9911796707
TMI Blog2007 (5) TMI 560X X X X Extracts X X X X X X X X Extracts X X X X ..... fines at FOB price of US$ 50 per dry MT, subject to the terms and conditions of the said agreement. Clause 17 of the said agreement providing for settlement of disputes by arbitration is extracted below : "17. Arbitration: Any dispute arising out of or in this connection with this contract or the execution thereof shall, to the extent possible, be settled amicably by negotiation and mutual agreement between the Seller and the Buyer. If no settlement can be reached in this way, the matter in dispute shall then be referred to and finally resolved by arbitration in Hong Kong in accordance with the provisions of the Arbitration and Conciliation Act, 1996 or any other statutory modification, enac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led to accept in time; that the port was subsequently closed due to monsoon and therefore it was no longer feasible to continue the contract on FOB terms; and that at a meeting held at Shanghai on 25.4.2005, the representatives of parties had agreed to cancel the contract dated 28.2.2005 which was on FOB terms and decided to enter into new negotiations for a fresh contract on CFR terms. As a result, the agreement dated 28.2.2005 including the arbitration agreement which is apart of it, is no longer in force and therefore, the petition for appointment of an Arbitrator in terms of the clause 17 of the agreement was not maintainable. (b) Part I of the Act applies only where the place of arbitration is in India. As place of arbitration is Hon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lates to resolution disputes, and not performance. Even if the performance of the contract comes to an end on account of repudiation, frustration or breach of contract, the arbitration agreement would survive for the purpose of resolution of disputes arising under or in connection with the contract. [Vide : Heymen vs. Darwins Ltd - 1942 (1) All ER 337, Union of India vs. Kishori Lal Gupta & Bros. - AIR 1959 SC 1362 and The Naihati Jute Mills Ltd. vs. Khyaliram Jagannath - AIR 1968 SC 522]. This position is now statutorily recognized. Sub-section (1) of section 16 of the Act makes it clear that while considering any objection with respect to the existence or validity of the arbitration agreement, an arbitration clause which forms part of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bitrations which take place outside India. The use of the language is significant and important. The legislature is emphasizing that the provisions of Part I would apply to arbitrations which take place in India, but not providing that the provisions of Part I will not apply to arbitrations which take place out of India. The wording of sub-section (2) of Section 2 suggests that the intention of the legislature was to make provisions of Part I compulsorily applicable to an arbitration, including an international commercial arbitration, which takes place in India. Parties cannot, by agreement, override or exclude the non-derogable provisions of Part I in such arbitrations. By omitting to provide that Part I will not apply to international com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ispute shall be referred to arbitration at Hong Kong; (ii) the matter in dispute shall be finally resolved by arbitration at Hong Kong; and The respondent wants to ignore the words "in accordance with the provisions of Arbitration and Conciliation Act, 1976 or any other statutory modification, enactment or amendment thereof for the time being in force" in clause 17 as a meaningless addition. The use of the words 'referred to and finally resolved by arbitration in Hong Kong', according to respondent, shows an intention that the arbitration has to take place in Hong Kong in accordance with Hong Kong Laws. 9. The rules of interpretation require the clause to be read in the ordinary and natural sense, exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for being appointed as Arbitrator. He also submitted that the respondent was not willing for any of the persons suggested by the petitioner being appointed as Arbitrator. He stated that an independent arbitrator may be appointed as the sole Arbitrator, keeping in view sub-section (9) of section 11 which provides that in the case of appointment of a sole arbitrator in an international commercial arbitration, the Chief Justice of India or his designate may appoint an arbitrator of a nationality other than the nationality of the parties if the parties belong to different nationalities. 12. For the reasons stated above, this petition is allowed. Let this matter be listed on 24.5.2007 for appointment of the Arbitrator. The parties may also, if ..... X X X X Extracts X X X X X X X X Extracts X X X X
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