ARB.P./67/2024 of AMBHUJ HOTEL AND REAL ESTATE PVT LTD THROUGH ITS DIRECTOR Vs MINISTRY OF RALIWAYS AND ANR.

$~1 & 2

*IN THE HIGH COURT OF DELHI AT NEW DELHI

+ARB.P. 67/2024

AMBHUJ HOTEL AND REAL ESTATE PVT LTD THROUGH ITSDIRECTOR..... Petitioner

Through:Mr. S. S. Sisodia, Mr. Saurav Kr.Singh, Ms. Muskan Rawlley, Mr.Moksh Kataria, AdvsSingh, Ms. Muskan Rawlley, Mr.Moksh Kataria, Advs

versus

MINISTRY OF RALIWAYS AND ANR.

..... Respondents

Through:Mr. Vineet Dhanda, CGSC with Mr.A. Singh, Mr. Abhijit Kadyan, Advs.for R-1A. Singh, Mr. Abhijit Kadyan, Advs.for R-1

+ARB.P. 252/2024

AMBUJ HOTEL AND REAL ESTATE PVT LTD

..... Petitioner

Through:Mr. S. S. Sisodia, Mr. Saurav Kr.Singh, Ms. Muskan Rawlley, Mr.Moksh Kataria, AdvsSingh, Ms. Muskan Rawlley, Mr.Moksh Kataria, Advs

versus

MINISTRY OF RALIWAYS AND ANR.

..... Respondents

Through:Mr. Vineet Dhanda, CGSC with Mr.A. Singh, Mr. Abhijit Kadyan, Advs.for R-1A. Singh, Mr. Abhijit Kadyan, Advs.for R-1

CORAM:

HON'BLE MR. JUSTICE DINESH KUMAR SHARMA

O R R%16.05.2024I.A. 1201/2024 (exemption) in ARB.P. 67/2024I.A. 4411/2024(exemption) in ARB.P. 252/2024

Exemptions are allowed subject to all just exceptions.

ARB.P. 67/2024 and ARB.P. 252/2024

1. The present petitions have been filed under Section 11 of theArbitration and Conciliation Act, 1996 (hereinafter, referred to as the'A&C Act'), the petitioner seeks appointment of an Arbitral Tribunalcomprising of Sole Arbitrator to adjudicate the disputes between theparties.Arbitration and Conciliation Act, 1996 (hereinafter, referred to as the'A&C Act'), the petitioner seeks appointment of an Arbitral Tribunalcomprising of Sole Arbitrator to adjudicate the disputes between theparties.

2. Learned counsel for the petitioner submits that the parties had enteredinto Tripartite Agreement dated 08.09.2017 in ARB.P. 67/2024 and22.08.2014 in ARB.P. 252/2024. It is submitted that the saidAgreement contains an arbitration clause (clause 8.09) in both matters,which provides that all disputes, with respect to the said agreement,shall be referred to arbitration as per provisions of the A&C Act. Ithas been submitted that disputes having arisen between the parties,the petitioner invoked arbitration vide legal notice dated 19.09.2023,to which no response has been received till date. The claim amount isaround Rs. 4, 65,00,000/- in ARB.P. 67/2024 and Rs. 2,65,00,000/- inARB.P. 252/2024.into Tripartite Agreement dated 08.09.2017 in ARB.P. 67/2024 and22.08.2014 in ARB.P. 252/2024. It is submitted that the saidAgreement contains an arbitration clause (clause 8.09) in both matters,which provides that all disputes, with respect to the said agreement,shall be referred to arbitration as per provisions of the A&C Act. Ithas been submitted that disputes having arisen between the parties,the petitioner invoked arbitration vide legal notice dated 19.09.2023,to which no response has been received till date. The claim amount isaround Rs. 4, 65,00,000/- in ARB.P. 67/2024 and Rs. 2,65,00,000/- inARB.P. 252/2024.3. Learned counsel for the petitioner submits that the corporate office ofIRCTC is itself based in New Delhi as set out in the agreement itselfhas only got the power to manage the catering services, power tosupervise the catering services, collect the license fee, to terminate thecontract, to raise the demand notices etc. from the licensee, thepetitioner herein, is also based in Delhi and having its corporate officeat 7575/ 1, ram Nagar Paharganj, New Delhi- 110055, thus this Courthas got the jurisdiction to appoint the independent Arbitrator underSection 11(6) of the Act, when despite the receipt of the invocation ofIRCTC is itself based in New Delhi as set out in the agreement itselfhas only got the power to manage the catering services, power tosupervise the catering services, collect the license fee, to terminate thecontract, to raise the demand notices etc. from the licensee, thepetitioner herein, is also based in Delhi and having its corporate officeat 7575/ 1, ram Nagar Paharganj, New Delhi- 110055, thus this Courthas got the jurisdiction to appoint the independent Arbitrator underSection 11(6) of the Act, when despite the receipt of the invocation of

