respondents also repeated its disappointment that <\/p>\n
the win-win soft-landing solution it proposed  on 25th  September,   2009 <\/p>\n
was   rejected   by   the   petitioner.   Rest  of   the   correspondence   between  the <\/p>\n
parties   continues   in   the   same   tenor.   Clearly,   therefore,   the   MOU   has <\/p>\n
been   extended   till   its   termination   on   25th  September,   2009.   It   is   also <\/p>\n
evident   that   the   parties   had   failed   to   reach   any   fresh   agreement   with <\/p>\n
regard   to   sale   of   REVA   cars   in   Europe   by   the   respondents.   In   my <\/p>\n
opinion, the pleadings and the material on record has clearly established <\/p>\n
that there was a valid arbitration agreement incorporated in Clause 11 of <\/p>\n
the MOU.\n<\/p>\n
                                     – 20 –\n<\/p>\n
22.    This   takes   me   to   the   second   submission   of   Ms.Ahamadi   that,   in <\/p>\n
any event, the disputes cannot be referred to arbitration as it pertained <\/p>\n
to   a   period   subsequent   to   the   term   of   the   MOU.   Mr.Narasimha   has, <\/p>\n
however,   pointed   out   that   according   to   the   case   pleaded   by   the <\/p>\n
respondents   in   the   Brussels   Court   which   is   evident   from   the   writ   of <\/p>\n
summons,   all   the   disputes   pertained   to   the   period   prior   to   the <\/p>\n
termination   of   the   agreement   by   the   petitioner.   The   writ   of   summons <\/p>\n
clearly mentions as follows :\n<\/p>\n
       “Whereas   the   first   cars   of   the   make   REVA   were   marketed   in <\/p>\n
       India   from   June   2001   onwards,   then   in   the   UK   in   2003   and <\/p>\n
       worldwide from 2007.\n<\/p><\/blockquote>\n
\n
       That   the   party   summoned   below   had   however   promised   the <\/p>\n
       arrival   of   more   performing   Lithium   batteries   that   would   be <\/p>\n
       installed in their vehicles from the middle of 2008, as well as a <\/p>\n
       new or more competitive and more attractive car model by the <\/p>\n
       end of 2008, the REVA `NXR’.\n<\/p><\/blockquote>\n
\n
       Whereas   the   contractual   relationships   between   the   petitioner <\/p>\n
       and the party summoned below started in 2007.<\/p>\n
       Whereas   the   distribution   of   the   REVA   cars   by   the   petitioner <\/p>\n
       took place in two stage.\n<\/p><\/blockquote>\n
\n<\/blockquote>\n
                                     – 21 –\n<\/p><\/blockquote>\n
\n       That during an initial period the petitioner ran a pilot project <\/p>\n
       for   the   party   summoned   below   to   assess   the   marketing <\/p>\n
       possibilities of the REVA on the Belgian market.<\/p>\n
       That   after   a   certain   period   of   time   the   petitioner   became   an <\/p>\n
       exclusive distributor of REVA cars for the BENULEX.”<\/p>\n<\/blockquote>\n
23.    The   writ   of   summons   further   mentions   that   the   petitioner   had   to <\/p>\n
run   a   pilot   project   of   three   to   six   months   to   test   the   marketing <\/p>\n
possibilities   of   the   REVA   cars   on   the   Belgium   market.   It   is   further <\/p>\n
pleaded   that   at   the   end   of   the   test   period   and   at   the   latest   on   31st <\/p>\n
December, 2007, the parties had to decide jointly whether the petitioner <\/p>\n
would continue to provide the promotion, sales and service of REVA Cars <\/p>\n
in   Belgium   within   the   framework   of   a   long-term   distribution   contract.\n<\/p>\n
The respondents further pleaded     that :-\n<\/p>\n
       “Whereas,   in   spite   of   the   absence   of   the   signing   of   a   written <\/p>\n
       contract   between   the   parties,   the   petitioner   de   facto   became <\/p>\n
       the   exclusive   distributor   of   REVA   vehicles   in   the   BENELUX <\/p>\n
       starting the month of January, 2008.”\n<\/p>\n
