Case Note & Summary
The petitioner, Indapur Dairy And Milk Products Limited, filed a petition under Section 11 of the Arbitration and Conciliation Act, 1996, seeking appointment of an arbitral tribunal to adjudicate disputes arising out of an agreement dated 13 March 2015 with the respondent, Global Energy Private Limited. The arbitration agreement was contained in Clause 13.1 of the agreement. The respondent appeared and filed a reply affidavit raising two principal objections: first, that the petitioner had earlier filed Special Civil Suit No.760 of 2018 before the Civil Judge, Jr. Division at Pune, against the respondent and Janata Sahakari Bank, and thus had waived its right to arbitration; second, that the agreement was not adequately stamped. The court examined the suit and found that it was filed against the respondent and a third party bank, seeking reliefs in respect of a bank guarantee and a bill dated 16 February 2018. The court held that the filing of a civil suit does not per se constitute waiver of the right to arbitration unless the suit seeks to enforce the same cause of action against the same parties. In this case, the suit involved a third party and different reliefs, and the disputes under the arbitration agreement were distinct. The court also noted that the stamp duty objection was vague and not pressed. Accordingly, 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 of the Arbitration and Conciliation Act, 1996 - Maintainability - Filing of a civil suit does not per se waive the right to arbitration unless the suit seeks to enforce the same cause of action against the same parties - In the present case, the suit was filed against the respondent and a third party bank, and the relief sought was different from the disputes covered by the arbitration agreement - Held that the petition under Section 11 is maintainable (Paras 1-5). B) Arbitration Law - Stamp Duty - Objection as to inadequately stamped agreement - The respondent's objection regarding stamp duty was vague and not pressed - Held that such objection cannot be entertained at the stage of appointment of arbitrator (Para 3).
Issue of Consideration
Whether the filing of a civil suit by the petitioner against the respondent and a third party constitutes a waiver of the right to invoke arbitration, and whether the petition under Section 11 of the Arbitration and Conciliation Act, 1996 is maintainable.
Final Decision
The petition is allowed. The court appoints a sole arbitrator to adjudicate the disputes between the parties. The respondent's objections are rejected.
Law Points
- Arbitration agreement
- waiver of arbitration rights
- maintainability of Section 11 petition
- pending civil suit
- cause of action
- stamp duty objection
