2019 (7) TMI 450 - SC - Indian Laws

Supreme Court Upholds Dismissal of Writ Petition, Orders Arbitration for Dispute Resolution

Nirmal Software Services Pvt. Ltd. Versus Dr. Babasaheb Ambedkar Marathwada University & Ors.

The Supreme Court upheld the High Court's decision to dismiss the Writ Petition and directed the parties to resolve their dispute through arbitration. Mr. ... Appointment of sole arbitrator - disputes arose between the parties with respect to certain communication issued by the Respondent – University, whereby the purchase order in favour of the Petitioner, executed in furtherance of the MoU, was kept in abeyance - HELD THAT:- On the joint request of the parties, we appoint Mr. Justice Pratap Hardas (Retd.) as the Sole Arbitrator, subject to the declarations being made under Section 12 of the Arbitration and Conciliation Act, 1996 with respect to independence and impartiality, and the ability to devote sufficient time to complete the arbitration within the period of 12 months. Matter disposed off. Issues:1. Interpretation of the arbitration clause in the Memorandum of Understanding (MoU)2. Validity of the High Court's decision to dismiss the Writ Petition3. Appointment of a Sole Arbitrator and procedural aspectsInterpretation of the arbitration clause in the MoU:The case involved a dispute between the Petitioner and the Respondent University regarding a communication that led to the purchase order being kept in abeyance. The MoU between the parties contained an arbitration clause stipulating that any disputes or claims shall first be discussed in good faith and then submitted to arbitration if not resolved. The High Court dismissed the Writ Petition, emphasizing the need to give effect to the arbitration clause. Subsequently, during the Supreme Court hearing, the Petitioner agreed to refer the issue to arbitration as per the MoU. Consequently, both parties jointly requested the appointment of a Sole Arbitrator, and Mr. Justice Pratap Hardas (Retd.) was appointed as the Sole Arbitrator with the seat/place of arbitration being Aurangabad.Validity of the High Court's decision to dismiss the Writ Petition:The High Court of Judicature at Bombay, Aurangabad bench had dismissed the Writ Petition filed by the Petitioner on the grounds that the MoU contained a clear arbitration clause that needed to be enforced. This decision was challenged by the Petitioner in the Supreme Court through a Special Leave Petition (SLP). During the proceedings, the Counsel for the Petitioner agreed to refer the issue to arbitration in accordance with the MoU, leading to the appointment of a Sole Arbitrator as per the joint request of the parties. The Supreme Court, therefore, upheld the validity of the High Court's decision in dismissing the Writ Petition and directed the parties to resolve their dispute through arbitration.Appointment of a Sole Arbitrator and procedural aspects:Upon the joint request of the parties, Mr. Justice Pratap Hardas (Retd.) was appointed as the Sole Arbitrator to resolve the disputes arising from the MoU. The appointment was subject to the necessary declarations under the Arbitration and Conciliation Act, 1996, ensuring independence, impartiality, and the ability to complete the arbitration within 12 months. The parties agreed to pay the Arbitrator's fees as per the Fourth Schedule to the Arbitration and Conciliation Act, 1996. The seat/place of arbitration was determined to be Aurangabad, and the matter was disposed of accordingly, with pending applications being also disposed of as a result of the appointment of the Sole Arbitrator.