Bhushan Steel vs Singapore International Arbitration Centre and Another

Manmohan Singh, J.—This order shall dispose of the application filed by the applicant/ Defendant in the suit seeking correction in the order passed by this Court on 04.06.2010 in IA No. 11355/2009 filed by the Defendant No. 2 under Order VII Rule 11(d) of the Code of Civil Procedure, 1908.

The main premise of the application is that the said order passed by this Court dated 04.06.2010 needs to be corrected in as much as in para 47 where in this Court observed that the parties by the agreement have excluded the provisions of the Indian Arbitration and Conciliation Act. The said observation in para 47 as stood in the order are recorded as under:

In the present case, it is evident that the parties by agreement have expressly and impliedly excluded the provisions of the Arbitration and Conciliation Act, 1996. Thus, the suit is not maintainable.

Learned senior counsel Mr. Sandeep Sethi appearing on behalf of the applicant/Defendant submitted that the observations made in para 47 has to be qualified by the word "not" and the appropriately the said finding may be corrected as that the parties by the agreement have not excluded the provisions of the Indian Arbitration law. This as per Mr. Sethi has to be corrected as the finding that the parties have excluded the Indian Arbitration Act would mean that the dispute is not arbitrable which is not consistent with the main finding of rejecting the plaint on the ground of order 7 Rule 11 (d) which is that the suit is barred by the law of arbitration.

Per Contra Mr. Chandiok, Learned Counsel for the non applicant opposed the said correction petition by urging that the Petitioner/application cannot seek review under the garb of the correction. He submitted that there is a time limitation for seeking the review which has elapsed.

Further Mr. Chandiok, learned Senior counsel and ASG contended that the order dated 04.06.2010 passed by this Court observes about international commercial arbitration which is the subject matter in which the present dispute falls. Thus, he states that the finding in the para 47 needs no correction as the parties have excluded the provisions of Arbitration law by way of the agreement and thus no correction is required.

Before adverting to my discussion, it is noticeable that the Respondent/ non applicant has preferred an appeal before this division bench of this Court wherein the applicant has submitted about the clarification which is required in the matter. It is after the order passed by the Division Bench, this application was filed.

I have gone through the submissions of the learned Counsel for the parties and have given careful consideration to the same. I have also gone through the order passed on 04.06.2010 by me.

I wish to say that the order passed on 04.06.2010 in IA No. 11355/2009 rejects the suit of the plaintiff on the ground that the suit is barred by the law of arbitration as the same is arbitrable in nature in view of Section 5 of the Indian Arbitration and Conciliation act. The order while arriving at this finding of rejection of plaint discusses two aspects which are highlighted as under:

a) Applicability of Part 1 provisions more specifically Section 5 on Part 2 arbitrations of the Act - wherein this Court has held that Section 5 would be applicable to Part 2 arbitration also .

b) The impact of Section 5 on the civil proceedings- This Court observed that Section 5 limits the extent of court''s intervention in the disputes which are arbitrable in nature.

In consequence, the finding is that the suit is barred in view of Section 5 of the Act as the suit is expressly barred and thus the bar envisaged u/s 5 would operate. The plaint is liable to be rejected under order 7 Rule 11 (d).

In view of this finding, it needs to be clarified that it is only operation of the provisions of Section 5 of the Indian Arbitration and Conciliation Act, 1996, the suit is held to be barred by the said law. Thus, under no circumstances, it can be said that the parties by an agreement have excluded provisions of the Indian arbitration Act. Rather, the said finding needs to be corrected by adding the word not the same which would render the meaning to the same which is in consonance with the main finding. Thus, the correct finding ought to be that the parties by an agreement have not express or impliedly excluded the provisions of the Arbitration and Conciliation Act, 1996 which in other words would mean that the said provisions are applicable and by operation of the same ; in consequence the suit is barred.

Accordingly, the application filed by the applicant is allowed and the finding in para 47 is corrected as it was a clerical mistake in the order. The order is modified to the extent of adding the word "not" in the same. The corrected finding would read as under:

In the present case, it is evident that the parties by and agreement have not expressly and impliedly excluded the provisions of the Arbitration and Conciliation Act, 1996. Thus, the suit is not maintainable.

The application is accordingly disposed of.