Case Note & Summary
The case involves a dispute between Balasore Alloys Limited (petitioner/applicant) and Medima LLC (respondent) arising from a business transaction for the supply of High Carbon Ferro Chrome. The parties entered into an initial agreement dated 19.06.2017 for 2000 MT, followed by 37 purchase orders, and a subsequent agreement dated 31.03.2018 referred to as the 'Umbrella Agreement' by the respondent and 'Pricing Agreement' by the applicant. Disputes arose, and the applicant filed a petition under Section 11(6) read with Section 11(12)(a) of the Arbitration and Conciliation Act, 1996, seeking appointment of a sole arbitrator based on Clause 7 of the purchase orders. The respondent contended that the entire transaction was governed by the umbrella agreement, which contained Clause 23 providing for ICC arbitration in London under UK law, and that they had already invoked that clause. The Supreme Court examined both arbitration clauses and applied the principle from Olympus Superstructures Pvt. Ltd. vs. Meena Vijay Khetan & Ors., which held that where there are two related agreements with arbitration clauses, the general clause in the main agreement governs disputes covering both agreements, while the specific clause applies only to disputes confined to the subsidiary agreement. The Court noted that the disputes here covered both agreements, and the respondent had already initiated ICC arbitration. Therefore, the Court dismissed the Section 11 petition, holding that the arbitration under Clause 23 of the umbrella agreement was the appropriate forum.
Headnote
A) Arbitration Law - Appointment of Arbitrator - Section 11(6) read with Section 11(12)(a) of the Arbitration and Conciliation Act, 1996 - Harmonisation of Multiple Arbitration Clauses - Dispute arose between parties over which arbitration clause applies when there are two related agreements with different arbitration clauses - The Supreme Court, following Olympus Superstructures Pvt. Ltd. vs. Meena Vijay Khetan & Ors., held that where disputes cover both agreements, the general arbitration clause in the main/umbrella agreement governs, and the specific clause in the subsidiary agreement applies only when disputes are confined to that agreement - The Court dismissed the petition under Section 11 as the respondent had already invoked ICC arbitration under Clause 23 of the umbrella agreement (Paras 6-9).
Issue of Consideration
Which arbitration clause governs the disputes between the parties when there are two agreements with different arbitration clauses: the purchase orders (Clause 7) or the umbrella/pricing agreement (Clause 23)?
Final Decision
The Supreme Court dismissed the Arbitration Petition (Civil) No. 15/2020 and the connected SLP, holding that the disputes are governed by Clause 23 of the umbrella agreement, and the respondent had already invoked ICC arbitration. The petition under Section 11 was not maintainable.
Law Points
- Arbitration clause interpretation
- Harmonisation of multiple arbitration clauses
- Section 11 of Arbitration and Conciliation Act
- 1996
- Umbrella agreement vs. purchase orders
- Olympus Superstructures Pvt. Ltd. vs. Meena Vijay Khetan & Ors.
