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NON-REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL ORIGINAL JURISDICTION

ARBITRATION PETITION (CIVIL) NO.3 OF 2008

PAYAL CHAWLA SINGH                 ...PETITIONER (S) VERSUS

THE COCA-COLA CO. & ANR.                ...RESPONDENT (S)

JUDGMENT

1. The  petitioner  is  a  former  employee  of  Coca-Cola  

India, Inc., the respondent No.2 herein.   At the time of  

joining  the  respondent  company  an  agreement  dated  

20.09.1995 was entered into between the petitioner and  

the respondent No.2, relevant features of which will  be  

noticed  in  due  course.   It  appears  that  while  in  

employment in the respondent company,  the petitioner  

had complained of gender discrimination and harassment  

primarily on account of the service conditions relating to  

pay and emoluments.   The complaint  of  the petitioner  

was sought to be redressed by the respondent company  

by appointing an independent investigator and thereafter

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through mediation proceedings which did not yield any  

result.   With  effect  from  28.07.2004, the  petitioner’s  

resignation from service in the respondent No.2 company  

became effective and payment in full and final settlement  

of her claims had also been tendered and received by the  

petitioner.

2.  It appears that on 05.12.2006 the petitioner issued a  

legal notice to the respondents invoking the arbitration  

mechanism  under  the  “solutions  programme”  and  

claiming compensation against  harassment  and gender  

discrimination that she claimed to have suffered during  

the  course  of  her  employment  and  even  after  her  

resignation.  While it will not be necessary to go into the  

detailed facts and circumstances in which the grievances  

of  the  petitioner  came  to  be  resurrected  after  her  

resignation,  suffice  it  will  be  to  notice  that  an  SMS  

message received around this time by the petitioner from  

one Mr.  Adil  Malia,  Vice-President,  Human Resources of  

the respondent No.2 company, apparently, had triggered  

off the aforesaid response of the petitioner.  The demand  

for arbitration made by the petitioner was refused by the

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respondent  on  the  ground  that  the  “solutions  

programme” was not applicable to the petitioner and the  

same  was  meant  only  for  employees  of  the  first  

respondent in the United States of America.  This has led  

to the filing of the instant application under Section 11(6)  

of the Arbitration and Conciliation Act, 1996 (for short the  

“1996 Act”) resulting in the proceedings in question.

3. It will be necessary, at this stage, to take note of the  

details of the “solutions programme” in terms of which  

the  petitioner  claims  the  mechanism  for  arbitration  

contained  therein  to  be  a  part  of  the  contract  of  

employment between her and the respondents.   

4. Some time in the year 1999 four African-Americans  

who  were  current  and  former  employees  of  the  first  

respondent  had  filed  a  complaint  seeking  declaratory,  

injunctive and other equitable reliefs and compensatory  

and  punitive  damages  on  account  of  alleged/claimed  

infringement  and deprivation  of  rights  of  the  aforesaid  

persons  by  the  respondent  No.1.   On  16.11.2000,  a  

settlement  was  arrived  at  between  the  aforesaid

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employees of the first respondent and the company.  The  

said  settlement  formed  a  part  of  the  consent  decree  

dated  07.06.2001  of  an  United  States  District  Court  

(Georgia).  The aforesaid decree, inter alia, provided for  

constitution of a task force to continuously evaluate the  

human  resource  policies  and  practices  of  the  first  

respondent and also to consider whether implementing  

an arbitration procedure would be appropriate.  The task  

force submitted its report from time to time and it was in  

the 3rd annual report submitted on 01.12.2004 that of the  

various problem resolution methods, the following were  

also incorporated:-

“4) Mediation-  this  involves  a  neutral  third party outside the Company and is  available  only  for  resolution  of  legal  disputes,  such  as  discrimination  or  harassment.

5) Arbitration  –  If  mediation  fails  to  resolve  the  legal  dispute  to  the  employee’s  satisfaction,  arbitration  is  available.  This requires both parties to  explain  their  sides  to  a  trained  arbitrator, usually an attorney or judge.”

5. This,  in  essence  is  the  “solutions  programme”  on  

which the petitioner has based her claim.  According to  

the petitioner the “solutions programme” is applicable to

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all  employees  of  Coca  Cola  Company,  Inc.  and  its  

subsidiaries including Cola Cola India (Respondent No.2).  

The petitioner  has  contended that  even admitting that  

the  arbitration  provision  in  the  “solutions  programme”  

applies only to employees based in the United States, the  

same  has  been  expressly  invoked  in  the  case  of  the  

petitioner  through  correspondence,  e-mails  etc.   The  

petitioner relies on an e-mail dated 25.09.2002 issued by  

Coca  Cola  Company  informing  its  employees  of  the  

change  in  policy  and  the  extension  of  the  “solutions  

programme” to all employees world wide.  The petitioner  

also relies on a blank memo dated 20.12.2002 with an  

intake  form  sent  to  the  petitioner  for  accessing  the  

conflict  resolution  mechanism  to  resolve  harassment  

issues.  As the respondents had refused to comply with  

the demand notice sent by the petitioner for appointment  

of an arbitrator, the instant petition has been filed under  

the provisions of 1996 Act.

6. In  reply,  the  respondent  contend  that  the  

employment agreement between the petitioner and the  

respondent No.2 dated 20.09.1995 does not contain any

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arbitration  clause.   According  to  the  respondents,  the  

“solutions programme” is not applicable to employees of  

subsidiaries  of  the  respondent  No.1 outside the  United  

States of America and the same in fact applies only to the  

United States based employees of the first respondent.  

