TaxTMI 
TaxTMI 
2003 (7) TMI 490
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.... dated 4-3-1998, to proceed with the Arbitration claims till the FCI and the opposite parties therein (hereinafter called, 'Millers') agree in writing afresh that the arbitration may be conducted under the Rules of Arbi tration of the Indian Council of Arbitration. Therefore, the Council and the concerned Millers are arrayed in the respective cases, as respondents before this Court. 3. The FCI, in the course of its functions and day to day trans action of its business, entered into agreements with the Millers for storage-cum-milling of FCI paddy stored in Millers premises into conventional raw/parboiled rice and delivering the rice as per the out-turn stipulated for different varieties of paddy and delivery of the same in return for the payments to be made on the rates agreed to between them. The relevant contracts, apart from containing the detailed terms and conditions for carrying out thereof, also contained an uniform and standardized arbitration clause, for settlement of claims and disputes arising out of such contracts through the Council. It appears, in some cases, that the Council asked the FCI to forward the name of the sole Arbi trator to the Council for proceeding wit....
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.... on file and consequently refund the deposit made by the FCI. Thereupon, the FCI approached the Delhi High Court invoking its jurisdiction by seeking adjudi cation on the following three questions :- "i. Whether under the existing arbitration clause the dispute between the parties is arbitrable in accordance with I.C.A. Rules. ii. Whether the Registrar, I.C.A. has any jurisdiction to direct the claimant to get fresh agreement signed. If so, what is the effect of failure to obtain such fresh agreement and in such case which will be the forum for adjudication of dispute between the parties. iii. Whether the Registrar, I.C.A., in asking for the new requirement under question Nos. I & II as above, is justified in his decision not to proceed with the case further, and also to ask the Petitioner F.C.I. to seek approval of Respondent Nos. 2 and 3 for appointment of a common Arbitrator upon the F.C.I. for obtaining consent from Respondent Nos. 2 and 3 afresh in this respect." 5. The stand of the FCI in respect of those questions seems to have been that, having regard to Rules 4(b), 5, 9, 10, 13, 14 to 19, 20 to 22 & 37 of the ICA Rules and a proper understanding of the same, th....
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....ned in the agreement between the parties and the provisions contained in the ICA Rules and that a proper and harmonious construction have to be made of the same keeping in view the firm determination of the contracting parties to have the disputes resolved and deter mined by means of arbitration through the medium of the ICA. The High Court, according to the appellants, ought to have properly reconciled the arbitration clause and the relevant ICA Rules to ensure the resolution of the dispute by arbitration rather than create an unjustified and unwarranted stalemate in the matter. Strong reliance is sought to be placed on the language of the arbitration clause in the contract and the provisions contained in Rules 16, 21 and 22 of the ICA Rules to justify the stand of the appellants. It is equally contended on behalf of the appel lants that when at no point of time the appellant asserted for any right in them to nominate the arbitrator themselves and instead had been all along requesting the ICA to nominate the arbitrator to facilitate arbitration in accordance with its procedure, the stand taken for the ICA to insist upon a fresh consent for proceeding in the matter further was whol....
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....arbitration clause and the same was not attributable to the ICA. The appointment of Arbitrator in the arbitration clause in the agreement between parties is said to be directly contrary to and in conflict with the procedure for appointment/nomination of the Arbitrator under the rules of ICA and, therefore, there are no merits in these appeals. 9. Shri Rajiv Datta, learned senior counsel appearing for some of the Millers-Private parties and the other learned counsel appear ing for similar such parties. Who adopted his contentions, for the Millers, strenuously contend at the time of hearing and in the written submission that no exception could be taken to the stand of the ICA in all these matters and that not only the appeals are not maintainable in view of the decisions of this Court noticed supra, but the arbitration clause in the agreement and the ICA Rules being directly in conflict, the ICA could not have nominat ed the arbitrator to proceed with the arbitration clause as sought for by the appellants. Contentions similar to those raised by the ICA are reiterated on behalf of the Millers too, besides contending that in the absence of any fresh agreement between parties, there ....
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....respect to the existence or validity of the arbitration agreement are matters which should be canvassed before the Arbitral Tribunal itself which has been specifically empowered to rule on such issues and on its own jurisdiction, as well. Unfortunately, the High Court in this case seems to have proceeded to adopt an adjudicatory role and returned a verdict recording reasons as to the very existence or otherwise of the agreement as well as the tenability and legality or otherwise of making a reference to an arbitrator. In view of such peculiar situation, it would be futile for the respondents to contend that the SLPs are not maintainable, particularly in view of the fact that any recourse to have the arbitrator appointed or nominated could be forestalled by the detailed judgment and the findings recorded by the High Court in this matter. In the light of the above, the details pointed out on behalf of the ICA regarding the submissions as to the provisions of law actually invoked before the High Court, the nature of the application or the character of the order passed pales into insignificance. The objections in this regard are consequently rejected. 12. So far as the questions rel....