the arbitral notice issued by the petitioner under section 21, till dateno response has come.

4. Learned counsel for the petitioner also submitted that in ARB.P.187/2024 and ARB. P 225/2024, which relates to the same parties indifferent trains, Coordinate Bench of this Court of Hon'ble JusticePrathiba Singh vide its order dated 16.04.24 has already appointedJustice Dinesh Kumar Singh (Retd.), through DIAC as the soleArbitrator to adjudicate the disputes between parties and as the partiesare the same and the disputes broadly relates to the same issue, thusfollowing the broad principle laid down in Gammon India Ltd. &Anr. v. National Highways Authority Of India (2020:DHC:2144) bythis Court and therefore requests to appoint the same sole arbitrator toadjudicate the issues/disputes to avoid the different opinions/awardson same issue and curtail the multiplicity of proceedings.187/2024 and ARB. P 225/2024, which relates to the same parties indifferent trains, Coordinate Bench of this Court of Hon'ble JusticePrathiba Singh vide its order dated 16.04.24 has already appointedJustice Dinesh Kumar Singh (Retd.), through DIAC as the soleArbitrator to adjudicate the disputes between parties and as the partiesare the same and the disputes broadly relates to the same issue, thusfollowing the broad principle laid down in Gammon India Ltd. &Anr. v. National Highways Authority Of India (2020:DHC:2144) bythis Court and therefore requests to appoint the same sole arbitrator toadjudicate the issues/disputes to avoid the different opinions/awardson same issue and curtail the multiplicity of proceedings.

5. Learned standing counsel for respondent submits that in fact, theCoordinate Bench had not taken into account certain relevant factorsand the law. However, the fact of the matter is that theseorders/observations have not been challenged.Coordinate Bench had not taken into account certain relevant factorsand the law. However, the fact of the matter is that theseorders/observations have not been challenged.

6. Learned counsel for respondent no. 2 has submitted that the presentpetition is not maintainable as the present proceeding have beeninstituted without proper authorization. It is submitted that as per theboard resolution Mr. Parth Singh, i.e., the Director of Ambuj Hoteland Real Estate Pvt. Ltd. is authorised to appoint an advocate to draftand file any Petition, and not to institute any proceeding on behalf ofthe Company. Reliance has been placed upon Aditya Ganapa andAnother Vs Religare Finvest Ltd. (2015 SCC OnLine Del 194683)petition is not maintainable as the present proceeding have beeninstituted without proper authorization. It is submitted that as per theboard resolution Mr. Parth Singh, i.e., the Director of Ambuj Hoteland Real Estate Pvt. Ltd. is authorised to appoint an advocate to draftand file any Petition, and not to institute any proceeding on behalf ofthe Company. Reliance has been placed upon Aditya Ganapa andAnother Vs Religare Finvest Ltd. (2015 SCC OnLine Del 194683)

wherein the arbitral award was set aside only on the ground that theperson filing the SOC was not authorised to do so by the Power ofAttorney on record.

7. Learned counsel has further submitted that the mandatary pre arbitralmechanism has not been followed as the notice invoking arbitration insought reference of disputes to arbitration under "Article/Clause 20"of the MLA dated 03.05.2016. The said Clause stipulates that:mechanism has not been followed as the notice invoking arbitration insought reference of disputes to arbitration under "Article/Clause 20"of the MLA dated 03.05.2016. The said Clause stipulates that:

“20.1 In the event of any dispute, controversy or claim ofany kind of nature... the parties shall firstly attempt toamicably resolve such dispute through the highest level ofnegotiations and discussionany kind of nature... the parties shall firstly attempt toamicably resolve such dispute through the highest level ofnegotiations and discussion

20.2 In the event that Disputes between the parties subsistbeyond 30 days negotiation between the Parties, then theDispute shall be settled as per provisions of Arbitration andConciliation Act 1996. ....”beyond 30 days negotiation between the Parties, then theDispute shall be settled as per provisions of Arbitration andConciliation Act 1996. ....”

