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Bombay HC Recalls Order Appointing Retd Justice VM Kanade As Arbitrator Since Contract Clearly Said ‘No Arbitration Allowed’

Nitish Kashyap
20 Sep 2017 6:12 AM GMT
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In a matter between Pratibha Industries vs Municipal Corporation of Greater Mumbai (MCGM), the Bombay High Court has recalled an earlier order passed on June 27, 2017, appointing Justice VM Kanade (retd) as sole arbitrator disposing off an arbitration petition.

Justice KR Shriram passed the judgment allowing the recall sought in a notice of motion filed by the MCGM.

Case Background

An agreement dated September 19, 2008, was executed between the petitioner and the respondent corporation wherein supply, installation and maintenance of AMR water meters across the city was to be carried out by the petitioner.

The petitioner had filed an arbitration petition to restrain the respondents, including MCGM, from encashing three bank guarantees.

UJ Makhija, counsel for the petitioner, submitted that his clients were ready to go to arbitration and suggested Justice Kanade’s (retd.) name for appointment as sole arbitrator.

On instructions of a BMC assistant engineer, who was present in court at the time, MCGM’s counsel senior advocate EP Bharucha stated that there was no objection in Justice Kanade’s appointment as sole arbitrator.

Accordingly, an order appointing Justice VM Kanade (retd) as sole arbitrator was passed on June 27.

Thereafter, the respondents filed a notice of motion seeking a recall of this order since the agreement between parties clearly stated “no arbitration allowed”.

Bharucha submitted that because of this, the petitioners could not have approached the court for any relief under the Arbitration and Reconciliation Act.

Relying on a judgment by another bench of the high court in Tatva Global Environment (Deonar) Ltd vs The Municipal Corporation of Gr. Mumbai, petitioner’s counsel UJ Makhija argued that clause 22 of the tender notice constitutes an arbitration agreement and, hence, there is an arbitration clause.

Final Order

The court ruled that the case in Tatva Global was not identical to the present one and also there is a specific clause in the agreement dated September 19, 2008, expressly barring arbitration.

Thus, the earlier order appointing a sole arbitrator in the case was recalled.

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