Case Note & Summary
The applicant, United Shippers Limited, filed an application under Section 11 of the Arbitration and Conciliation Act, 1996, seeking appointment of an arbitrator to resolve disputes arising out of two agreements dated 25th March 2003 and 27th February 2004 for transporting coal. The respondent, Tata Power Company Limited, contended that the first agreement was closed and no disputes subsisted, relying on a credit note issued by the applicant. The court examined the arbitration clauses in both agreements, which were identical and provided for arbitration by a retired Chief Justice of a High Court or a retired Supreme Court Judge. The court held that the arbitration clause survives the termination of the contract and that disputes regarding compensation are arbitrable. The court also noted that the existence of an arbitration agreement is a condition precedent for appointment of an arbitrator and must be examined prima facie. The court allowed the application and appointed a retired Judge of this Court as the sole arbitrator to adjudicate the disputes between the parties.
Headnote
A) Arbitration Law - Appointment of Arbitrator - Section 11 of the Arbitration and Conciliation Act, 1996 - Survival of Arbitration Clause - The court considered whether the arbitration clause in a transport agreement survived the termination of the contract and whether disputes regarding compensation were arbitrable. The court held that the arbitration clause is independent and survives termination, and disputes regarding compensation are arbitrable. (Paras 1-10) B) Arbitration Law - Existence of Arbitration Agreement - Prima Facie Examination - Section 11 of the Arbitration and Conciliation Act, 1996 - The court examined whether there was an arbitration agreement between the parties. The court held that the existence of an arbitration agreement is a condition precedent for appointment of an arbitrator, and the court must examine the same prima facie. (Paras 1-10)
Issue of Consideration
Whether the arbitration agreement survives the termination of the contract and whether disputes regarding compensation are arbitrable.
Final Decision
The court allowed the application and appointed a retired Judge of this Court as the sole arbitrator to adjudicate the disputes between the parties.
Law Points
- Arbitration clause survives termination of contract
- Disputes regarding compensation are arbitrable
- Section 11 of the Arbitration and Conciliation Act
- 1996
- Existence of arbitration agreement is a condition precedent
- Court to examine prima facie existence of arbitration agreement