Therefore, it is submitted that the Clause 20, pursuant whereto theinvocation has been sought provides for mandatory pre-arbitralmechanism. Such mandatory pre-arbitral mechanisms have beenupheld by this Court in RS Khanna & Sons vs Rites Ltd. & Ors.(Judgment rendered on 29.01.2024).

8. It has further been submitted that the Clauses mandating attempts atamicable settlement as precursor to invocation of arbitration have alsobeen upheld by this court in various cases wherein this Court waspleased to find the pre-arbitral conciliation to be mandatory, and theapplication under Section 11 of the A&C Act, was found to bepre-mature. Learned counsel has placed reliance upon HaldiramManufacturing Company pot. Ltd. vs DLF Commercial ComplexesLimited (2012 SCC OnLine Del 2139) to buttress his argumentamicable settlement as precursor to invocation of arbitration have alsobeen upheld by this court in various cases wherein this Court waspleased to find the pre-arbitral conciliation to be mandatory, and theapplication under Section 11 of the A&C Act, was found to bepre-mature. Learned counsel has placed reliance upon HaldiramManufacturing Company pot. Ltd. vs DLF Commercial ComplexesLimited (2012 SCC OnLine Del 2139) to buttress his argumentwherein, Section 8 application seeking reference of dispute toarbitration, was found to lack merit as the party filing the applicationhad not followed the pre-arbitral conciliation steps and therefore therequest for reference was not entertained as that stage.

9. It must fairly be stated that such pre-arbitration clauses mandatingamicable settlement have in certain cases being given go-by, whenthe arbitration has been invoked as matter of urgency or where thecourt has come to conclusion that no fruitful purpose will be servedby taking recourse to conciliation. In the present case, no attemptwhatsoever has been made at negotiation in terms of Clause 20.1.there is no averment in the petition that there is any urgency inapproaching this Hon'ble Court or that the conciliation shall serve nofruitful purpose.amicable settlement have in certain cases being given go-by, whenthe arbitration has been invoked as matter of urgency or where thecourt has come to conclusion that no fruitful purpose will be servedby taking recourse to conciliation. In the present case, no attemptwhatsoever has been made at negotiation in terms of Clause 20.1.there is no averment in the petition that there is any urgency inapproaching this Hon'ble Court or that the conciliation shall serve nofruitful purpose.

10.The petition is not maintainable as this Hon'ble Court has nojurisdiction to entertain the present application under Section 11 of theA&C Act. The invocation of arbitration is under the MLA Para 9 (Pg.64). The MLA carries specific exclusive jurisdiction clause (Article21.4 at Pg 45) (Distinct from the Dispute Resolution Clause underArticle 20.1 to Article 20.4). Article 20.2(a) mandated arbitration by aGazetted Railway Officer.jurisdiction to entertain the present application under Section 11 of theA&C Act. The invocation of arbitration is under the MLA Para 9 (Pg.64). The MLA carries specific exclusive jurisdiction clause (Article21.4 at Pg 45) (Distinct from the Dispute Resolution Clause underArticle 20.1 to Article 20.4). Article 20.2(a) mandated arbitration by aGazetted Railway Officer.

11.Learned counsel for the respondent no. 2 submitted that the order ofthe Coordinate Bench of this court records no finding on the aspect ofthe Tripartite Agreement overriding the exclusive jurisdiction clauseof the MLA. Para 10 of the said order only records that "After havingperused the above clauses and the fact that the IRCTC is itself basedthe Coordinate Bench of this court records no finding on the aspect ofthe Tripartite Agreement overriding the exclusive jurisdiction clauseof the MLA. Para 10 of the said order only records that "After havingperused the above clauses and the fact that the IRCTC is itself based

in Delhi as set out in the agreement itself, this Court would havejurisdiction to appoint the Arbitrator under Section 11(6) of the Act."

