Swatanter Kumar, C.J.@mdashThe applicant which is a Public Limited Company entered into a contract of lease with the respondents for supply, including erection, commissioning, maintenance, testing and transportation at specified locations, of 47,987 Low Tension Load Management Systems (hereinafter referred to as `LTLMS''). The work order was issued by the Chief Engineer (Distribution) of the Respondents. The applicant installed 17,294 LTLMS. However, in the year 1998, some disputes arose between the parties which were referred to the Arbitral Tribunal consisting of Mr. Justice V.D. Tulzapurkar (Retd.), Mr. Justice S.C. Pratap (Retd.) and Mr. Justice M.L. Pendse (Retd.). The Arbitral Tribunal made an Award on 18th June, 2004. Some relief was granted to the applicant. The relief granted by the Arbitral Tribunal reads as under:
AWARD
(A) The Respondents shall pay to the claimants sum of Rs. 185,97,86,399/( Rupees One hundred Eighty Five Crores Ninety Seven Lakhs Eighty Six Thousand Three hundred Ninety Nine only) towards damages in respect of work order dated March 27, 1997.
(B) The aforesaid amount is payable after deducting there from Rs. 6,81,99,390/( Rupees Six Crores Eighty One Lakhs Ninety Nine Thousand Three Hundred Ninety only) paid by the Respondents to the Claimants in pursuance of interim order passed by the Tribunal.
(C) The Respondents shall pay interest at the rate of 10% p.a. on the sum of Rs. 179,15,87,009/( Rupees One Hundred Seventy Nine Crores Fifteen Lakhs Eighty Seven Thousand Nine only) from the dae of the award till realisation.
(D) The Respondents shall pay to the claimants sum of Rs. 1,00,00,000/( Rupees One Crore only) towards the cost of the proceedings.
(E) The counter claim filed by the Respondents stands dismissed in its entirety.
(F) The Bank guarantees furnished by the Claimants in pursuance of interim orders passed by Tribunal to stand discharged one month after the date of declaration of Award.
2. Against the Award dated 18th June, 2004, the respondents herein filed a petition (Arbitration Petition No. 374 of 2004) u/s 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as "the Act") challenging the said award. The applicant, on the other hand, filed two petitions viz. Arbitration Petition No. 372 of 2004 and 524 of 2004 both u/s 9 of the Act, praying that the respondents deposit a sum of Rs. 61,68,47,975/and a sum of Rs. 244,22,33,845/, respectively, in court. Vide judgment dated 3rd August, 2005 in Arbitration Petition No. 374 of 2004, the award dated 18th June, 2004 was set aside. This judgment was challenged in appeal (Arbitration Appeal No. 672 of 2005) and the Appellate Court vide its judgment dated 22nd October, 2008 set aside the judgment of the Single Judge and remanded the case back for adjudication afresh in accordance with the parameters set out by Section 34 of the Act. In a SLP preferred against the judgment of the Appellate Court, before the Supreme Court, the Supreme Court vide order dated 18th December, 2008 declined to interfere with the order of the Division Bench and requested the learned single Judge, to whom the case had been remitted, to dispose of the same expeditiously within three months. The learned single Judge vide judgment dated 18th March 2009 dismissed the petition. Both the parties to the present application have filed appeals (Appeal Nos. 165 of 2009 and 166 of 2009) which are pending. In view of the subsequent events, the applicant did not press the petitions u/s 9 and the same were withdrawn.
3. In other words, since the year 1999, the parties have been pursuing their respective remedies under the Act and various orders have been passed from time to time. During the interregnum period, vide letter dated 30th August, 2004, the Advocates acting on behalf of the respondents served a letter upon the applicant requiring them not to remove any panel without the permission of the respondents and if such an act was done and the panels are not returned within one week then they reserved their right to take action in accordance with law. This letter was replied to by the applicant vide its letter dated 31st August, 2004. The arbitration proceedings between the parties had concluded and they asserted that the material was being unauthorisedly detained by the respondents. This further aggravated the differences between the parties and vide notice dated 14th October, 2004, the applicant raised demand and also claimed interest and claimed a sum of Rs. 245,22,33,845/with 18% interest on the said claims. These claims were primarily raised on the basis of the wrongful detention of LTLMS and LTSC''s. In furtherance to this notice of demand, vide letter dated 27th November, 2004, the applicant invoked Clause 15 of the work order dated 27th March, 1997. The respondents did not respond and accept the request for arbitration resulting in filing of the present arbitration application, No. 9 of 2005, u/s 11 of the Act. Clause 15 of the Arbitration agreement reads as under:
15.0 Arbitration/Disputes:
If any dispute arise by virtue of this lease contract both the parties shall strive to settle the disputes amicably. However, if such dispute cannot be settled mutually, the matter shall be referred for Arbitration jointly in accordance with the provisions of the Indian Arbitration Act for the time being in force, with one Arbitrator appointed by each party and an Umpire appointed by prior mutual consent. However, if the dispute is not resolved the Cl. No. 16 shall be operated.
