Case Note & Summary
The petitioner, Era International, a partnership firm engaged in importing coal, entered into three sale contracts with the respondent, Aditya Birla Global Trading India Private Limited (formerly Swiss Singapore India Pvt Ltd), in September 2022 for supply of US coal. The contracts contained an arbitration clause. The petitioner deposited earnest money. Clause 6 of the contracts required the respondent to provide a Load Port Report (LPR) for quality determination. The petitioner alleged that the respondent failed to provide contract-wise LPR, leading to a dispute. The petitioner invoked the arbitration clause and requested the respondent to appoint an arbitrator. The respondent did not appoint an arbitrator within 30 days. The petitioner then filed a petition under Section 14 read with Section 11 of the Arbitration and Conciliation Act, 1996, seeking appointment of an arbitrator. The court considered whether the petitioner was entitled to appointment under Section 11(6). The court noted that the arbitration clause existed and the respondent failed to appoint an arbitrator. The court held that the failure to provide LPR constituted a dispute. The court allowed the petition and appointed a sole arbitrator to adjudicate the disputes between the parties.
Headnote
A) Arbitration Law - Appointment of Arbitrator - Section 11(6) Arbitration and Conciliation Act, 1996 - Failure to Appoint - Petitioner sought appointment of arbitrator after respondent failed to appoint one despite arbitration clause - Court held that since respondent did not appoint arbitrator within 30 days of notice, petitioner entitled to approach court under Section 11(6) - Held that existence of dispute and arbitration clause sufficient for appointment (Paras 1-10).
B) Contract Law - Sale Contract - Quality Determination - Clause 6 - Load Port Report - Dispute arose from respondent's failure to provide contract-wise Load Port Report for coal quality determination - Court noted that this failure constituted a dispute within the meaning of the arbitration clause (Paras 2-5).
Issue of Consideration
Whether the petitioner is entitled to appointment of an arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996, given the failure of the respondent to appoint an arbitrator despite existence of an arbitration clause and a dispute arising from non-supply of Load Port Report.
Final Decision
The court allowed the petition and appointed a sole arbitrator to adjudicate the disputes between the parties.
Law Points
- Arbitration and Conciliation Act
- 1996
- Section 11(6)
- Section 14
- Appointment of Arbitrator
- Failure to appoint
- Existence of arbitration clause
- Dispute existence
- Load Port Report
- Quality determination
- Sale contract
Case Details
2024 LawText (BOM) (02) 154
Commercial Arbitration Petition (L) No. 27638 of 2023 with Commercial Arbitration Petition (L) No. 27643 of 2023
Mr. Rahul Totala with Mr. Manish Priyadarshi with Mr. Naman Maheshwari, Ms. Vidisha Rohira and Ms. Apeksha Agarwal i/b Ashwin Poojari, R.T. Legal for the petitioner. Mr. Rushabh Sheth with Mr. Sayeed Mulani and Ms. Akshata Kadam and Ms. Ria Goradia i/b Mulani & Co. for respondent no.1. Mr. Vikram Nankani, Sr. Advocate with Mr. Sumeer Nankani, Anuja, Ms. Neha Bhosale, Ms. Laveena Tejwania and Mr. Divadkar i/b NDB Law for respondent no.2.
Aditya Birla Global Trading India Private Limited (Previously known as Swiss Singapore India Pvt Ltd)
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Nature of Litigation
Commercial arbitration petition seeking appointment of arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996.
Remedy Sought
Petitioner sought appointment of a sole arbitrator to adjudicate disputes arising from three sale contracts for supply of US coal.
Filing Reason
Respondent failed to provide contract-wise Load Port Report as required under Clause 6 of the sale contracts, leading to a dispute. Petitioner invoked arbitration clause but respondent did not appoint arbitrator within 30 days.
Issues
Whether the petitioner is entitled to appointment of an arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996, given the failure of the respondent to appoint an arbitrator despite existence of an arbitration clause and a dispute arising from non-supply of Load Port Report.
Submissions/Arguments
Petitioner argued that respondent failed to provide contract-wise Load Port Report as required under Clause 6, constituting a dispute, and that respondent did not appoint arbitrator despite notice.
Respondent's arguments not detailed in the provided text.
Ratio Decidendi
Where an arbitration clause exists and a dispute arises, and the respondent fails to appoint an arbitrator within 30 days of notice, the petitioner is entitled to approach the court under Section 11(6) of the Arbitration and Conciliation Act, 1996 for appointment of an arbitrator.
Judgment Excerpts
The present petition is filed by the petitioner Era International (for short “Era”) a partnership firm engaged in the activity, of import of quality coal from global sellers and catering to a diverse clientele operating brick kilns and various industries within India.
The Petition filed under Section 14 read with Section 11 of the Arbitration and Conciliation Act, 1996, seek reliefs in the backdrop of three contracts entered in or about September 2022, with the respondent Aditya Birla Global Trading India Private Limited (for short “ABGTI”) in form of sale contracts for supply of distinct quantities of US coal.
Clause no.6 of the subject Contract provide for quality determination and stipulate that the quality of the coal shall be final, as per Load Port Report and according to Clause 14, the risk of loss or damage to the goods is transferred from seller to the buyer on execution of the contract and it contemplate that the title will pass to the buyers from the sellers, when the entire payment is made by the buyer and the delivery note is issued by the seller.
Procedural History
Petitioner filed Commercial Arbitration Petition (L) No. 27638 of 2023 and Commercial Arbitration Petition (L) No. 27643 of 2023 under Section 14 read with Section 11 of the Arbitration and Conciliation Act, 1996, seeking appointment of arbitrator. The court heard the matter and delivered judgment on 29 February 2024.
Acts & Sections
- Arbitration and Conciliation Act, 1996: Section 11, Section 14
