Case Note & Summary
The dispute arose between two companies, Powertech World Wide Limited and Delvin International General Trading LLC, regarding a purchase contract dated December 1, 2006, which included an arbitration clause. The petitioner, Powertech, sought the appointment of an arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996, after the respondent failed to settle outstanding payments for goods supplied. The petitioner claimed that the respondent had initially made timely payments but later requested additional goods without settling previous dues. Following a series of notices exchanged between the parties, the petitioner invoked the arbitration clause, nominating a retired judge as the arbitrator. The respondent acknowledged the existence of the arbitration agreement but did not concur with the appointment of the nominated arbitrator. The court examined the arbitration clause and the surrounding correspondence to determine if a binding agreement existed. It concluded that the parties had a clear intention to resolve disputes through arbitration, thus satisfying the requirements for a valid arbitration agreement. The court appointed the nominated arbitrator and allowed the parties to file claims and counterclaims. No costs were awarded.
Headnote
A) Arbitration Law - Binding Nature of Arbitration Agreement - Existence of a valid arbitration agreement - Arbitration and Conciliation Act, 1996, Section 11(6) - The court found that the correspondence between the parties indicated a clear intention to refer disputes to arbitration, thus establishing a binding arbitration agreement. The ambiguity in the arbitration clause was resolved by the parties' subsequent communications, confirming their consensus to arbitrate. Held that the petitioner was entitled to invoke arbitration (Paras 9-15).
Issue of Consideration
Whether the arbitration agreement as contained in the Purchase Contract was a binding arbitration agreement enforceable under Section 11(6) of the Arbitration and Conciliation Act, 1996.
Final Decision
The court appointed Mr. Justice D.R. Dhanuka (Retired) Judge, Bombay High Court, as the Sole Arbitrator to adjudicate upon the disputes arising from the Purchase Contract. The parties were allowed to file claims and counterclaims before the appointed Arbitrator, which shall be decided in accordance with law. No orders as to costs.
Law Points
- Arbitration agreement
- appointment of arbitrator
- Section 11(6) Arbitration and Conciliation Act
- 1996
- binding nature of arbitration clause
- consensus ad idem