24.    Thereafter the respondents gave details of the efforts made by it for <\/p>\n
marketing of the REVA Cars from January, 2008 onwards. In paragraph <\/p>\n
19 of the writ of summons, it is clearly admitted as follows :-\n<\/p>\n
                                       – 22 –\n<\/p><\/blockquote>\n
\n       “Whereas on the 25th  of September, 2009, as soon as the first <\/p>\n
       REVA cars fitted with Lithium batteries and of the new REVA <\/p>\n
       NXR   model   arrive   in   Belgium   the   petitioner   is   going   to   be <\/p>\n
       ejected all of a sudden by the party summoned below. <\/p>\n
       That   during   a   telephone   conversation   on   25th  September, <\/p>\n
       2009,   confirmed   in   an   email   of   the   same   date   the   party <\/p>\n
       summoned   below   suddenly   announced   its   decision   to <\/p>\n
       terminate   the   concession   granted   to   the   petitioner   for   the <\/p>\n
       Belelux, with immediate effect;\n<\/p><\/blockquote>\n
\n
       That   the   party   summoned   below   asked   the   petitioner   to <\/p>\n
       immediately stop the sale and promotion of the REVA cars as <\/p>\n
       well as the use of the REVA mark.”\n<\/p><\/blockquote>\n
\n<\/blockquote>\n
25.    The   claims   made   by   the   respondents   clearly   pertained   to   the <\/p>\n
contract   which   was   terminated   on  25th  September,   2009.   In  paragraph <\/p>\n
30 of the writ of summons, it is pleaded as under :-\n<\/p>\n
       “That the parties summoned below terminated the contract in <\/p>\n
       any untimely and brutal manner on 25th September, 2009.”\n<\/p>\n
26.    On   the   aforesaid   basis,   the   respondents   claim   compensation   and <\/p>\n
damages amounting to Euro 454,000.\n<\/p>\n
27.    The aforesaid  averments  and the  material   on record  would clearly <\/p>\n
demonstrate   that   the   disputes   that   have   arisen   between   the   parties <\/p>\n
                                    – 23 –\n<\/p>\n
clearly relate to the MOU dated 25th September, 2007. It would be for the <\/p>\n
Arbitral   Tribunal   to   decide   as   to   whether   claims   made   are   within   the <\/p>\n
arbitration   clause.   The   Arbitral   Tribunal   would   also   have   to   decide   the <\/p>\n
merits of the claim put forward by the respective parties. In view of the <\/p>\n
material   placed   on   record,   it   would   not   be   possible   to   accept   the <\/p>\n
submissions of Ms. Ahamadi that the disputes were beyond the purview <\/p>\n
of the arbitration clause.\n<\/p>\n
28.    A similar matter was examined by this Court in the case of Bharat  <\/p>\n
Petroleum Corporation Ltd. Vs.  Great Eastern Shipping Co. Ltd.8  In <\/p>\n
the aforesaid  case,  an  agreement called  time charter  party was entered <\/p>\n
into   between   the   appellant   and   the   respondent   on   6th  May,   1997   for <\/p>\n
letting   on   hire   vessels   for   a   period   of   two   years   from     22nd  September, <\/p>\n
1996 to 30th  June, 1997 and from 1st  July, 1997 to 30th  June, 1998. It <\/p>\n
appears that certain  disputes arose  between the  parties. Thereafter, on <\/p>\n
the   basis   of   the   correspondence   exchanged   between   the   parties   with <\/p>\n
regard  to the disputes,  claims  and counter  claims were filed  before  the <\/p>\n
8 (2008 (1) SCC 503).\n<\/p>\n
                                      – 24 –\n<\/p>\n
Arbitral  Tribunal.  Issues  were duly  framed of which  the  following  three <\/p>\n
issues may be of some relevance in the present context viz.\n<\/p>\n
       “Issue   1.–Whether   the   Hon’ble   Arbitral   Tribunal   has   no <\/p>\n
       jurisdiction   to   adjudicate   upon   the   dispute   between   the <\/p>\n
       claimant and the respondent for the period September 1998 to <\/p>\n
       August 1999 in respect of the vessel Jag Praja for the reasons <\/p>\n
       stated in Para 1 of the written statement?<\/p>\n
       Issue   2.–Whether   there   is   any   common   practice   that   if   the <\/p>\n
