Bela M. Trivedi, J. - (1.) THE present arbitration application has been filed seeking appointment of an arbitrator under the provisions contained in Section 11(6) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the said Act').
(2.) THE short facts necessary to decide the present application are that the applicant is a limited company incorporated under the Companies Act, and is the share holder of the respondent -company. The respondent had entered into an agreement with the applicant, namely, Power Delivery Agreement (PDA) as per Annexure -1. According to the terms of the said PDA, the respondent was obliged to supply certain fixed quantity of power to the applicant out of the power generated at the Power Plant, in proportion to the investment made by the applicant in the equity/preference share capital of the respondent. The said PDA also stipulated the extent of 'Minimum Guaranteed Power' (MGP) and the firm tariff at which the power would be supplied from the Power Plant to the applicant. The clause 15.3 of the said PDA contained the arbitration clause which reads as under: - "15.3 Arbitration Where any Dispute is not resolved as provided for in Clause 15.2, and then the following provisions shall apply: (a) The Dispute shall be submitted to arbitration at the request of either Party upon written notice to that effect to the other Party (a "Notice of Reference") in accordance with the provisions of the Arbitration & Conciliation Act, 1996. (b) The place of arbitration shall be Jaipur, India. (c) The Parties agree that the arbitration award shall be final and binding on both parties." It is the case of the applicant that the Government of Rajasthan vide the Government Order dated 22/5/2008 had sanctioned a mining lease in favour of the respondent for the mineral Lignite, near Village Gurha, Tehsil Kolayat, District Bikaner for an area of 1241.25 hectares, for a period of 30 years from the date of registration of the mining lease agreement. It was stated therein that the said allocation of Lignite block to the respondent was to meet the Lignite requirements for a 1 x 135 MW power project near Raneri in Rajasthan. The respondent, while seeking allocation of the mine, had submitted an affidavit to the effect that power generated from the proposed power plant will be delivered to the HT Level Investor Consumers within the State of Rajasthan. The copy of the mining lease agreement dated 25/8/2008 executed in favour of the respondent is on record at Annexure -4. It appears that the respondent thereafter wrote a letter dated 16/1/2015 (Annexure -5) informing the applicant that the State Government of Rajasthan has sought to impose a special condition in the mining lease granted to the respondent, pursuant to which the respondent would be obligated to enter into long time Power Purchase Agreement with the DISCOMS and that such agreement with DISCOMS would alter the arrangement between the applicant and the respondent. The respondent therefore had put the applicant on the notice of the occurrence of 'Force Majeure'. In response to the said letter, the applicant vide letter dated 28/1/2015 (Annex. 6) refuted the claim of the respondent with regard to the occurrence of 'Force Majeure'. The respondent thereafter vide the letter dated 29/1/2015 (Annexure -7) informed the applicant that it had entered into an agreement with Government of Rajasthan to supplement the mining lease dated 25/8/2008, as per the directions of the Government of India, and that the said agreement imposes an obligation on the respondent to enter into a long term power purchase agreement with DISCOMS to continue mining under the mining lease deed, and that there was a restriction on the mining for the supply of power to persons other than DISCOMS. According to the applicant, the respondent instead of providing the documents as sought for, wrote a letter dated 28/2/2015 (Annexure -8) informing the applicant that the respondent was prohibited from supplying power to the applicant effective from 1st March, 2015 and accordingly the respondent would not be in a position to supply power from 1/3/2015 onwards. The applicant therefore vide the letter dated 8/3/2015 (Annexure -9) confronting the respondent to its claim not to supply power on the alleged event of 'Force Majeure', requested the respondent to restore the supply of power forthwith and also called upon the respondent to treat the said letter as the notice for arbitration. In response to the said letter of the applicant, the respondent vide the letter dated 9/3/2015 (Annexure -10) stated that no arbitral dispute had arisen between the parties, and therefore there was no question of invoking the arbitration clause. The applicant therefore filed the present application seeking appointment of the arbitrator under Section 11(6) of the said Act on 13/5/2015.
(3.) THE application has been resisted by the respondent by filing the reply contending inter alia that the application under Section 11(6) of the said Act was not maintainable. It has been further contended that the respondent was generating the power by using Gurha Lignite block allotted to the respondent as per the mining lease agreement entered into by the respondent with the State Government of Rajasthan, and that the group captive consumers including the applicant were aware about the source fuel and obligations attached to such allotment. According to the respondent, the issue relating to the allotment of coal blocks had assumed a great public importance and hence the Ministry of Coal had directed the State Governments to impose a special condition in the mining lease i.e. for signing Long Term PPA with DISCOMS for participation in the tariff based bits floated by DISCOMS/State Designated Agencies. Accordingly, the Government of Rajasthan vide letter dated 11/12/2014 had imposed the special condition with regard to the long term power purchase agreement with DISCOMS. Under the circumstances, the respondent had invoked the 'Force Majeure' clause of the agreement entered into with the applicant. It is further contended that any adjudication on whether there is Force Majeure or not, would be passing of an order in a matter where Government of Rajasthan would be adversely affected, and therefore the official function of the Government cannot be put to test in arbitration between the applicant and the respondent. The respondent has further contended that in terms of the amendment to the mining lease agreement, the respondent had to supply power only to the DISCOMS with effect from 1/3/2015, and therefore the respondent had applied to the RRVPNL for cancellation of the Open Access granted to the Captive Consumers including the applicant. The captive consumers including the applicant had also objected to RRVPNL that their open access should not be canceled However, the RDPPC/RRVPNL overruled their objections and reduced the open access to "0" vide letter dated 19/3/2015 (Annex. R -2). Thereafter the supplementary agreement was executed on 9/4/2015 between the RRVPNL and the respondent (Annexure -R -3). Thus according to the respondent, so long as the Mining amendment was in force, the restriction on supply to persons other than the DISCOMS would remain, and the legality of the mining lease cannot be brought into the question in the arbitration proceedings between the applicant and the respondent.;