12.Learned counsel for the respondent no. 2 submits that the present casequalifies as one where though the parties have not delineated the seatof arbitration, they have agreed on an exclusive jurisdiction clause. Itis submitted that the settled law in such scenario is that suchexclusive jurisdiction clause shall guide the exercise of power underSection 11 by the competent High Court. Reliance placed upon AarkaSports Management Pvt. Ltd. (MANU/DE/1347/2020).qualifies as one where though the parties have not delineated the seatof arbitration, they have agreed on an exclusive jurisdiction clause. Itis submitted that the settled law in such scenario is that suchexclusive jurisdiction clause shall guide the exercise of power underSection 11 by the competent High Court. Reliance placed upon AarkaSports Management Pvt. Ltd. (MANU/DE/1347/2020).13.Learned counsel submitted that the exclusive jurisdiction clause in thepresent case (Article 21.4 of MLA) shall guide the exercise of powerin the Section 11 petition, and the High Court of Andhra Pradeshalone shall be competent court to appoint the sole arbitrator.present case (Article 21.4 of MLA) shall guide the exercise of powerin the Section 11 petition, and the High Court of Andhra Pradeshalone shall be competent court to appoint the sole arbitrator.

14.Before proceeding further it would be appropriate to look into theorder passed by the coordinate bench of this court which isreproduced herein as under:order passed by the coordinate bench of this court which isreproduced herein as under:

“ 1. This hearing has been done through hybrid mode.

2. This is petition under Section 11(6) of the Arbitrationand Conciliation Act, 1996 (hereinafter, ‘the Act’)seeking appointment of an independent Arbitrator. Thebackground of the petition is that the Petitioner wasawarded with Master License Agreement (hereinafter,‘MLA’) for on board catering services in Kalka ShatabdiExpress for period of five years from 3rd February,2014 to 2nd February, 2019. The license fee forproviding the catering service was Rs.16.15 crores.Thereafter, the zonal railway delegated its power toIndian Railway Catering and Tourism Corporation(hereinafter, ‘IRCTC’) - Respondent no. 2 to manage andsupervise the services rendered by the licensee Petitionerand Conciliation Act, 1996 (hereinafter, ‘the Act’)seeking appointment of an independent Arbitrator. Thebackground of the petition is that the Petitioner wasawarded with Master License Agreement (hereinafter,‘MLA’) for on board catering services in Kalka ShatabdiExpress for period of five years from 3rd February,2014 to 2nd February, 2019. The license fee forproviding the catering service was Rs.16.15 crores.Thereafter, the zonal railway delegated its power toIndian Railway Catering and Tourism Corporation(hereinafter, ‘IRCTC’) - Respondent no. 2 to manage andsupervise the services rendered by the licensee Petitioner

and to this effect, Tripartite Agreement got executedamongst Chief Commercial Manager Northern Railway.

3. The case of the Petitioner is that there was furtherrenewal clause, dated 12th December, 2019, and inaccordance with the MLA, the License Fees was revisedwithanadditional10percentamountingtoRs.20,96,55,550/-. It is stated that the license terms wererevised again after the renewal retroactively.

4. Thereafter, disputes arose in respect of the renewaland license fee that was to be paid. notice forappointment of Arbitrator was issued on 19th September,2023 in terms of the Tripartite agreement dated 26th July,2017.

5. The matter was listed on 8th February, 2024. Noticewas issued to the Union of India and the IRCTC. Mr.Harshit Agarwal, ld. Counsel appears for the IRCTC andMr. Vineet Dhanda, ld. Counsel along with Mr. KushagraKumar, ld. Counsel appears for the Union of India.

6. On behalf of IRCTC, it is submitted that the initialMLA was executed on 16th May, 2014 contained ajurisdictionclauseasalsoanarbitration/disputeresolution clause. Thereafter, the Tripartite Agreementexecutedon26thJuly,2017containedafurtherarbitration clause. While the arbitration clause in theTripartiteAgreementissilentwithregardtothejurisdiction, the MLA mentions “Zonal Railway HQ” tobe having exclusive jurisdiction for dispute resolution inall matters arising out of the MLA.

Further, it is also submitted by ld. Counsel forIRCTC that invocation of arbitration was only in respectof IRCTC and not the Union of India.

7. Mr. Rao, ld. Counsel for the Petitioner pointed out thatthe IRCTC’s Zonal HQ is located in Delhi and theTripartite Agreement had substituted the MLA.

