Supreme Court of India
Taiyo Membrance Corp.P.Ltd vs Shapoorji Pallonji & Co.Ltd on 9 September, 2015Bench: Ranjan Gogoi
IN THE SUPREME COURT OF INDIA
CIVIL ORIGINAL JURISDICTION
ARBITRATION CASE (CIVIL) NO.2 OF 2015
TAIYO MEMBRANE CORPORATION PTY.
SHAPOORJI PALLONJI & CO.LTD. …RESPONDENT
J U D G M E N T
1. This application under Section 11(6) of the Arbitration and
Conciliation Act, 1996 (hereinafter referred to as “the Act”) has been
lodged by one Taiyo Membrane Corporation Pty. Ltd. seeking appointment of
an arbitrator to resolve certain disputes that have arisen out of three sub-
contracts executed with the respondent in respect of works relating to
renovation of the Jawaharlal Nehru Stadium, New Delhi. The said works were
awarded to the respondent by the C.P.W.D.
2. The area of dispute is small and narrow, namely, the entitlement of
the petitioner to 5% of his claimed dues which, according to the
petitioner, has been wrongly withheld by the respondent.
3. The respondent has objected to the appointment of an Arbitrator by
the Court, inter alia, on the ground that the contractual obligations
incumbent on the petitioner/applicant have not been fulfilled without which
the demand for release of the amount, as aforesaid, is not justified. As
the said objection itself raises an arbitrable issue the same need not
engage the attention of the Court. Such attention, however, has to be
focused on the principal objection of the respondent. The same is to the
effect that the two of the sub-agreements were between Taiyo Membrane
Corporation and the respondent Company whereas one sub-agreement was
between Taiyo Membrane Corporation (India) and the respondent. The
applicant is Taiyo Membrane Corporation Pty. Ltd. which is not a party to
any of the said sub-agreements. Besides, it is contended that invocation
of the arbitration clause was by the applicant who is not a party to the
agreements. On the said basis, it is urged that there is no valid
invocation of the arbitration clause and consequently there is no failure
on the part of the respondent to appoint the arbitrator so as to warrant an
order from the Court under Section 11(6) of the Act. It is also urged that
one of the sub-agreements being between two Indian entities i.e. Taiyo
Membrane Corporation (India) and the respondent Company any appointment of
an arbitrator would fall outside the jurisdiction of this Court under
Section 11(6) of the Act.
4. The above objections of the respondent have been sought to be met by
the petitioner by filing a rejoinder affidavit to point out that the
Letters of Intent with regard to the works allotted under the sub-
agreements were issued in favour of Taiyo Membrane Corporation Pty. Ltd.
That apart, several correspondences exchanged between the respondent
Company and the Taiyo Membrane Corporation Pty. Ltd. with regard to the
works covered by the sub-contracts have also been referred to and relied
upon to contend that there is no doubt and ambiguity with regard to the
fact that the Taiyo Membrane Corporation Pty. Ltd. and Taiyo Membrane
Corporation are one and the same entity. Insofar as the agreements
executed by Taiyo Membrane Corporation (India) is concerned, it is urged
that the above position has also been clarified by subsequent
communications exchanged between the respondent Company and Taiyo Membrane
Corporation Pty. Ltd. with respect to the work covered by the agreement in
which one of the parties is Taiyo Membrane Corporation (India).
5. While it is correct that there is some confusion with regard to the
description of the parties in the sub-agreements; the legal notice(s); and
the letter(s) of invocation; the L.O.Is. issued in respect of the works and
the correspondences exchanged by and between the parties make it clear that
the applicant Taiyo Membrane Corporation Pty. Ltd. and Taiyo Membrane
Corporation are one and the same entity and the works under the sub-
agreements had been allotted by the respondent to the said entity. In this
regard it may also be relevant to note that under the Australian
Corporation Act, 2001 (Section 57A) a Corporation includes a Company and a
proprietary Company Limited by shares is incorporated as Pty. Ltd.
6. In the above circumstances the alleged mis-description will not
affect the maintainability of the present application. As already
observed, the Court does not find any ambiguity or inconsistency in the
description of parties so as to non-suit the applicant-petitioner by
dismissing its application on the above basis. The ambiguity, if any, in
the description of the parties having been explained and the respondent
Company itself having issued L.O.Is. and having exchanged subsequent
correspondences with the applicant with regard to the works under the sub-
contracts, though executed in the name of the Taiyo Membrane Corporation
and Taiyo Membrane Corporation (India), the applicant’s petition cannot be
held to be not maintainable as urged on behalf of the respondent.
7. Having held as aforesaid and the remaining objections, as noticed,
being within the province of the Arbitrator the Court is inclined to grant
the prayers made. Accordingly, Dr. Justice M.K. Sharma, a former Judge of
this Court is appointed as the sole Arbitrator.
8. All disputes including the disputes raised in the present petition
are hereby referred to the learned sole Arbitrator. The learned Arbitrator
shall be at liberty to fix his own fees/ remuneration/other conditions in
consultation with the parties.
9. Let this order be communicated to the learned Arbitrator so that the
arbitration proceedings can commence and conclude as expeditiously as
10. The Arbitration Petition is disposed of in the above terms.
SEPTEMBER 09, 2015