2015 (12) TMI 913 - SC - Indian Laws

Arbitrator Appointed to Resolve Disputes Arising from Helicopter Sale Agreement

The court allowed the petition under Section 11(6) of the Arbitration Act, appointing an arbitrator to resolve disputes arising from a Memorandum of ... Appointment of an arbitrator - Held that:- There is no manner of doubt that the said MOU dated 17th July, 2013 was executed by and between the petitioner on one hand and respondent No.1 represented by respondent No.2 as its power of attorney holder on the other. Clearly and evidently, sale and purchase of the Helicopter and delivery thereof in terms of the aforesaid MOU dated 17th July, 2013 has not materialized till date. Whether the petitioner is entitled to performance of the terms of the said MOU dated 17th July, 2013 is the precise dispute between the parties. Therefore, in terms of the arbitration clause contained in the said MOU dated 17th July, 2013, the dispute is liable to be referred to arbitration by appointment of an arbitrator under Section 11(6) of the Arbitration Act. The grounds on which the respondent No.1 seeks to resist the appointment of an arbitrator, namely, that the period contemplated under the MOU dated 4th July, 2013 (one month) within which payment was to be made to the respondent No.1 by the respondent No.2 is over; that clause 12 and clause 19 of the MOU dated 4th July, 2013 had been materially altered by changing the period of payment from one month to three months; and further that the power of attorney was forged by the respondent No.2 are questions that cannot be gone into by the court in exercise of jurisdiction under Section 11(6) of the Arbitration Act. These are matters which can be raised before the learned Arbitrator and answered by the said authority. Thus the court allows the present petition and appoints Shri Justice Mukul Mudgal, Chief Justice (Retd.), Punjab & Haryana High Court, as the Arbitrator. All the disputes including the disputes raised in the present petition are hereby referred to the learned sole Arbitrator. The learned Arbitrator shall be at liberty to fix his own fees/ remuneration/other conditions in consultation with the parties. Issues involved:1. Application under Section 11(6) of the Arbitration and Conciliation Act, 1996 for appointment of an arbitrator.2. Disputes arising from an Agreement/Memorandum of Understanding dated 17.07.2013 regarding the sale of a Helicopter Robinson R44 Raven II.3. Failure to handover possession of the Helicopter within the agreed period leading to arbitration proceedings.4. Respondent No.2's non-appearance and contentions regarding the termination of the MOU dated 4th July, 2013, and denial of involvement in the MOU dated 17th July, 2013.5. Interpretation of the arbitration clause (clause 24) of the MOU dated 17th July, 2013.6. Appointment of an arbitrator under Section 11(6) of the Arbitration Act to resolve the disputes.Analysis:The petitioner filed an application under Section 11(6) of the Arbitration Act seeking the appointment of an arbitrator to address disputes arising from an Agreement/Memorandum of Understanding dated 17.07.2013 regarding the sale of a Helicopter Robinson R44 Raven II. The petitioner alleged that the respondents failed to deliver the Helicopter within the agreed period, leading to the initiation of arbitration proceedings. Respondent No.2 did not appear, while respondent No.1 contended that the MOU dated 4th July, 2013, had been terminated due to non-payment by respondent No.2 and denied being a party to the MOU dated 17th July, 2013, alleging forgery of the power of attorney. The court noted the arbitration clause in the MOU dated 17th July, 2013, and ruled that the disputes should be referred to arbitration as per Section 11(6) of the Arbitration Act.The court emphasized that the appointment of an arbitrator was necessary to determine whether the petitioner was entitled to the performance of the terms of the MOU dated 17th July, 2013. The court highlighted that the issues raised by respondent No.1, such as the alleged alteration of clauses in the MOU dated 4th July, 2013, and forgery of the power of attorney, were matters to be addressed by the arbitrator as per the provisions of the Arbitration Act. The court cited Section 16 of the Arbitration Act, emphasizing the competence of the arbitral tribunal to rule on its jurisdiction, including objections related to the existence or validity of the arbitration agreement. Consequently, the court appointed Shri Justice Mukul Mudgal as the arbitrator and referred all disputes to be resolved through arbitration proceedings.In conclusion, the court allowed the petition, appointed an arbitrator, and referred all disputes, including those raised in the petition, to the arbitrator for resolution. The court directed the arbitrator to commence and conclude the arbitration proceedings expeditiously, granting the arbitrator the flexibility to determine fees and conditions in consultation with the parties. The Arbitration Petition was disposed of without costs.