       vessel is not redelivered at the end of the period mentioned in <\/p>\n
       the time  charter  the vessel  would  be governed  by the  charter <\/p>\n
       party under which originally it was chartered?<\/p>\n<\/blockquote>\n
       *     *     *<\/p>\n
       Issue 5.–Whether the time charter party dated 6-5-1997 came <\/p>\n
       to an end by efflux of time on 30-8-1998? ”\n<\/p><\/blockquote>\n
\n<\/blockquote>\n
29.    The Arbitral Tribunal by its order dated 12th May, 2003 came to the <\/p>\n
conclusion   that   the   appellant   having   invoked   the   arbitration   clause <\/p>\n
contained   in   the   charter   party   agreement   dated   6th  May,   1997,   which <\/p>\n
was   valid   upto   31st  December,   1998   and   as   the   dispute   between   the <\/p>\n
parties related to the period subsequent to 31st  August, 1998, they had <\/p>\n
no jurisdiction to decide the reference. The tribunal held that the charter <\/p>\n
party   agreement   dated   6th  May,   1997   was   superseded   by   a   fresh <\/p>\n
agreement.   Therefore,   original   charter   party   dated   6th  May,   1997   got <\/p>\n
                                    – 25 –\n<\/p>\n
extinguished.   The   respondents   challenged   the   said   award   before   the <\/p>\n
High Court. Learned Single Judge set aside the award and held that the <\/p>\n
Arbitral Tribunal has the jurisdiction to adjudicate the disputes between <\/p>\n
the parties as the vessel continued to be hired by the appellant for the <\/p>\n
period   subsequent     to   31st  August,   1998   on   the   same   terms   and <\/p>\n
conditions, as were contained in charter party agreement  dated 6th May, <\/p>\n
1997.   It   was   held   that   the   charter   party   dated   6th  May,   1997   did   not <\/p>\n
come to an end by efflux of time and it was extended by the party on the <\/p>\n
same terms and conditions. Correctness of this order was challenged in <\/p>\n
this   Court.   On   examination   of   the   entire   fact   situation,   it   was   held   as <\/p>\n
follows :-\n<\/p>\n
      “19.  It is, no doubt, true that the general rule is that an offer <\/p>\n
      is not accepted by mere silence on the part of the offeree, yet it <\/p>\n
      does not mean that an acceptance always has to be given in so <\/p>\n
      many   words.   Under   certain   circumstances,   offeree’s   silence, <\/p>\n
      coupled   with   his  conduct,   which   takes   the   form   of   a  positive <\/p>\n
      act, may constitute an acceptance–an agreement sub silentio. <\/p>\n
      Therefore, the terms of a contract between the parties can be <\/p>\n
      proved not only by their words but also by their conduct.”<\/p>\n<\/blockquote>\n
                                      – 26 –<\/p>\n
30.    Examining   the   fact   situation   in   the   present   case,   I   am   of   the <\/p>\n
opinion   that   the   conclusion   is   inescapable   that   notwithstanding   the <\/p>\n
initial period under the MOU expiring by 31st December, 2007, the same <\/p>\n
was extended by the petitioner in exercise of its discretion under Clause <\/p>\n
(2)   of   the   MOU.   The   extended   MOU   was   terminated   only     on   25th <\/p>\n
September, 2009. Therefore, it is not possible to accept the submission <\/p>\n
of Ms. Ahamadi that the disputes arising between the parties cannot be <\/p>\n
referred   to   the   Arbitral   Tribunal.     In   my   opinion,   Mr.   Narasimha   has <\/p>\n
rightly   submitted   that   the   disputes   have   arisen   in   relation   to   the <\/p>\n
termination   of   the   MOU   and  the   consequences   thereof.     Such  disputes <\/p>\n
would   be   clearly   covered   under   the   Arbitration   clause   which   provides <\/p>\n
that in the event of any dispute or difference arising at any time between <\/p>\n
the   parties  in   relation   to   the   agreement  shall   be   referred   to   a   Sole <\/p>\n
Arbitrator.  The clause is clearly not limited to the disputes relating only <\/p>\n
