TaxTMI 
TaxTMI 
2001 (2) TMI 971
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....ot be held to be an interim award and as such section 34 cannot be invoked. 3. The appellant and respondent No. 1 entered into a technical collaboration agreement called "Insoluble Sulphur Technical Collaboration Agreement" on 1-8-1989. Under the agreement, respondent No. 1 was required to provide technical information for production of insoluble sulphur in India. The appellant discharged its obligation under the agreement. The said respondent No. 1 in May, 1996, wrote a letter to the Indian Council of Arbitration, making a claim against the appellant on the basis of certain disputes between the parties. But the Indian Council of Arbitration returned the papers to respondent No. 1 on 15-5-1996. On the very same day, the said respondent No. 1 filed a statement of claim before respondent No. 2, which was registered as Arbitration Case No. FTA/137. Said respondent No. 2, by its letter dated 25-6-1996 called upon the appellant to appoint an arbitrator. On 9-7-1996, the appellant wrote to the respondent No. 2 bringing to its attention clause 8.4 of the agreement and stated that the appellant has not received any demand for arbitration from OCCL and as such the respondent No. 2 has no j....
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....an application before a learned Single Judge of Delhi High Court, assailing the decision of the Joint Arbitration Committee dated 15-7-1998 on various grounds under section 34. The learned Single Judge by his judgment dated 7-4-2000, dismissed the said applica-tion of the appellant on a finding that the impugned decision of the Joint Arbitration Committee dated 15-7-1998 is not an award and as such is not amenable to appeal under section 34. Against the said judgment of the learned Single Judge, the appellant preferred an appeal and the Division Bench having dismissed the appeal by its judgment dated 8-8-2000, the present appeal has been preferred to this Court. 4. Mr. Ashok H. Desai, the learned senior counsel, appearing for the appellant contended that on a plain reading of clause 8.4 of the Technical Collaboration Agreement, would indicate that there is no agreed venue where the arbitral proceedings could be conducted and on the other hand, the procedure in the arbitral proceedings would be governed by the decision of the venue inasmuch as if it is to be held in India, then it shall be conducted in accordance with the rules applicable in India and if it is to be conducted in Ja....
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....ng for the respon-dents on the other hand submitted that though the expression 'award' has been defined to include an interim award under section 2(c ), but a decision to become an award must be a final determination of a particular issue or claim in the arbitration. The decision on the question of venue by a forum under the agreement termed as Joint Arbitration Committee, is at an earlier stage of initiation of the proceedings of the arbitral Tribunal and, therefore, the same cannot be termed as an interim award. The High Court, therefore, was justified in not entertaining an appeal against the same under section 34. With regard to the different clauses of the agreement, Mr. Dave contends that the parties themselves agreed that the place of arbitration shall be determined by the Joint Arbitration Committee and such determination shall be binding and final, whereas the arbitration clause stipulates that any claim or dispute arising out of or relating to the agreement shall be settled by arbitration. The very fact that the parties agreed that the question of venue will be determined by a Joint Arbitration Committee in the event parties do not designate the place of arbitration or ar....
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....d as such the impugned judgment of the learned Single Judge as well as the Division Bench remain unassailable. 6. Before we examine the rival submissions made, it would be appropriate for us to notice the relevant clauses of the agreement, which ultimately would help us to decide the question as to whether the decision of the Joint Arbitration Committee dated 15-7-1998 can be held to be an interim award. Clause 8.4 is in fact the most crucial clause that requires consideration, which is quoted herein-below in extenso : "Clause 8.4 - Any dispute or claim arising out of or relating to this Agreement shall be settled by arbitration. If the arbitration is to be held in India, the dispute shall be submitted to the Arbitration Tribunal of the Federation of Indian Chambers of Commerce and Industry and shall be conducted in accordance with the Rules of that Tribunal. If the arbitration is to be held in Japan, it shall be conducted in accordance with the Rules of the Japan Commercial Arbitration Association. In the event that the parties have not designated the place of arbitration or are unable to agree thereon within thirty (30) days after the demand for arbitration has been made, the ....
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.... place of arbitration. (2) Failing any agreement referred to in sub-section (1), the place of arbitration shall be determined by the arbitral Tribunal having regard to the circumstances of the case, including the convenience of the parties. (3) Notwithstanding sub-section (1) or sub-section (2), the arbitral Tribunal may, unless otherwise agreed by the parties, meet at any place it considers appropriate for consultation among its members, for hearing witnesses, experts or the parties, or for inspection of documents, goods or other property." On a construction of clause 8.4 of the agreement, it is apparent that the parties themselves have maintained a distinction between submission of dispute to the arbitration Tribunal and decision as to the place of arbitration to be determined by a Joint Arbitration Committee of three members. In the first part of the clause, parties have agreed for referring any dispute or claim arising out of, or relating to the agreement to be settled by arbitration of an arbitral Tribunal. The second part of the agreement relates to a decision as to the venue of arbitration which in the event of lack of agreement between the parties, is required to be dete....
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....odi v. K.N. Modi [1998] 3 SCC 573, this Court considered the question as to whether clause (9) of the memorandum of understanding would constitute an arbitration agreement. The Court answered the question in the negative after considering as to what would be the attributes to be present for an agreement to be considered as an arbitration agreement. Paragraph (17) of the aforesaid judgment is quoted herein-below in extenso : "17. Among the attributes which must be present for an agreement to be considered as an arbitration agreement are : (1) The arbitration agreement must contemplate that the decision of the Tribunal will be binding on the parties to the agreement, (2) that the jurisdiction of the Tribunal to decide the rights of parties must derive either from the consent of the parties or from an order of the court or from a statute, the terms of which make it clear that the process is to be an arbitration, (3) the agreement must contemplate that substantive rights of parties will be determined by the agreed Tribunal, (4) that the Tribunal will determine the rights of the parties in an impartial and judicial manner with the tribunal owing an equal obligation of fairness towa....
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....reement conceived of two arbitral proceedings, one in relation to any dispute for the venue and the other in relation to the dispute arising out of the agreement. 7. It would be appropriate for us to notice at this stage that respondent No. 2 had intimated the Manager, Arbitration Department, Japan Commercial Arbitration Association that the parties had not been able to agree on the place of arbitration within 30 days of the notice, calling upon them to submit the agreement and, therefore, the said Japan Commercial Arbitration Association could nominate a Member to the Joint Arbitration Committee and pursuant to the said communication from respondent No. 2, the Japan Commercial Arbitration Association, appointed respondent No. 5 as its Member in the Joint Arbitration Committee by letter dated 25-10-1996. The aforesaid conduct of the Japan Commercial Arbitration Association and the unanimous decision of the Joint Arbitration Committee about the venue, is also quite a significant in the context of the dispute. 8. Besides, bearing in mind the object behind the Arbitration and Conciliation Act, as has been indicated by this Court in the case of Konkan Railway Corpn. Ltd. v. Mehul Con....