Page 1

1

NON-REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL ORIGINAL JURISDICTION

ARBITRATION CASE (CIVIL) NO.30 OF 2014

PRICOL LIMITED      ...PETITIONER

VERSUS

JOHNSON CONTROLS ENTERPRISE LTD. & ORS.      ...RESPONDENTS

JUDGMENT

1. Appointment of an Arbitrator under  

the  Joint  Venture  Agreement  dated  26th  

December,  2011  (for  short  “the  JVA”)  by  

and between the parties has been sought by  

means of the present application.

2. There  is  no  dispute  between  the  

parties  with  regard  to  the  existence  of  

the  JVA  and/or  with  regard  to  the  fact  

that  disputes  and  differences  over  the  

respective rights and liabilities of the  

parties under the JVA have surfaced.  The  

Arbitration clause under the JVA is in the

Page 2

2

following terms:

“ARTICLE 30

ARBITRATION

30.1 If any dispute arises between  any  of  the  Parties  hereto  during  the  subsistence  or  thereafter, in connection with  the  validity,  interpretation,  implementation  or  alleged  material  breach  of  any  provision  of  this  JVA  or  regarding  any  question,  including  the  question  as  to  whether  the  termination  of  this JVA by any Party hereto  has  been  legitimate,  the  Parties hereto shall endeavour  to  settle  such  dispute  amicably.   The  attempt  to  bring  about  an  amicable  settlement  is  considered  to  have failed as soon as one of  the  Parties  hereto,  after  reasonable  attempts  which  attempt shall continue for not  less  than  sixty  (60)  days,  given fifteen (15) days notice  thereof to the other Party in  writing.

30.2 In case of such failure, the  dispute  shall  be  referred  to  sole arbitrator to be mutually  agreed upon by the Parties. In  case the Parties are not able  to  arrive  at  such  an  arbitrator,  the  arbitrator  shall  be  appointed  in  accordance  with  the  rules  of

Page 3

3

arbitration  of  the  Singapore  Chamber of Commerce.

30.3 The  arbitration  proceedings  shall  be  held  at  Singapore.  The  arbitration  proceeding  s  shall be in English language.  The  award  shall  be  substantiated in writing.  The  court  of  arbitration  shall  also  decide  on  the  costs  of  the  arbitration  proceedings.  The award shall be binding on  the  disputing  Parties  subject  to  applicable  laws  and  the  award shall be enforceable in  any  competent  court  of  law.  The provisions of this clause  shall  survive  the  termination  of  this  JVA  for  any  reason  whatsoever.

30.4 Each of the Parties agree and  acknowledge that damages would  be  inadequate  to  compensate  for the breach of this JVA by  either  Party,  and  each  Party  shall be entitled to equitable  relief  by  way  of  interim  injunction  or  specific  performance  by  recourse  to  courts/judicial  forum  with  appropriate jurisdiction.

ARTICLE 31

GOVERNING LAW

31.1 This JVA shall be governed and  construed  in  accordance  with  the laws of India.”

3. There are certain facts and events

Page 4

4

which have occurred during the pendency of  

the   present  proceeding  which  must  

immediately be taken note of.

4. The  parties  are  not  in  dispute  

that the “Singapore Chamber of Commerce”  

mentioned in clause 30.2 of the JVA is not  

an  Arbitration  Institution  having  any  

Rules  for  appointment  of  Arbitrators.  

However, construing the said reference to  

the “Singapore Chamber of Commerce” to be  

one  to  the  “Singapore  International  

Arbitration  Centre”  (“SIAC”  for  short),  

the  first  respondent,  invoking  the  

arbitration  clause,  had  moved  the  said  

Authority i.e. SIAC for appointment of an  

Arbitrator.   This  was  so  done  on  5th  

September,  2014.   A  copy  of  the  said  

notice/intimation  was  received  by  the  

petitioner  on  11th September,  2014.  

Thereafter, the petitioner had instituted

Page 5

5

the present proceeding on 15th September,  

2014.   In  the  meantime,  the  SIAC,  

exercising its powers under Section 8(2)  

read  with  Section  8(3)  of  the  Singapore  

International Arbitration Act (Cap. 143A)  

(for short “the IAA”), had appointed one  

Mr.  Steven  Y.H.  Lim  as  the  sole  

Arbitrator.   In  a  preliminary  meeting  

between the parties and the learned sole  

Arbitrator held on 30th October, 2014, it  

was  indicated  by  the  petitioner  that  it  

would be challenging the jurisdiction of  

the sole Arbitrator appointed by the SIAC.  

