2007 (10) TMI 677 - SC - Indian Laws

Summary

Issues Involved:
1. Appointment of a sole arbitrator.
2. Alleged breaches of contract by respondents.
3. Validity of the arbitration clause and notice.
4. Responsibilities and obligations under the tripartite agreement.
5. Composition of the arbitral tribunal.

Detailed Analysis:

1. Appointment of a Sole Arbitrator:
The applicant-Citibank filed an application under Sections 11(5), 11(10), and 11(12) read with Section 10 of the Arbitration and Conciliation Act, 1996, seeking the appointment of a sole arbitrator for an international commercial arbitration. Citibank proposed Hon'ble Mr. Justice S. P. Bharucha as the sole arbitrator, while the respondents suggested a three-member arbitral tribunal, nominating Hon'ble Mr. Justice M. H. Kania as their arbitrator.

2. Alleged Breaches of Contract by Respondents:
Citibank alleged that the respondents, TLC and WIPL, failed to fulfill their obligations under the "Fly for Sure" program, resulting in numerous customer complaints. Citibank claimed that the respondents engaged in questionable practices, such as not honoring booking confirmations and pressuring customers to change travel dates or destinations. Despite repeated communications, the respondents failed to address these issues, leading Citibank to terminate the agreement and seek arbitration.

3. Validity of the Arbitration Clause and Notice:
Respondent No. 1-TLC contended that the arbitration notice was invalid under Section 21 of the Act, as it did not specify the disputes or claims. However, the court found that the arbitration clause (Clause 10) was broad enough to cover all disputes arising out of the agreement. The court held that the arbitration agreement was not vague or uncertain and that the disputes were arbitrable.

4. Responsibilities and Obligations under the Tripartite Agreement:
The agreement, effective from 01.10.2005 to 31.08.2006, outlined the responsibilities of the respondents to provide services to Citibank's customers. The respondents were jointly and severally liable for ensuring the fulfillment of the "Fly for Sure" program. Citibank alleged that the respondents failed to meet these obligations, leading to customer dissatisfaction and reputational damage.

5. Composition of the Arbitral Tribunal:
The court considered the suggestion of a three-member arbitral tribunal but found it unnecessary and burdensome. The court emphasized that the arbitration clause did not require an even number of arbitrators and that a sole arbitrator would be more efficient and cost-effective.

Conclusion:
The court appointed Hon'ble Mrs. Justice Sujata V. Manohar, retired Judge of the Supreme Court, as the sole arbitrator to resolve the disputes between Citibank and the respondents. The application was disposed of without any order as to costs.