8. The Court has considered the matter. The clauses inthe MLA is as under:

“21.4 Jurisdiction

This Agreement will be governed by and construed inaccordance with the laws of the Republic of India and theCourts at [*] (Zonal Railway HQ) shall have exclusivejurisdiction in all matters relating to this Agreement.

xxx xxx xxx

21.8 Notice

All notices under this Agreement by either party will be inwriting and will be deemed to have been duly given ifdelivered by courier/registered AD Post. All noticesunder this Agreement are to be addressed as under:

In the case of Railway:Chief Commercial Manager,Northern RailwayHeadquarter office, Baroda House,New Delhi-110001.

In the case of Licensee:

Mr. Parth SinghM/s. Ambuj Hotel & Real Estate (P) Ltd.D.58/9-A, Sigra, Varanasi.221010

Any change in the aforesaid address of either party shallbe immediately informed to the other party by way of anotice as aforesaid.”

The clauses in the Tripartite Agreement for disputeresolution is as under:

“8.9 In case of any dispute the matter shall be referredfor Arbitration to Sole Arbitrator to be appointed as per

Arbitration & Conciliation Act, 1966 as amended fromtime to time.”

9. perusal of the above would show that this CourtwouldhavejurisdictiontoappointtheArbitratorconsidering that the IRCTC itself is based in Delhi, theZonal Headquarters is in Delhi and Courts in Delhi alsohave jurisdiction.

10. Accordingly, Justice Dinesh Kumar Singh (Retd.), (M:[REDACTED]) is appointed as the sole Arbitrator toadjudicate upon the disputes between the parties. Thearbitration shall take place under the aegis of DelhiInternational Arbitration Centre (hereinafter, ‘DIAC’).The fee of the ld. Sole Arbitrator shall be paid in terms ofthe Fourth Schedule of the Act as amended by DIACRules, 2023. Let copy of the present order be emailed toSecretary,[REDACTED].

11. The petition is disposed of. All pending applicationsare accordingly disposed of.”

15.This court finds no reason to dissent from the findings of theco-ordinate bench of this court. Perusal of the clause in the MLA andtripartite agreement indicated that this court would have thejurisdiction to appoint the arbitrator considering that the IRCTC itselfis based in Delhi, the Zonal Headquarters is in Delhi and Courts inDelhi also have jurisdiction. This court finds no reason to differ fromthe decision of the coordinate bench.co-ordinate bench of this court. Perusal of the clause in the MLA andtripartite agreement indicated that this court would have thejurisdiction to appoint the arbitrator considering that the IRCTC itselfis based in Delhi, the Zonal Headquarters is in Delhi and Courts inDelhi also have jurisdiction. This court finds no reason to differ fromthe decision of the coordinate bench.

16.In view of the above, the present petitions are disposed of withfollowing directions:following directions:

a. Justice Dinesh Kumar Singh (Retd), (Mobile: [REDACTED]), isappointed as sole arbitrator to adjudicate upon the disputes inbetween parties.appointed as sole arbitrator to adjudicate upon the disputes inbetween parties.

b. The arbitration will be held under the aegis of the Delhi InternationalArbitration Centre, Delhi High Court, Sher Shah Road, New Delhihereinafter, referred to as the ‘DIAC’) or as agreed, between theparties. The remuneration of the learned Arbitrator shall be in terms offee Schedule of DIAC or as the parties may agree.Arbitration Centre, Delhi High Court, Sher Shah Road, New Delhihereinafter, referred to as the ‘DIAC’) or as agreed, between theparties. The remuneration of the learned Arbitrator shall be in terms offee Schedule of DIAC or as the parties may agree.

c. The learned Arbitrator is requested to furnish declaration in terms ofSection 12 of the Act prior to entering the reference.Section 12 of the Act prior to entering the reference.

d. It is made clear that all the rights and contentions of the parties,including as to the arbitrability of any of the claim, any otherpreliminary objection, as well as claims on merits of the dispute ofeither of the parties, are left open for adjudication by the learnedarbitrator.including as to the arbitrability of any of the claim, any otherpreliminary objection, as well as claims on merits of the dispute ofeither of the parties, are left open for adjudication by the learnedarbitrator.

e. The parties shall approach the learned arbitrator within two weeksfrom today.from today.

MAY 16, 2024Pallavi

DINESH KUMAR SHARMA, J