SHEET AP677of 2016 IN THE HIGH COURT AT CALCUTTA Original Civil Jurisdiction MAHESH SUNNY ENTERPRISES PVT.LTD.VERSUS AIRPORT AUTHORITY OF INDIA BEFORE: The Hon'ble JUSTICE SOUMEN SEN Date : 4th October, 2016.
Appearance: Ms.Mr.Debdutta Sen, Adv.Mr.Siddhartha Chatterjee, Adv.Ms.Suchishmita Ghosh Chatterjee, Adv.Mr.Anup Kanti Poddar, Adv.Mr.Ayan Poddar, Adv.The Court: This is an application for appointment of an arbitrator.
There is no dispute either as to the existence of the arbitral agreement or that the disputes has arisen out of the said arbitral agreement under required to be decided and resolved through arbitration.
A preliminary objection has been raised with regard to the invocation of arbitration clause on the ground that the said application is premature inasmuch as the Disputes Resolution Committee is yet to decide the merits of the claim of the petitioner which is a condition precedent for invocation of the arbitration clause.
It is submitted that the petitioner would be required to deposit a sum of Rs.3,78,91,732/as on 31st July, 2016 and in absence of depositing the said amount the Dispute Resolution Committee (hereinafter referred to as ‘DRC’) is not obliged to consider the application contemplated under Clause 30 of the Licence Agreement.
Clause 30 of the Licence Agreement reads as follows: “30.
All disputes and differences arising out of or in any way touching or concerning this Agreement (except those the decision whereof is otherwise herein before expressly provided for or to which the Public Premises [Eviction of Unauthorised Occupants].Act and the rules framed thereunder which are now enforced or which may hereafter come into force are applicable).shall in the fiRs.instance, be referred to a Dispute Resolution Committee (DRC) set up at the airports, for which a written application should be obtained from the party and the points clearly spelt out.
In case the dispute is not resolved within 45 days of reference, then the case shall be referred to the sole arbitration of a person to be appointed by the Chairman/ Member of the Authority.
The award of the arbitrator so appointed shall be final and binding on the parties.
The Arbitration & Conciliation Act, 1996 shall be applicable.
Once the arbitration clause has been invoked, the DRC process will cease to be operative.
a) The case shall be referred to the Sole Arbitrator by the Chairman/Member of the Authority subject to the condition that the licensee shall have to deposit the disputed amount with AAI as condition precedent before making reference to the Arbitration for adjudication of dispute.
b) Similarly, before making a reference to Dispute Resolution Committee, the licensee will have to fiRs.deposit the disputed amount with AAI and give consent for acceptance of the recommendations of the Dispute Resolution Committee.
c) It will be no bar that the Arbitrator appointed as aforesaid is or has been an employee of the Authority and the appointment of the Arbitrator will not be challenged or be open to question in any Court of Law, on this account.
d) The licensee(s) shall undertake to pay the full amount of licence fee/dues regularly as per the award/agreement and perform all the covenants of the agreement even he/they have requested for appointment of Arbitrator and/or during the couRs.of arbitral proceedings or Dispute Resolution Proceedings.” The said arbitration clause contemplates that at the fiRs.instance a written application has to be filed with the DRC with the points clearly spelt out.
In case the dispute is not resolved within 45 days of reference, then the Chairman/Member of the Authority can appoint a sole arbitrator.
The reference shall be made subject to the condition that the licensee shall have to deposit the disputed amount with the Airport Authority of India (herein after referred to as ‘AAI’) as condition precedent before making reference to the arbitration for adjudication of dispute.
Similarly, before making a reference before the Dispute Resolution Committee, the licensee would have to fiRs.deposit the disputed amount with AAI and give consent of acceptance of the recommendations of the Disputes Resolution Committee.
It is not in dispute that initially when the petitioner approached the authorities for having the matter referred to arbitration, they have deposited a sum of Rs.2 crores.
Apart from the aforesaid, the respondent is holding about Rs.4.69 crores towards security deposit.
The contract is still subsisting.
It is not in dispute that on 29th June, 2016, the DRC was approached with an application as required under Section 30 of the Arbitration Clause.
The AAI refused to refer the dispute to DRC on the basis of an opinion obtained from the Law Department that the matter is subjudic before the Hon’ble Supreme Court and till the disposal of the said matter, there would be no requirement to have the matter decided by DRC.
The petitioner clarified time and again that by an order dated 29th June, 2016 the special leave petition was dismissed as withdrawn and accordingly, there could be no impediment for the DRC to decide the matter in accordance with the Clause 30 of the Licence Agreement.
The respondent, this time cited pendency of an application under Section 9 of the Arbitration and Conciliation Act, for refusing to refer the matter to DRC.
In the affidavit, for the fiRs.time, a plea has been raised that the condition precedent for consideration of the said application by the DRC has not been fulfilled, as the petitioner would be required to pay a sum of Rs.3,78,91,732/- towards outstanding amount.
It is trite law that the authority cannot in affidavit furnish grounds which is just not appearing from the order and/or communication made in this regard.
The authorities have never contented that the said application before the DRC is premature or does not fulfil the condition of Clause 30 in view of alleged short deposit of Rs.3,78,91,732/-.
The appointing authority has sat tight over the matter and in the process has allowed liability, if any, to accrue.
The appointing authority has failed to exercise its jurisdiction and the grounds for refusal to refer the dispute is unmeritorious and unacceptable.
Under such circumstances, this Court is of the view that the respondent has completely failed to discharge its obligation and has thereby forfeited their right to appoint an Arbitrator as more than 45 days has lapsed from the notice dated 29th June, 2016.
Even prior to the filing of the application the authority did not appoint an arbitrator.
Under such circumstances, Mr.Justice Aloke Chakraborti, (Retired) is appointed as a sole Arbitrator to adjudicate the disputes between the parties.
The commensurate remuneration shall be fixed by the learned Arbitrator at the fiRs.sitting of arbitration preferably on a consolidated basis rather than per sitting.
Learned Arbitrator is requested to conclude reference within a period of ten months from the date of lodging of statement of claim before him.
AP No.677 of 2016 stands disposed of without any order as to costs.
(SOUMEN SEN, J.) dg2