Application Under Section 11 Of The Arbitration And Conciliation Act Not To Be Dismissed On Technical Grounds: Calcutta HC
The Calcutta High Court has recently held that application under Section 11 of the Arbitration and Conciliation Act, 1996 ought not to be dismissed on technical and/or procedural grounds. The court further observed that the requirement under the rules of procedure to file original arbitration agreement or certified copy thereof may be waived by the Court where the arbitration agreement is admitted. The court thus allowed the application under Section 11 and an Arbitrator was appointed.
Background:
In the present case, appointment of arbitrator was challenged by the respondents on various grounds notably inter alia that the original agreement or the certified copy was not produced and is not in accordance with clause 3 of the scheme of appointment of arbitrators framed by the then Chief Justice of the High court at Calcutta and notified on 21st January 1997, the respondent further contended MoU containing the Arbitration clause is neither registered nor sufficiently stamped, further that the MoU results in transferring or assigning the tenancy rights and is barred under Sec 5 (6) of the West Bengal Premises Tenancy Act, 1997.
Sec 11(2) of the Specific Relief Act, 1963 debars performance of contract which are in excess of powers given to the trustees and the MoU purports to transfer the business, management and property rights of the trust and as such the prior permission of the competent civil court is required.
While allowing the application of the petitioners, Justice Sabyasachi Bhattacharyya observed;
“In such view of the matter, there is no scope of refusal to refer the matter to arbitration, since admittedly there is the existence of an arbitral clause in the MOU-in-question entered into between the parties. The execution of the same and/or the physical existence thereof have not been challenged. The limited challenge to the validity of the same does not touch the realm of ex facie bar but, at the most, raise arguable questions required to be decided on merits, on interpretation of the documents and the law by the adjudicating authority.”
Mr. Piyush Chaturvedi, an advocate at the Calcutta High Court and a member of the Bar Association, was appointed as the sole Arbitrator to resolve the dispute between the parties, subject to obtaining his consent/declaration under Section 12 of the Arbitration and Conciliation Act, 1996. The court further clarified that that all questions regarding the validity and legality of the arbitration clause as well as 21 the MOU itself containing the said clause, would be left open along with all other issues raised by the parties to be decided on merits by the Arbitrator. 92.
Case Title: Chandan Chatterjee and others VS. Gita Sundararaman and others [AP NO.186 OF 2023]
Counsel for Petitioner: The litigation team was led by Mr. Ankur Singhi, Joint Managing Partner and assisted by Ms. Riti Basu, Principal Associate, Mr. Sumon Roy, Senior Associate and Mr. Sayan Banerjee, Associate, and Mr Jishnu Chowdhary and Mr. Aritra Basu appeared for the Petitioner(S.K. Singhi & Partners)
Counsel for Respondent: Mr. Anubhav Sinha, Adv.,