The provisions for arbitration contained in the “solutions  

programme”  are  not  incorporated  in  the  petitioner’s  

employment agreement dated 20.09.1995.  It is further  

contended  that  by  an  amendment  of  the  petitioner’s  

employment agreement made on 05.07.1996 a provision  

was inserted to the following effect:-

“In case of any dispute the jurisdiction to  entertain and try such dispute shall vest  exclusively in a court in Bombay”.

7. The  respondents  have  further  contended  that  the  

“solutions  programme”  contemplated  arbitration  in  the  

United  States  of  America  under  the  Federal  Arbitration  

Act and incorporates the National Rules for the resolution  

of  employment  disputes  of  the  American  Arbitration  

Association  (AAA).   Therefore,  according  to  the  

respondents,  even  assuming  that  the  “solutions

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programme” is applicable to the petitioner, the specific  

reference to the Federal Arbitration Act in the “solutions  

programme”  and  the  applicability  of  the  procedure  

visualized  by  the  National  Rules  for  resolution  of  

employment  disputes  of  the  American  Arbitration  

Association would specifically exclude the applicability of  

Part  I  of  the  1996  Act.   On  the  aforesaid  basis,  it  is  

submitted,  that  the  present  application  filed  under  

Section 11(6) of the 1996 Act will  not be maintainable.  

Furthermore, the respondents contend that the “solutions  

programme” does not contemplate mandatory recourse  

to arbitration under the 1996 Act.  It merely contemplates  

a  possibility  of  the  employees  seeking  arbitration  as  

opposed to an obligation to refer all disputes arising to  

arbitration inasmuch as under the “solutions programme”  

it  is  also  open to  an  employee  to  approach the  Court  

instead of  invoking  arbitration.   It  is  further  submitted  

that the mandatory requirement under Section 7 of the  

1996 Act obliging parties to abide by the decision of the  

Arbitral  Tribunal  is  departed  from under  the  “solutions  

programme” wherein an employee has a choice to accept

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the arbitrator’s decision and the legal  dispute or reject  

such decision and pursue other legal options.

8. Having heard the petitioner-in-person and Shri Amit  

Sibal,  learned  senior  counsel  appearing  for  the  

respondents,  this  Court  unhesitatingly  comes  to  the  

conclusion that there is no binding arbitration agreement  

between the petitioner and her employer so as to enable  

this Court to exercise its jurisdiction under Section 11(6)  

of the 1996 Act.  The attempt of the petitioner to bring in  

the provision for  arbitration contained in the “solutions  

programme” as a part of the terms of her employment  

with  the  respondent  No.2  remains  wholly  

unsubstantiated.   Not  only  the  employment  contract  

signed  by  the  petitioner  does  not  contain  any  specific  

clause of arbitration or makes the provision for arbitration  

contained in the “solutions programme” applicable to her  

employment,  the  clause  providing  for  exclusive  

jurisdiction of  the courts  in  Bombay specifically  negate  

the claim of the existence of an arbitration clause in the  

contract  of  employment  of  the petitioner.   There is  no

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specific  incorporation  of  the  provisions  for  arbitration  

contained in  the “solutions programme” to the case of  

the petitioner by any other communication though a bald  

assertion  to  the  said  effect  has  been  made  by  the  

petitioner  in  her  pleadings  which  has  remained  

unsubstantiated.  Even on a hypothetical application of  

the  “solutions  programme”  the  provisions  contained  

therein with regard to conduct of arbitration proceedings  

in terms with the Federal Arbitration Act and the National  

Rules  for  resolution  of  employment  disputes  of  the  

American  Arbitration  Association  would  specifically  

exclude the provisions of Part I including Section 11(6) of  

the 1996 Act on the strength of the decisions of this Court  

in Bhatia International Vs. Bulk Trading S.A. & Anr.1  

followed in Videocon Industries Limited Vs. Union of  

India & Anr.2 and  Yograj Infrastructure Limited  Vs.  

Ssang  Yong  Engineering  and  Construction  

Company  Limited3 which  would  be  applicable  to  the  

issue  having  regard  to  the  point  of  time  when  the  

question had arisen. Besides, under Section 7 of the 1996  1 (2002) 4 SCC 105 2 (2011) 6 SCC 161 3 (2011) 9 SCC 735\

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Act the parties to an arbitration agreement must agree to  

submit their disputes to arbitration. What is contemplated  

under the “solutions programme” is a mere possibility of  

the  employee  seeking  arbitration  as  opposed  to  an  

obligation to refer all disputes to arbitration.  Also as held  

by this Court in  K.K. Modi  Vs.  K.N. Modi & Ors.4  an  

integral  element  of  Section  7  of  the  1996  Act  is  the  

agreement of the parties to be bound by the decision of  

the  arbitrator.   The  same  is  not  to  be  found  in  the  

“solutions programme” which leaves the employee with  

an option to accept or reject the decision of the arbitrator.

9. For the aforesaid reasons, we are of the view that the  

petitioner is not entitled to invoke this Court’s jurisdiction  

under  Section  11(6)  of  the  1996  Act.   In  view  of  the  

aforesaid  conclusion,  it  will  not  be  necessary  for  this  

Court  to  go  into  certain  other  issues  that  have  been  

raised  by  the  contesting  parties,  namely,  whether  the  

petitioner’s claim is time barred and whether the same  

has been instituted with oblique/collateral motives.   

10. In view of the foregoing discussions, the application  4 (1998) 3 SCC 573

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filed  by  the  petitioner  has  to  fail.   It  is  accordingly  

dismissed.  However, in the facts and circumstances of  

the case there will be no order as to costs.

…………......................J.            (RANJAN GOGOI)

NEW DELHI APRIL 10, 2015