IN THE GAUHATI HIGH COURT (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH) Review Petition No.116/2015 In Arb. Pet. No.17/2013 (D/O). 1. The Gauhati Municipal Corporation Panbazar, Guwahati, Assam Represented by its Commissioner. 2. The Commissioner, Gauhati Municipal Corporation, Panbazar, Guwahati. Petitioners. VERSUS M/s Nyimi Enterprise A Government approved Registered bearing No. TL/2352/lta. Dated 01.05.2000, Having its corporate office at Nyokum Lapang, Itanagar, Papumpare Dist., Arunachal Pradesh and a Branch Office at Santi Path, House No. & Bhetapara Guwahati 781028 Represented by its Proprietor Smti Champa Taring Respondent. BEFORE THE HON BLE MR JUSTICE HRISHIKESH ROY For the petitioner : Mr. A.M. Buzarbaruah. Sr. Advocate. Mr. P.S. Deka, Ms. M. Barman. Advocates. For the respondent : Mr. K.N. Choudhury. Sr. Advocate. Mr. R. Dhar Advocate. Date of hearing and Order : 1.10.2015. ORDER (ORAL) Heard Mr. A.M. Buzarbaruah, the learned Senior Counsel appearing for the Review petitioner. The respondent is represented by Mr. K.N. Choudhury, the learned Senior Counsel. 2. While exercising jurisdiction under Section 11(6) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the Arbitration Act ) in the Arbitration Petition No.17/2013, an Arbitrator was appointed to adjudicate the Review Pet. No.116/2015 in Arb. P. No.17/2013 (D/O) Page 1 of 6
2 dispute, arising out of Contract Agreement dated 26.2.2009 (Annexure-2). Under Clause 1.0 (b) of this Agreement, the general instructions to the tenderers were made part of the contract documents and thus the General Conditions of Contract (GCC) of the Guwahati Municipal Corporation (GMC) were governing the parties to the contract. The Clause 9.1.1.0 of the GCC provided for references of the disputes to be settled by arbitration and this clause was cited by the Court when it ordered for appointment of Arbitrator on the petition filed under Section 11(6) of the Arbitration Act. 3. However Mr. A.M. Buzarbaruah, the learned Senior Counsel refers to Article 4.1 of the Contract Agreement to argue that the dispute amongst the parties can be resolved only through suits to be filed in a Court of competent jurisdiction at Guwahati and he argues that appointment of Arbitrator is excluded under this particular Clause of the Agreement. But since specific attention of the Court was not drawn to Article 4.1, Mr. Buzarbaruah contends that order for appointment of Arbitrator should be reviewed, on account of the exclusion Clause. 4. Since the submission of the Review petitioner would require consideration of few conditions of Contract, the relevant Clauses are extracted hereinbelow for ready reference :- 1.0 The following documents shall constitute the contract documents, namely (a) (b) Tender documents as defined in the General Instructions to tenderes. (c) (d) (e) (f) 4.1 Notwithstanding any other Court or Courts having jurisdiction to decide the questions(s) forming the subject matter of the reference if the same had been the subject matter of a suit, any and all actions and proceedings arising out of or relative to the contract (including any arbitration in terms thereof) shall lie only in the Court of competent civil jurisdiction in this behalf at Guwahati (where this contract has been signed on behalf of the Owner) and only the said Court(s) shall have jurisdiction to entertain and try any such actions(s) and/or proceeding(s) to the exclusion of all other Courts. Page 2 of 6
3 9.1.1.0 - Dispute with organization other than Public Sector Undertaking : All disputes or differences whatsoever arising between the parties out of or relating to construction, meaning and operation or effect of this contract or the breach shall be settled by arbitration in accordance with the Rules of Arbitration of the Indian Council of Arbitration and the award made in pursuance thereof shall be binding of the parties. 5. The Review petitioner submits that Clause 4.1 was incorporated to exclude resolution of disputes through Arbitration and therefore the decision of this Review petition will primarily depend on the understanding of Clause 4.1 of the Agreement. Moreover since a question of maintainability of the Review petition is also raised by the respondent at whose instance the Arbitrator was appointed, that aspect would also require consideration of the Court. 6. Mr. A.M. Buzarbaruah, the learned Senior Counsel submits that all the relevant Clauses of the Contract Agreement must be taken into consideration to decide whether the parties are covered by an Arbitration Agreement and according to the Review petitioner, the Article 4.1 of the Contract rules out arbitration as a mode of resolution of dispute between the contractor and the GMC. However this argument is repudiated by Mr. K.N. Choudhury, the learned Senior Counsel, who submits that Clause 9.1.1.0 of the GCC specifically provided for resolution of dispute through Arbitration and therefore the respondent contends that the order passed by this Court on 3.12.2014 was the proper order. 7. When appointment of Arbitrator is sought under Section 11(6) of the Arbitration Act, the Court is required to first consider whether there is an arbitration agreement and whether the petitioner who has approached the forum is a party to such agreement. There is no dispute in the bar that the parties are covered by the agreement dated 26.2.2009 but the arbitration clause for the contract in question was incorporated in the GCC which must be construed as part of the contract document, as is envisaged under Sub-Section (2) of Section 7 of the Arbitration Act. Page 3 of 6
