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Sunday, April 12, 2015

The attempt of the petitioner to bring in the provision for arbitration contained in the "solutions programme" as a part of the terms of her employment with the respondent No.2 remains wholly unsubstantiated. Not only the employment contract signed by the petitioner does not contain any specific clause of arbitration or makes the provision for arbitration contained in the "solutions programme" applicable to her employment, the clause providing for exclusive jurisdiction of the courts in Bombay specifically negate the claim of the existence of an arbitration clause in the contract of employment of the petitioner. There is no specific incorporation of the provisions for arbitration contained in the "solutions programme" to the case of the petitioner by any other communication though a bald assertion to the said effect has been made by the petitioner in her pleadings which has remained unsubstantiated. Even on a hypothetical application of the "solutions programme" the provisions contained therein with regard to conduct of arbitration proceedings in terms with the Federal Arbitration Act and the National Rules for resolution of employment disputes of the American Arbitration Association would specifically exclude the provisions of Part I including Section 11(6) of the 1996 Act on the strength of the decisions of this Court in Bhatia International Vs. Bulk Trading S.A. & Anr.[1] followed in Videocon Industries Limited Vs. Union of India & Anr.[2] and Yograj Infrastructure Limited Vs. Ssang Yong Engineering and Construction Company Limited[3] which would be applicable to the issue having regard to the point of time when the question had arisen. Besides, under Section 7 of the 1996 Act the parties to an arbitration agreement must agree to submit their disputes to arbitration. What is contemplated under the "solutions programme" is a mere possibility of the employee seeking arbitration as opposed to an obligation to refer all disputes to arbitration. Also as held by this Court in K.K. Modi Vs. K.N. Modi & Ors.[4] an integral element of Section 7 of the 1996 Act is the agreement of the parties to be bound by the decision of the arbitrator. The same is not to be found in the "solutions programme" which leaves the employee with an option to accept or reject the decision of the arbitrator. For the aforesaid reasons, we are of the view that the petitioner is not entitled to invoke this Court's jurisdiction under Section 11(6) of the 1996 Act. In view of the aforesaid conclusion, it will not be necessary for this Court to go into certain other issues that have been raised by the contesting parties, namely, whether the petitioner's claim is time barred and whether the same has been instituted with oblique/collateral motives.

                                                              NON-REPORTABLE


                        IN THE SUPREME COURT OF INDIA

                         CIVIL ORIGINAL JURISDICTION

                  ARBITRATION PETITION (CIVIL) NO.3 OF 2008


PAYAL CHAWLA SINGH                           ...PETITIONER (S)
                             VERSUS

THE COCA-COLA CO. & ANR.                ...RESPONDENT (S)


                                  JUDGMENT

The  petitioner  is  a  former  employee  of  Coca-Cola  India,  Inc.,   the
respondent No.2 herein.   At the time of joining the respondent  company  an
agreement dated 20.09.1995 was entered into between the petitioner  and  the
respondent No.2, relevant features of which will be noticed in  due  course.
It  appears  that  while  in  employment  in  the  respondent  company,  the
petitioner had complained of gender discrimination and harassment  primarily
on account of the service conditions relating to pay  and  emoluments.   The
complaint of the petitioner was sought to be  redressed  by  the  respondent
company by appointing an independent  investigator  and  thereafter  through
mediation proceedings which did not yield  any  result.   With  effect  from
28.07.2004, the petitioner's resignation  from  service  in  the  respondent
No.2 company became effective and payment in full and  final  settlement  of
her claims had also been tendered and received by the petitioner.

 It appears that on 05.12.2006 the petitioner issued a legal notice  to  the
respondents  invoking  the  arbitration  mechanism  under   the   "solutions
programme"  and  claiming  compensation  against   harassment   and   gender
discrimination that she claimed to have suffered during the  course  of  her
employment and even after her resignation.  While it will not  be  necessary
to go into the detailed facts and circumstances in which the  grievances  of
the petitioner came to be resurrected  after  her  resignation,  suffice  it
will be to notice that an SMS message  received  around  this  time  by  the
petitioner from one Mr. Adil Malia, Vice-President, Human Resources  of  the
respondent  No.2  company,  apparently,  had  triggered  off  the  aforesaid
response of  the  petitioner.   The  demand  for  arbitration  made  by  the
petitioner was refused by the respondent on the ground that  the  "solutions
programme" was not applicable to the petitioner and the same was meant  only
for employees of the first respondent  in  the  United  States  of  America.
This has led to the filing of the instant application  under  Section  11(6)
of the Arbitration and Conciliation Act, 1996 (for  short  the  "1996  Act")
resulting in the proceedings in question.

