MANU/SC/0285/2021

True Court CopyTM English

IN THE SUPREME COURT OF INDIA

Civil Appeal No. 1556 of 2021 (Arising out of SLP (C) No. 29161 of 2019)

Decided On: 13.04.2021

Appellants: Inox Renewables Ltd.
Vs.
Respondent: Jayesh Electricals Ltd.

Hon'ble Judges/Coram:
Rohinton Fali Nariman and Hrishikesh Roy

JUDGMENT

Rohinton Fali Nariman, J.

1. Leave granted.

2. The present appeal arises out of the impugned judgment dated 9th October, 2019 passed by the High Court of Gujarat at Ahmedabad in which Special Civil Application No. 9536 of 2019 filed by the Appellant, Inox Renewables Ltd. ["Appellant"] against the order dated 25th April, 2019 passed by the Commercial Court, Ahmedabad was dismissed, holding that the courts at Jaipur, Rajasthan would be the courts in which the Section 34 petition could be filed.

3. The facts of the case are as follows:

A purchase order dated 28th January, 2012 was entered into between M/s. Gujarat Fluorochemicals Ltd. ["GFL"] and the Respondent herein, Jayesh Electricals Ltd. ["Respondent"] for the manufacture and supply of power transformers at wind farms. The arbitration Clause is contained in Clause 8.5 of the purchase order which reads as follows:

8.5 All the dispute[s] and differences if any shall be settled by arbitration in the manner hereinafter provided.

Arbitration shall be conducted by three arbitrators; one each to be nominated by you and the owner and third to be appointed as an umpire by both the [arbitrators] in accordance to the Arbitration and Conciliation Act, 1996. In case either party fails to appoint an arbitrator within sixty days after receipt of notice from the other party invoking the arbitration clause, the arbitrator appointed by the party invoking the arbitration Clause shall become the sole arbitrator to conduct the arbitration.

The venue of the arbitration shall be Jaipur.

The decisions of the majority of the arbitrators shall be final and binding on both the parties. The arbitrators may from time to time with the consent of all the parties: extend the time for making the award. In the event of any of the arbitrators dying, neglecting, resigning or being unable to act for any reason, it shall be lawfully binding for the party concerned to nominate another arbitrator in place to the outgoing arbitrator.

The arbitrator shall have full powers to review and/or revise any decision, opinion, direction, certification or valuation in accordance with the agreement and neither party shall be limited in proceedings before such arbitration to the evidence or arguments for the purpose of obtaining the said decision.

During settlement of disputes and arbitration proceedings, both parties shall be obliged to carry out their respective obligations under the agreement.

In the event of arbitrators' award being not acceptable to either party, the parties shall be free to seek lawful remedies under the law of India and the jurisdiction for the same shall be courts in the State of Rajasthan.

4. A slump sale of the entire business of GFL took place in favour of the Appellant. This took place by way of a business transfer agreement dated 30th March, 2012 executed between the Appellant and GFL to which the Respondent was not a party. Clause 9.11 and 9.12 of this business transfer agreement designated Vadodara as the seat of the arbitration between the parties, vesting the courts at Vadodara with exclusive jurisdiction qua disputes arising out of the agreement.

5. On an application being filed by the Respondent on 5th September, 2014, Under Section