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NON-REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL ORIGINAL JURISDICTION

ARBITRATION PETITION NO.6 OF 2014

M/s. System for International Agencies … Petitioner

Versus

M/s. Rahul Coach Builders Pvt. Ltd. ...Respondent

J U D G M E N T

ANIL R. DAVE, J.

1. Heard the learned counsel.  

2. The  arbitration  clause  incorporated  in  the  agreement  

regarding sale contract dated 2nd May, 2011 reads as under:

“Disputes: In case of any dispute arising out of this  agreement between the parties, the same shall be  referred  to  the  arbitration  under  the  by-laws  of  Indian Company’s Act 1956 and all amendments of  this Act up to date or shall be settled and decided by  arbitration as per  International  Trade Laws and all  amendments of this Act up to date.”

3. Upon perusal of the said clause it is very clear that the  

parties to the agreement had agreed to refer the dispute to  

arbitration  under  the  provisions  of  the  ‘By-laws  of  Indian  

Companies Act, 1956’.

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4. The learned counsel appearing for the parties had fairly  

conceded  that  there  are  no  by-laws  framed  under  the  

provisions of the Indian Companies Act, 1956.

5. Though an effort was made to show that in a reply to a  

winding up petition, one of the parties had agreed to refer the  

matter to arbitration but there also there was vagueness and  

even  that  willingness  to  refer  the  dispute  to  an  arbitrator  

cannot be said to be an arbitration agreement.

6. Upon perusal of the aforestated clause, it is clear that the  

clause with regard to arbitration is quite vague and as there  

are no by-laws framed under the provisions of the Companies  

Act, no arbitrator can be appointed.

7. On account of the aforesaid vagueness in the arbitration  

clause incorporated in the sale contract dated 2nd May, 2011,  

there  cannot  be  any  arbitration  and  therefore,  this  petition  

made under the provision of Section 11(6) of the Arbitration  

and Conciliation Act, 1996 fails.

8. Needless to say that it would be open to the parties to

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take appropriate remedy in accordance with law.

9. The arbitration petition is disposed of as rejected.        

…….…………………J.   (ANIL R. DAVE)

New Delhi February 16, 2015.