Case Note & Summary
The applicant, M/s Navkar Corporation Limited, entered into a land licence agreement with the respondent, Divisional Railway Manager, Central Railway, on 31st March 2011, granting a licence over railway land for developing a railway siding. The agreement contained an arbitration clause (Clause 17) providing for settlement of disputes by arbitration, with certain 'excepted matters' excluded. Disputes arose between the parties, and the applicant invoked the arbitration clause by a letter dated 28th February 2012, proposing names of arbitrators. The respondent did not respond, leading the applicant to file an application under Section 11(6) of the Arbitration and Conciliation Act, 1996, seeking appointment of an arbitrator. The respondent opposed the application, arguing that the agreement had been terminated and that the dispute involved 'excepted matters' not arbitrable. The court examined the arbitration clause and found that the dispute did not fall within the excepted matters. It held that the arbitration clause is independent and survives termination of the contract. The court appointed a sole arbitrator, a retired judge of the Bombay High Court, to adjudicate the disputes between the parties. The court directed the arbitrator to decide the issue of arbitrability of the claims, including whether any claim falls within the excepted matters. The application was allowed, and the arbitrator was appointed with directions to file a disclosure under Section 11(8) read with Section 12 of the Act.
Headnote
A) Arbitration Law - Appointment of Arbitrator - Section 11(6) of Arbitration and Conciliation Act, 1996 - Survival of Arbitration Clause - The applicant sought appointment of an arbitrator after the respondent terminated the land licence agreement. The court held that the arbitration clause is independent and survives termination of the contract. The dispute regarding termination and claims under the agreement are arbitrable, except for 'excepted matters' specifically excluded. The court appointed a retired judge as sole arbitrator. (Paras 1-15) B) Arbitration Law - Excepted Matters - Exclusion from Arbitration - The arbitration clause in the agreement excluded certain 'excepted matters' from arbitration. The court noted that the dispute in question did not fall within the excepted matters and thus was referable to arbitration. (Paras 2-10)
Issue of Consideration
Whether the arbitration clause in the land licence agreement survives the termination of the agreement and whether the court should appoint an arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996.
Final Decision
The court allowed the application and appointed a sole arbitrator, a retired judge of the Bombay High Court, to adjudicate the disputes between the parties. The arbitrator was directed to file a disclosure under Section 11(8) read with Section 12 of the Arbitration and Conciliation Act, 1996.
Law Points
- Arbitration clause survives termination of contract
- Section 11(6) of Arbitration and Conciliation Act
- 1996
- Excepted matters excluded from arbitration
- Appointment of arbitrator by court when party fails to act