to the initial period of the MOU  till 31st December, 2007.\n<\/p>\n
31.    I   also   find   merit   in   the   submission   of   Mr.   Narasimha   that <\/p>\n
irrespective   of   whether   the   MOU   is   now   in   existence   or   not,   the <\/p>\n
                                    – 27 –\n<\/p>\n
arbitration clause would survive.   The observations made by this Court <\/p>\n
in   the   case   of  Everest   Holding   Ltd.  (supra)   would   clearly   support   the <\/p>\n
submission made by the learned senior counsel.   In the aforesaid case, <\/p>\n
the parties had entered into a Joint Venture Agreement (for short `JVA’) <\/p>\n
dated   25th  September,   2003   for   the   purpose   of   mining,   processing   and <\/p>\n
export   of   Iron   Ore.     On   26th  March,   2004,   another   JVA   was   executed <\/p>\n
between   the   parties,   particularly   to   iron   out   certain   controversy   in <\/p>\n
respect of JVA dated 25th September, 2003.  Article 14.3 of the said JVA <\/p>\n
contained   an   arbitration   clause   providing   that   if   the   parties   failed   to <\/p>\n
resolve   the   matter   through   mutual   agreement,   the   dispute   shall   be <\/p>\n
referred   to   an   Arbitrator   appointed   by   mutual   agreement   of   the   two <\/p>\n
parties.     The   stand   of   the   petitioner   in   the   aforesaid   case   was   that   on <\/p>\n
20th  September,   2004,   it   was   shocked   and   surprised   to   receive <\/p>\n
unwarranted   notices   for   cancellation   of  JVA.    The   aforesaid   notice   was <\/p>\n
replied   on   6th  October,   2004.     Since   the   disputes   between   the   parties <\/p>\n
were   not   resolved,   the   petitioner   invoked   the   arbitration   clause.\n<\/p>\n
Respondent No. 1 in reply to the notice refuted the claim of the petitioner <\/p>\n
and also refused to refer the matter to arbitration on the ground that the <\/p>\n
                                      – 28 –\n<\/p>\n
JVA between the petitioner and the respondent No.1 is not in existence <\/p>\n
as the same had been terminated by respondent No.2.  It was stated that <\/p>\n
in view of the aforesaid position, there could be no invocation of Clause <\/p>\n
14.3 of JVA.\n<\/p>\n
32.    Considering   the   aforesaid   fact   situation,   this   Court   observed   that <\/p>\n
under   Clause   14.2,   the   parties   had   agreed   that   they   would   use   all <\/p>\n
reasonable   efforts   to   resolve   the   disputes,   controversy   or   claim   arising <\/p>\n
out of or relating to these agreements.   Since the parties have failed to <\/p>\n
resolve   their   differences,   the   same   had   to   be   referred   to   Arbitration <\/p>\n
under   Clause   14.3.     It   was   held   that   there   is   a   valid   Arbitration <\/p>\n
Agreement   between   the   parties   as   contained   in   the   JVA,   which   the <\/p>\n
parties are required to adhere to and are bound by the same.   In other <\/p>\n
words,   if   there   is   any   dispute   between   the   parties   to   the   agreement <\/p>\n
arising   out   of   or   in   relation   to   the   subject   matter   of   the   said   JVA,   all <\/p>\n
such disputes and differences have to be adjudicated upon and decided <\/p>\n
through   the   process   of   Arbitration   by   appointing   a   mutually   agreed <\/p>\n
Arbitrator.  This Court observed as follows:-\n<\/p>\n
                                        – 29 –\n<\/p><\/blockquote>\n
\n       “Though the JVA may have been terminated and cancelled as <\/p>\n
       stated   but   it   was   a   valid   JVA   containing   a   valid   arbitration <\/p>\n
       agreement   for   settlement   of   disputes   arising   out   of   or   in <\/p>\n
       relation to the subject-matter of the JVA. The argument of the <\/p>\n
       respondent   that   the   disputes   cannot   be   referred   to   the <\/p>\n
       arbitration as the agreement is not in existence as of today is <\/p>\n
       therefore devoid of merit.”<\/p><\/blockquote>\n