4. The agreement between the parties is not disputed and resultantly there is no dispute to the arbitration agreement as well. Clause 15 of the agreement between the parties had been admittedly invoked earlier by the parties, correspondence was being exchanged between the parties as back as in the year 2004, notice for further disputes had been given by the present applicant. The contention raised before this Court by the respondents is that the Award dated 18th June 2004 had determined all the controversies between the parties and, therefore, the arbitration clause stood exhausted. It is further argued that the applicant ought to have claimed or ought to have raised all claims at the first instance and cannot claim any amounts which the applicant ought to have claimed at the very initial stage. No claiming of such amount tantamounts to waiver of the claim and, therefore, the present petition is not maintainable. These questions being legal, should be determined by this Court and cannot be left to the Arbitrator for being decided. On the other hand, the applicant contends that the claim raised now are even for the period subsequent to the invocation of the arbitration agreement and primarily relate to the wrongful retention, use of LTLMS and the interest on that amount has been claimed. Thus, it is not covered even indirectly under the provisions of Order 2 Rule 2 of the CPC and the applicant has not waived any of its claims. The contention raised and even the objections taken by the respondents can fairly be decided by the Arbitrator within the ambit and scope of Section 16 of the Act. Reliance has been placed on the case of
5. It is really not necessary for this Court to examine the merit of the contentions raised in a petition u/s 11 of the Act. These are disputes which would require documentary and oral evidence to be examined in their correct and legal perspective. Suffice it to note that in terms of the judgment of the Supreme Court in the case of Union of India v. Onkar Nath Bhalla & Sons JT 2009 SC (5) 682 the arbitration agreement is in existence. According to the applicant, the disputes have arisen between the parties. This arbitration clause has been invoked by the applicant on an earlier occasion and even Section 9 petition had been filed in which there was hardly any dispute with regard to existence and validity of the arbitration agreement. The question whether the disputes now raised are covered by the arbitration agreement or not and whether there is any abandonment of claim by the applicant at any earlier stage is a mixed question of fact and law and can more appropriately be gone into by the learned Arbitral Tribunal in view of the language of Section 16 of the Act. These questions are the questions which will fall in the second category of the issues or points of determination as classified by the Supreme Court as observed in the case of National Insurance Company Ltd. (supra). These are not the issues which would fall in paragraph 22(1) of that judgment inasmuch as it is not even pleaded that the applicant has not approached the appropriate Court and that both parties are not parties to the agreement. Whether the claim is barred in law or the claim falls within the arbitration clause or not are the matters which can quite safely be determined by the Arbitral Tribunal. This would further require some evidence, oral and documentary, before any of the parties to the present application can succeed on the merit of the issues raised. It is neither appropriate nor would it be in the interest of parties that this Court should examine the merit or otherwise of the claims and the scope of the arbitration agreement in the peculiar facts and circumstances of the case. Vide Award dated 18th June 2004 no claims of the applicant were accepted which were ultimately upheld by the Court. Whether the subsequent claims are covered under the arbitration clause or not and whether such claims could be raised in face of the previous litigation between the parties, are the matters which can legally and fairly examined by the Arbitral Tribunal. Whether the invocation of the arbitration agreement and consequently pronouncement of the award would exhaust the arbitration clause or not again is a mixed question of fact and law.
6. In the circumstances aforenoticed, the petition u/s 11 is allowed. The respective parties are hereby directed to nominate their respective Arbitrators, within one week from the pronouncement of this judgment, who in turn, will appoint an Umpire by mutual consent in terms of Clause 15 of the arbitration clause. No order as to costs.
