High Court of Jammu and Kashmir

Siemens Ltd. and Ors. Vs. SKIMS

MANU/JK/0419/2018

04.06.2018

Arbitration

Averments set up by applicants are expected to be specifically denied by replying party, if there is no specific denial, then such an averment is deemed to have been admitted by the otherside

The Applicants have filed instant applications before present Court for the appointment of a sole Arbitrator under Section 11(6) of the J & K Arbitration and Conciliation Act, 1997/Act, pursuant to the 'Arbitration Clause' between the parties contained in the 'Contract Agreement'-Supply Order No. SIMS 324 13 2006 (Eq)-1690-94 dated 20th of July, 2006, issued by the Respondent to the applicants for the supply/installation/testing/commissioning and handing over of a High Frequency Digital X-Ray with Image Intensifier (the X-Ray Machine). It is submitted that, the three disputes contain similar facts and, therefore, same may be consolidated and adjudicated by the same Arbitrator.

The Respondent-SKIMS, despite availing umpteen opportunities, have failed to file the objections, meaning thereby, that they have not joined any issue with the applicants. It is a settled principle of the law of pleadings that the averments set up by the applicants are expected to be specifically denied by the replying party. If there is no specific denial, then such an averment is deemed to have been admitted by the other side. In the present case, it is evident that, the averments set up in the applications, which were relevant and material to the case, have not been rebutted by the Respondent-SKIMS. It was expected of the Respondent-SKIMS to reply all the averments specifically and make a proper reference to the records relevant to the case. Since, the Respondent-SKIMS have omitted to do so and have failed to specifically deny the averments made by the applicants, therefore, the Applicants have been able to make out a case for interference.

From a bare perusal of Section 11, it is manifest that, in terms of Sub-Section (2), parties are free to agree on the procedure for the appointment of an Arbitrator. If only there is any failure of that procedure, the aggrieved party can invoke sub-sections (4), (5) or (6) of Section 11, as the case may be. In the case on hand, in terms of sub-section (2) of Section 11, procedure for appointment of an Arbitrator stands agreed upon by the parties in clause 26 of the 'Contract Agreement'. The parties have agreed that, in the event of disputes arising out of the 'Contract Agreement', then, in such eventuality, the same shall be referred to the award of two Arbitrators, one each to be nominated by either of the parties. It is the specific case of the Applicants that, they issued notice to the Respondent-SKIMS for demanding the appointment of the Arbitrator, but, despite that, the Arbitrator has not been appointed and, therefore, they are entitled to invoke Sub-Section (6) of Section 11 of the Act.

It is a settled principle of law that jurisdiction of Court under Section 11 of the Act is limited and confine to examine as to whether there is an 'Arbitration Agreement' between the contracting parties and, if so, whether any dispute has arisen between them out of such agreement which may call for appointment of Arbitrator to decide such dispute(s). In the present case, the Applicants, in all the three applications, have raised a dispute, which has gone un-rebutted on part of the Respondent-SKIMS. Before availing the remedy of Section 11 of the Act, the applicants, by way of repeated requests before the concerned authorities, made all the efforts that they could have in order to redress their grievances, but all their efforts went in vain. Thereafter, the applicants invoked the 'Arbitration Clause' contained in Clause 26 of the 'Contract Agreement' by way of the notice dated 7th of August, 2015, which, too, did not find any favour with the Respondent-SKIMS and they did not appoint an Arbitrator on their own behalf.

Once it is found that a dispute has arisen between the parties in relation to an agreement which contained an 'Arbitration Clause' for resolving such disputes, then, in such eventuality, reference to the Arbitrator has to be made leaving the parties to approach the Arbitrator with their claim and counterclaim so as to enable the Arbitrator to decide all such disputes on the basis of case set up by the parties before him. Applications filed under Section 11 of the Act are allowed and Justice Hasnain Masoodi, a former judge of this Court, is appointed as the sole Arbitrator to decide the dispute(s), which has/have arisen between the parties in relation to the agreement in question.

Tags : Dispute Settlement Arbitrator Appointment

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