PAYAL CHAWLA SINGH Vs THE COCA-COLA CO.
Bench: RANJAN GOGOI
Case number: ARBIT.CASE(C) No.-000003-000003 / 2008
Diary number: 9548 / 2007
Advocates: MOHIT D. RAM Vs
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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