       In my opinion, the aforesaid observations are squarely applicable to <\/p>\n
the facts in the present case.  The disputes that have arisen between the <\/p>\n
parties clearly pertain to the subject matter of the MOU.\n<\/p>\n
33.    Even if, I accept the submission of Ms.Ahamadi that MOU was not <\/p>\n
extended beyond 31st of December, 2007, it would make little difference.\n<\/p>\n
Section   16(1)(a)   of   the   Arbitration   and   Conciliation   Act,   1996   provides <\/p>\n
that   an   arbitration   clause   which   forms   part   of   the   contract   shall   be <\/p>\n
treated as an agreement independent of the other terms of the contract.\n<\/p>\n
The plain meaning of the aforesaid clause would tend to show that even <\/p>\n
on the termination of the agreement\/contract, the arbitration agreement <\/p>\n
would  still  survive.   It  also seems  to be  the  view  taken  by  this  Court  in <\/p>\n
Everest   Holdings   Ltd.   (supra).              Accepting   the   submission   of <\/p>\n
                                      – 30 –\n<\/p>\n
Ms.Ahamadi   that   the   arbitration   clause   came   to   an   end   as   the   MOU <\/p>\n
came to an end by efflux of time on 31st December, 2007 would lead to a <\/p>\n
very   uncertain   state   of   affairs,   destroying   the   very   efficacy   of   Section <\/p>\n
16(1). The aforesaid section provides as under :\n<\/p>\n
       “16.   Competence   of   arbitral   tribunal   to   rule   on   its <\/p>\n
       jurisdiction   –  (1)   The   arbitral   tribunal   may   rule   on   its   own <\/p>\n
       jurisdiction, including ruling on any objections with respect to <\/p>\n
       the existence or validity  of the  arbitration  agreement,  and for <\/p>\n
       that purpose –\n<\/p><\/blockquote>\n
\n<\/blockquote>\n
       (a)   an arbitration clause which forms part of a contract shall <\/p>\n
       be treated as an agreement independent of the other terms of <\/p>\n
       the contract; and<\/p>\n<\/blockquote>\n
       (b) a decision by the arbitral tribunal that the contract is null <\/p>\n
       and   void   shall   not   entail  ipso   jure  the   invalidity   of   the <\/p>\n
       arbitration clause.”\n<\/p><\/blockquote>\n
\n<\/blockquote>\n
34.    The aforesaid provision has been enacted by the legislature keeping <\/p>\n
in   mind   the   provisions   contained   in   Article   16   of   the   UNCITRAL  Model <\/p>\n
Law. The aforesaid Article reads as under :-\n<\/p>\n
       “Article   16   –   Competence   of   arbitral   tribunal   to   rule   on   its <\/p>\n
       jurisdiction –\n<\/p><\/blockquote>\n
\n
       (1)   The   arbitral   tribunal   may   rule   on   its   own   jurisdiction, <\/p>\n
       including   any   objections   with   respect   to   the   existence   or <\/p>\n
       validity   of   the   arbitration   agreement.   For   that   purpose,   an <\/p>\n
       arbitration   clause   which   forms   part   of   a   contract   shall   be <\/p>\n<\/blockquote>\n
                                     – 31 –\n<\/p><\/blockquote>\n
\n      treated as an agreement independent of the other terms of the <\/p>\n
      contract. A decision by the arbitral tribunal that the contract <\/p>\n
      is null and void shall not entail  ipso jure  the invalidity  of the <\/p>\n
      arbitration clause.\n<\/p><\/blockquote>\n
\n
      (2)……………………………………………………..<\/p>\n
      (3)………………………………………………………”    <\/p><\/blockquote>\n
      Under   Section   16(1),   the   legislature   makes   it   clear   that   while <\/p>\n
considering any objection with respect to the existence or validity of the <\/p>\n
arbitration   agreement,   the   arbitration   clause   which   formed   part   of   the <\/p>\n
contract,   has   to   be   treated   as   an   agreement   independent   of   the   other <\/p>\n
terms   of   the   contract.   To   ensure   that   there   is   no   misunderstanding, <\/p>\n
Section   16(1)(b)   further   provides   that   even   if   the   arbitral   tribunal <\/p>\n
