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IN THE SUPREME COURT OF INDIA

CIVIL  ORIGINAL  JURISDICTION  

ARBITRATION     PETITION     NO.     18     OF     2011   

M/S. CALCUTTA INDUSTRIAL CORP.                   Petitioner(s)

                VERSUS

M/S. JAYA STEEL & SCRAP LLC                      Respondent(s)

O     R     D     E     R   

This is an application filed under Section  

11(6) of the Arbitration and Conciliation Act, 1996  

read with paragraph 3 of the Scheme framed by  

Hon'ble the Chief Justice of India under Section  

11(10) of the said Act for appointment of an  

arbitrator.  

It is the case of the petitioner that the  

parties had entered into an agreement dated  

25.5.2009.  As per the agreement, the respondent  

non-applicant was to supply 12500 MT metal scraps  

consisting of used Rails to the petitioner-

applicant. The rate was fixed at USD

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240/PMT/CIF/ASWP and the total contract value was  

USD $ 3,000,000.00 (Three Million United States  

Dollars). The payment was to be made on DP basis  

(i.e Presentation of Documents) within 4-7 days of  

receipt of documents in buyers (petitioner)  bank as  

mentioned in Article 14 of the agreement.  Article  

20 of the agreement provided for a penalty in case  

of failure/late delivery of the materials.   

In accordance with the agreement, the  

applicant has sent to the non-applicant $ 1,000,000  

(One Million Dollars) from time to time, but no  

material was received from the non-applicant.  In  

the meantime, in anticipation of the receipt of the  

material, the applicant had already entered into an  

agreement for sale of the same. In spite of the  

repeated requests, the material was not sent by the  

non-applicant. Consequently, on 29.10.2009, the  

applicant sent a notice to the non-applicant seeking  

to refer the matter to arbitration in terms of the  

arbitration clause contained in Article 24 of the  

Agreement which reads as under:

“This contract the Polish law, the European  

Union member is only accepted any dispute

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arising from or in connection with the  

contract shall be settled through friendly  

negotiation. In case no settlement is  

reached, the dispute shall be submitted to  

District Court in Spain and India for  

arbitration in accordance with its rules in  

effect at the time of applying for  

arbitration. The arbitral award is final and  

binding upon both parties.”

A perusal of the aforesaid clause indicates  

that the parties were at liberty to submit to the  

arbitration to an appropriate authority either in  

Spain or in India. By the aforesaid notice, the  

applicant has chosen to seek arbitration in India.  

In spite of the opportunity having been given to the  

non-applicant, they have not chosen to nominate any  

arbitrator.  

The Office Report indicates that the service  

of notice in this matter is complete. However, in  

spite of the notice having been served, none appears  

on behalf of the non-applicant. The averments made  

in the petition have remained un-controverted. The  

arbitration clause does not indicate as to whether  

the arbitration is to be referred to a sole

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arbitrator or more than one arbitrator.  

Learned counsel for the applicant submits  

that the applicant would be satisfied if the matter  

is referred to the sole Arbitrator. He has also  

submitted that it would be appropriate to nominate a  

former Judge of this Court.  

In my opinion, there is a valid subsisting  

arbitration clause. The non-applicant seems to have  

prima facie acted in breach of the agreement. The  

dispute seems to have arisen out of a bona fide  

arrangement between the parties. The arbitration  

petition also seems to have been filed within  

limitation. In such circumstances, I allow this  

petition and refer the dispute raised in this  

petition or any other dispute that may become  

available to the parties, to the sole arbitrator.  

The non-applicant shall be at liberty to raise any  

counter-claim, if so advised.  

I hereby appoint Mr. Justice B.P. Singh,  

former Judge of this Court, residing at A-7, Neeti

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Bagh, (3rd Floor), New Delhi-110049, as the sole  

Arbitrator.      

The learned arbitrator shall be at liberty to  

fix his own remuneration and any other terms and  

conditions for the arbitration as deemed fit and  

proper, at his sole discretion. The seat of the  

arbitration shall be in Delhi. However, the  

Arbitrator may hold the arbitration proceedings at a  

place most convenient to the parties, either within  

India or outside India.  

Let a copy of this order be communicated to  

the learned Arbitrator so that he may enter upon  

reference as expeditiously as possible.  

.....................J       (SURINDER SINGH NIJJAR)

New Delhi; July 25, 2012.