Accordingly, on directions of the learned  

sole  Arbitrator,  there  has  been  an  

exchange  of  written  submissions  on  the  

issue of jurisdiction.  A hearing on the  

question of jurisdiction was also held in  

Singapore  on  18th November,  2014.  

Thereafter, by a partial award, dated 27th  

November,  2014,  the  sole  Arbitrator  had

Page 6

6

ruled  that  the  appointment  made  by  the  

SIAC under the IAA is valid as the parties  

have expressly agreed that Singapore would  

be the seat of Arbitration.  

5. On behalf of the petitioner, it is  

contended  that  under  clause  31.1,  the  

rights of the parties under the JVA is to  

be  governed  by  the  laws  of  India.  

Therefore, in the absence of any contrary  

intention, even the arbitration agreement  

will be governed by Indian Law i.e. the  

Act of 1996.  Clause 30.3 by which the  

parties  had  agreed  that  “arbitration  

proceedings  shall  be  held  at  Singapore”  

has to be consequently construed to mean  

that the seat of Arbitration continues to  

be India and Singapore is only the venue  

of  the  hearings  to  be  conducted  in  the  

Arbitration  proceedings.  On  the  said  

basis,  it  is  contended  that  the  present

Page 7

7

application under Section 11(6) of the Act  

would justify appropriate orders from the  

Court. It is also argued that the parties  

to  the  JVA  have  not  excluded  the  

application of Part I of the Act of 1996.  

The  JVA  has  been  signed  earlier  to  the  

decision of this Court in Bharat Aluminium  

Company  vs.  Kaiser  Aluminium  Technical  

Services  Inc. [(2012)  9  SCC  552].  

Therefore,  the  procedural  law  governing  

the  conduct  of  the  arbitration  would  be  

the law prevailing in India.  

6. It is alternatively submitted that  

even assuming that the seat of Arbitration  

is Singapore, as the rights of the parties  

are to be governed by the  Indian  Law, it  

is only the curial law of Singapore that  

would  apply  to  regulate  the  proceedings  

after the appointment of the Arbitrator is  

made and till the passing of the Award.

Page 8

8

Reference  in  this  regard  is  made  to  

Sumitomo  Heavy  Industries  Ltd.  vs.  ONGC  

Ltd. and others [(1998) 1 SCC 305]  On the  

aforesaid  basis,  it  is  claimed  that  the  

appointment of the sole Arbitrator by the  

SIAC  is  without  jurisdiction  and  this  

Court  ought  to  proceed  to  exercise  its  

powers under Section 11(6) of the Act.  