concludes   that  the  contract  is  null  and  void,   it   should   not  result,   as  a <\/p>\n
matter   of   law,   in   an   automatic   invalidation   of   the   arbitration   clause.\n<\/p>\n
Section 16(1)(a) presumes the existence of a valid arbitration clause and <\/p>\n
mandates   the   same   to   be   treated   as   an   agreement   independent   of   the <\/p>\n
other terms of the contract. By virtue of Section 16(1)(b), it continues to <\/p>\n
be  enforceable  notwithstanding   a  declaration   of the  contract  being   null <\/p>\n
and   void.   In   view   of   the   provisions   contained   in   Section   16(1)   of   the <\/p>\n
                                     – 32 –\n<\/p>\n
Arbitration and Conciliation Act, 1996, it would not be possible to accept <\/p>\n
the submission of Ms.Ahmadi that with the termination of the MOU on <\/p>\n
31st December, 2007, the arbitration clause would also cease to exist. As <\/p>\n
noticed earlier, the disputes that have arisen between the parties clearly <\/p>\n
relate to the subject matter of the relationship between the parties which <\/p>\n
came   into   existence   through   the   MOU.   Clearly,   therefore,   the   disputes <\/p>\n
raised   by   the   petitioner   needs   to   be   referred   to   arbitration.   Under   the <\/p>\n
arbitration clause, a reference was to be made that the disputes were to <\/p>\n
be referred to a single arbitrator. Since the parties have failed to appoint <\/p>\n
an arbitrator under the agreed procedure, it is necessary for this Court <\/p>\n
to appoint the Arbitrator.\n<\/p>\n
35.    In   exercise   of   my   powers   under   Section   11(4)   and   (6)   of   the <\/p>\n
Arbitration   and   Conciliation   Act,   1996   read   with   Paragraph   2   of   the <\/p>\n
Appointment of Arbitrator by the Chief Justice of India Scheme, 1996, I <\/p>\n
hereby   appoint   Hon.Mr.Justice   R.V.   Raveendran,   R\/o   8\/2,   Krishna <\/p>\n
Road,   Basavangudi,   Bangalore,   Former   Judge   of  the   Supreme   Court   of <\/p>\n
India, as the Sole Arbitrator to adjudicate the disputes that have arisen <\/p>\n
                                     – 33 –\n<\/p>\n
between the parties,  on such terms  and conditions as the  learned   Sole <\/p>\n
Arbitrator   deems   fit   and   proper.   Undoubtedly,   the   learned   Sole <\/p>\n
Arbitrator   shall   decide   all   the   disputes   arising   between   the   parties <\/p>\n
without   being   influenced   by   any   prima   facie   opinion   expressed   in   this <\/p>\n
order, with regard to the respective claims of the parties.\n<\/p>\n
36.    The   registry   is   directed   to   communicate   this   order   to   the   Sole <\/p>\n
Arbitrator   to   enable   him   to   enter   upon   the   reference   and   decide   the <\/p>\n
matter as expeditiously as possible.\n<\/p>\n
37.    The Arbitration Petition is accordingly disposed of.\n<\/p>\n
                                              ………………………….J.\n<\/p>\n
                                              [Surinder Singh Nijjar] <\/p>\n
New Delhi;\n<\/p>\n
November 25, 2011.\n<\/p>\n
                                    – 34 –\n<\/p>\n
     – 35 –<\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India M\/S Reva Electric Car Co.P.Ltd vs M\/S Green Mobil on 25 November, 2011 Bench: Surinder Singh Nijjar REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL ORIGINAL JURISDICTION ARBITRATION PETITION NO.18 OF 2010 M\/s. Reva Electric Car Co. P. Ltd. …Petitioner VERSUS M\/s. Green Mobil …Respondent O R D E R SURINDER […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-181573","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nM\/S Reva Electric Car Co.P.Ltd vs M\/S Green Mobil on 25 November, 2011 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/ms-reva-electric-car-co-p-ltd-vs-ms-green-mobil-on-25-november-2011\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"M\/S Reva Electric Car Co.P.Ltd vs M\/S Green Mobil on 25 November, 2011 - 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