4 8. The question to be answered now is whether Clause 4.1 of the agreement keeps out the present dispute from the purview of an arbitration proceeding as has been canvassed by the Review petitioner. The focus of Clause 4.1 is on the location of the forum, whereby the Court at Guwahati is mentioned as the Court of competent jurisdiction in respect of suits and other proceedings arising out of the contract. In my understanding, this Clause doesn t override the Clause 9.1.1.0 of the GCC, which provides for arbitration. There is nothing in Clause 4.1 to suggest that it excludes resolution of disputes through arbitration and on the other hand, the use of word shall in Clause 9.1.10 of the GCC makes it abundantly clear that disputes arising out of the contract, are to be resolved through arbitration. 9. In view of the above conclusion, I am of the considered opinion that although there is no reference to Clause 4.1 in the Court s order when the arbitrator was nominated, the result of the petition under Section 11(6) of the Arbitration Act will be no different if Clause 4.1 too is taken into account. Thus this Review petition is found devoid of merit. However since the issue of maintainability of such petition relating to orders passed under Section 11(6) have been argued with some seriousness by both sides, this Court feels obliged to give its decision on the maintainability of such Review petitions. 10. The power exercised by the Chief Justice (or his delegatee) under Section 11(6) of the Arbitration Act is a judicial power and in SBP & Co. vs. Patel Engineering Ltd. reported in (2005) 8 SCC 618, it was held by the Apex Court that such order of the Chief Justice is final and only avenue open to an aggrieved party is to approach the Supreme Court under Article 136 of the Constitution of India. 11. The Supreme Court in Grindlays Bank Ltd. vs. Central Government Industrial Tribunal reported in 1980 (Supp) SCC 420 highlighted the two distinct contexts in which Review power is to be exercised by the Courts in India. In so far as procedural review is concerned, it was held that it is inherent and implied in a Court which is competent to set aside apparently erroneous order passed Page 4 of 6
5 under a misapprehension of law. However when the Review petition intends to correct an error which hinges on the merit of the decision, the Supreme Court opined that a specific review power must be conferred by law, to Review a decision on merit. 12. When the Chief Justice (or his delegate) exercises power Section 11(6) of the Arbitration Act, that power is conferred on the Chief Justice (or his delegate) and not on the Court and clear distinction is made on the general power exercised by the High Court which is distinct from the statutory power exercised by the Chief Justice (or his delegate) of the High Court, when it exercises jurisdiction under Section 11(6) of the Arbitration Act. 13. Thus while Review power is available to a High Court as a Court of record as contemplated by the Article 215 of the Constitution of India, such plenary is not available to correct errors in judicial orders passed under Section 11(6) of the Arbitration Act. When a decision is given by the High Court as a Court of record it does have the power to correct an apparent error of its own order but such power can t be exercised to correct a judicial order passed by the Chief Justice (or his delegate), when it exercises statutory jurisdiction under Section 11(6) of the Arbitration Act. 14. The Review petitioner relied on Jain Studios Ltd. vs. Shin Satellite Public Co. Ltd. reported in (2006) 5 SCC 501 to argue that when the function performed by the Judge is considered to be judicial, the Review of such order under Section 11(6) of the Arbitration Act can be made by the Chief Justice of India or his nominee. But this decision in Jain Studios Ltd. (Supra) was given in the context of the specific power of Review conferred on the Supreme Court under Article 137 of the Constitution of India and that is how, the learned Judge opined that an order passed under Section 11(6) is reviewable. But unfortunately no such power of Review is specifically conferred on the High Court and therefore I am of the considered opinion that the ratio of Jain Studios Ltd. (Supra) can t help the Review petitioner in the present case. Page 5 of 6
6 15. Because of the above reasoning, I hold that when an Arbitrator is appointed through exercise of powers under Section 11(6) of the Arbitration Act, the merit of such decision can t be reviewed and if any litigant is aggrieved with such verdict, the only option for that party is to seek remedy under Article 136 of the Constitution of India. However it must also be made clear that when review is sought in the context of a procedural error, the same can be corrected even in the absence of express review power in respect of jurisdiction under Section 11(6) of the Arbitration Act. 16. Following the above discussion, this case is found devoid of merit and the same is accordingly dismissed. The learned Arbitrator is accordingly requested to proceed with the matter in terms of the appointment order passed by this Court on 3.12.2014. JUDGE Datta. Page 6 of 6