SHASHIN CHEMICALS INDUSTRY Vs. ORIENTAL CARBONS AND CHEMICALS LIMITED
LAWS(SC)-2001-2-190
SUPREME COURT OF INDIA (FROM: DELHI)
Decided on February 16,2001

SANSHIN CHEMICALS INDUSTRY Appellant
VERSUS
ORIENTAL CARBONS AND CHEMICALS LIMITED Respondents

JUDGEMENT

Pattanaik, J. - (1.) Leave granted.
(2.) This appeal by grant of special leave is directed against the judgment of Delhi High Court dated 8th August, 2000. The question for consideration is whether a decision regarding the venue of the arbitration proceedings could be assailed in appeal under Section 34 of the Arbitration and Conciliation Act, 1996. The Division Bench of the High Court by the impugned judgment agreed with the conclusion of the learned single Judge and came to hold on examining the arbitration clause in the agreement that the decision with regard to the venue of the arbitration sitting cannot be held to be an interim award and as such Section 34 of the Act cannot be invoked.
(3.) The appellant and respondent No. 1 entered into a technical collaboration agreement called "Insoluble Sulphur Technical Collaboration Agreement" on 1st of August, 1989. Under the agreement, respondent No. 1 was required to provide technical information for production of insoluble sulphur in India. 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 respondnt No. 2, its letter dated 25th of June, 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 jurisdiction in the matter. Respondent No. 2 however by its Order dated 17th of July, 1996, called upon the appellant to submit the agreement regarding the venue of arbitration with reasons within 30 days. Appellant immediately answered the aforesaid letter of the respondent No. 2 by letter datd 22-7-1996, questioning the jurisdiction of the respondent No. 2 and also seeking clarification as to whether FICCI had accepted the statement of claim of respondent No. 1. At this point of time, the appellant was assured that respondent No. 2 will not proceed with the matter till the issues regarding the venue are sorted out. On 9-8-1996, respondent No. 1's lawyer intimated respondent No. 2 that they had already appointed an arbitrator and it was for the arbitral tribunal to decide the venue under Section 20 of the Arbitration and Conciliation Act, 1996. Respondent No. 2 was called upon to nominate the appellant's arbitrator. Appellant by his letter dated 9th of August, 1996, intimated the respondent No. 2 that the requirement of Article 8.4 not having been complied with, there is no question of nominating arbitrator on behalf of the appellant. Appellant also wrote a letter to the respondent No. 1 on 6th of September, 1996, indicating therein that the Registrar of FICCI had no jurisdiction and that there had been no proper demand for arbitration. It was also stated that in any event, Japan was the designated place of arbitration. On 16th October, 1996, respondent No. 2 sent a communication to the Manager, Arbitration Department, Japan Commercial Arbitration Association, stating therein that since 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, the JCAA may nominate a member on the Joint Arbtration Committee. In that letter it had been stated that respondent No. 2 had already nominated one Umesh Kumar Khaitan as its Member on the Joint Arbitration Committee. Pursuant to the aforesaid letter from respondent No. 2, the JCAA appointed respondent No. 5 as its Member by letter dated 25th of October, 1996. Appellant had made some correspondence and queries regarding the proceedings of the Joint Arbitration Committee. Mr. Umesh Khaitan resigned as Member of JAC on 12th of January, 1998 and he was, therefore, substituted by respondent No. 3. The aforesaid JAC met in Delhi on 15th of July, 1998 and decided the venue for the sittings of the arbitral tribunal. The appellant filed an application before a learned single Judge of Delhi High Court, assailing the decision of the Joint Arbitration Committee dated 15th July, 1998 on various grounds under Section 34 of the Arbitration and Conciliation Act, 1996. The learned single Judge by his judgment dated 7th of April, 2000, dismissed the said application of the appellant on a finding that the impugned decision of the Joint Arbitration Committee dated 15th of July, 1998 is not an award and as such is not amenable to appeal under Section 34 of the Arbitration and Concilation Act 1996. 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 8th of August, 2000, the present appeal has been preferred to this Court.;


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