7. In  reply,  the  respondents  submit  

that clause 30.3 of the JVA makes it,  ex  

facie, clear that the parties have agreed  

that  the  seat  of  Arbitration  would  be  

Singapore. Though the substantive Law that  

would  govern  the  rights  of  the  parties  

under the JVA would be the Indian Law so  

far  as  the  appointment  of  Arbitrator  is  

concerned, it is the agreed terms (clause  

30.2) which will prevail. It is submitted  

that  on  a  reasonable  understanding  of  

clause  30.2,  the  request  of  the

Page 9

9

respondents to the SIAC for appointment of  

a sole Arbitrator and the appointment made  

does not suffer from any infirmity.  It is  

claimed  that  the  “Singapore  Chamber  of  

Commerce”,  not  being  an  Arbitration  

Institution,  the  real  intention  of  the  

parties in clause 30.2 was to approach the  

SIAC for appointment of an Arbitrator in  

the  event  of  the  failure  of  a  mutual  

agreement on this score.  This has been so  

done by the respondents.  Learned counsel  

for  the  respondents  has  also  taken  the  

Court to the past history of the dispute  

between  the  parties  commencing  with  the  

grant  of  interim  measures  by  the  Civil  

Court at Coimbatore under Section 9 of the  

Act and the failure on the part of the  

petitioner to agree to the appointment of  

a retired judge of the Supreme Court of  

India as the sole Arbitrator.  The said  

facts have been pointed out in support of

Page 10

10

the  contention  that  the  petitioner  has  

dragged its feet in the matter so as to  

gain  maximum  advantage  of  the  interim  

order granted in its favour by the Civil  

Court  at  Coimbatore.  Lastly,  it  is  

submitted that the Arbitrator having been  

appointed by the SIAC in accordance with  

the relevant Arbitration clause in the JVA  

and the petitioner having submitted to the  

jurisdiction  of  the  Arbitrator  and,  in  

fact,  a  partial award having been passed  

by  the  sole  Arbitrator  on  the  issue  of  

jurisdiction,  the  present  is  not  a  fit  

case for invoking the powers of this Court  

under Section 11(6) of the  Act.   

8. On  a  consideration  of  the  

respective submissions made by the parties  

and  the  several  precedents  cited  at  the  

bar, this Court is inclined to hold that  

clause  30.2,  on  a  reasonable  and

Page 11

11

meaningful  construction  thereof,  would  

mean that in case the parties are not able  

to  name  a  sole  Arbitrator  by  mutual  

agreement,  the  Arbitrator  is  to  be  

appointed  by  the  SIAC  inasmuch  as  the  

entity  contemplated  in  clause  30.2  i.e.  

“Singapore  Chamber  of  Commerce”  is  

admittedly not an Arbitration Institution'  

having  its  own  Rules  for  appointment  of  

Arbitrators.  Given  the  circumstance,  the  

most reasonable construction of the said  

clause  would  be  to  understand  the  

reference  to  “Singapore  Chamber  of  

Commerce” as to the “SIAC”.

9. From  the  relevant  facts  of  the  

case,  it  is  also  clear  that  the  

respondents at one time had suggested the  

name  of  a  retired  judge  of  the  Supreme  

Court  of  India  as  the  sole  Arbitrator,  

which was not agreed to by the petitioner,

Page 12

12

who  in  turn,  was  inclined  to  nominate  

another learned judge.  Be that as it may,  

in  such  a  situation,  the  respondents  by  

invoking  Arbitration  clause  30.2  had  

approached  SIAC  for  appointment  of  an  

Arbitrator.   This  was  on  5th September,  

2014  i.e.  before  the  present  proceeding  

was instituted by the petitioner.  Though  

the notice of the said request was served  

on the petitioner on 11th September, 2014,  

no steps were taken by the petitioner to  

pre-empt  the  appointment  of  a  sole  

Arbitrator by SIAC.  Mr. Steven Y.H. Lim  

came  to  be  appointed  as  the  sole  

Arbitrator by the SIAC on 29th September,  

2014.  The petitioner has submitted to the  

jurisdiction of Mr. Steven Y.H. Lim.  Even  

if  it  is  held  that  such  participation,  

being under protest, would not operate as  

an estoppel, what must be acknowledged is  

that  the  appointment  of  the  sole

Page 13

13

Arbitrator  made  by  SIAC  and  the  partial  

award on the issue of jurisdiction cannot  

be questioned and examined in a proceeding  

under  Section  11(6)  of  the  Act  which  

empowers the Chief Justice or his nominee  

only to appoint an Arbitrator in case the  

parties  fail  to do so in accordance with  

the  terms  agreed  upon  by  them.   To  

exercise the said power, in the facts and  

events that has taken place, would really  

amount  to  sitting  in  appeal  over  the  

decision of SIAC in appointing Mr. Lim as  

well  as  the  partial  award  dated  27th  

November, 2014 passed by him acting as the  

sole Arbitrator.  Such an exercise would  

be wholly inappropriate in the context of  

the  jurisdiction  under  Section  11(6)  of  

the Act, a view already expressed by this  

Court in a recent decision in Antrix Corp.  

Ltd.  vs.  Devas  Multimedia  P.  Ltd.  

[Arbitration  Petition  NO.20  of  2011

Page 14

14

decided  on  May  10,  2013,  reported  in  

(2013) 6 SCR 453].

10. For  the  aforesaid  reasons,  this  

application under Section 11(6) of the Act  

has  to  fail.   It  is,  accordingly,  

dismissed, however, leaving it open to the  

petitioner  to  avail  of  such  remedies  as  

may be available to it in law.  

....................,J. (RANJAN GOGOI)

NEW DELHI DECEMBER 16, 2014