It will be necessary, at this stage, to take note  of  the  details  of  the
"solutions programme" in terms of which the petitioner claims the  mechanism
for  arbitration  contained  therein  to  be  a  part  of  the  contract  of
employment between her and the respondents.

Some time in the year 1999  four  African-Americans  who  were  current  and
former employees of the first  respondent  had  filed  a  complaint  seeking
declaratory, injunctive and other equitable  reliefs  and  compensatory  and
punitive damages on account of alleged/claimed infringement and  deprivation
of rights of the aforesaid persons by the respondent No.1.   On  16.11.2000,
a settlement was arrived at between the aforesaid  employees  of  the  first
respondent and the company.  The  said  settlement  formed  a  part  of  the
consent  decree  dated  07.06.2001  of  an  United  States  District   Court
(Georgia).  The aforesaid decree, inter alia, provided for  constitution  of
a task force to  continuously  evaluate  the  human  resource  policies  and
practices of the first respondent and also to consider whether  implementing
an arbitration procedure would be appropriate.   The  task  force  submitted
its report from time to time and it was in the 3rd annual  report  submitted
on 01.12.2004 that of the various problem resolution methods, the  following
were also incorporated:-
"4)   Mediation- this involves a neutral third  party  outside  the  Company
and  is  available  only  for  resolution  of  legal   disputes,   such   as
discrimination or harassment.

5)    Arbitration - If mediation fails to resolve the legal dispute  to  the
employee's satisfaction,  arbitration  is  available.   This  requires  both
parties to explain their sides to a trained arbitrator, usually an  attorney
or judge."

This, in essence is the "solutions programme" on which  the  petitioner  has
based her claim.  According to the petitioner the "solutions  programme"  is
applicable to all employees of Coca Cola Company, Inc. and its  subsidiaries
including Cola Cola India (Respondent No.2).  The petitioner  has  contended
that even  admitting  that  the  arbitration  provision  in  the  "solutions
programme" applies only to employees based in the United  States,  the  same
has  been  expressly  invoked  in  the  case  of  the   petitioner   through
correspondence, e-mails etc.  The  petitioner  relies  on  an  e-mail  dated
25.09.2002 issued by Coca  Cola  Company  informing  its  employees  of  the
change in policy and the extension  of  the  "solutions  programme"  to  all
employees world wide.  The petitioner also relies  on  a  blank  memo  dated
20.12.2002 with an intake form sent to  the  petitioner  for  accessing  the
conflict  resolution  mechanism  to  resolve  harassment  issues.   As   the
respondents had refused to  comply  with  the  demand  notice  sent  by  the
petitioner for appointment of an arbitrator, the instant petition  has  been
filed under the provisions of 1996 Act.

In reply, the respondent contend that the employment agreement  between  the
petitioner and the respondent No.2 dated 20.09.1995  does  not  contain  any
arbitration  clause.   According  to   the   respondents,   the   "solutions
programme" is not applicable to employees of subsidiaries of the  respondent
No.1 outside the United States of America and the same in fact applies  only
to  the  United  States  based  employees  of  the  first  respondent.   The
provisions for arbitration contained in the "solutions  programme"  are  not
incorporated in the petitioner's employment agreement dated 20.09.1995.   It
is further contended that by an amendment  of  the  petitioner's  employment
agreement made on 05.07.1996 a  provision  was  inserted  to  the  following
effect:-

"In case of any dispute the jurisdiction to entertain and try  such  dispute
shall vest exclusively in a court in Bombay".

The respondents  have  further  contended  that  the  "solutions  programme"
contemplated arbitration in the United States of America under  the  Federal
Arbitration Act and incorporates the National Rules for  the  resolution  of
employment  disputes  of  the  American   Arbitration   Association   (AAA).
Therefore, according to the respondents, even assuming that  the  "solutions
programme" is applicable to the petitioner, the specific  reference  to  the
Federal Arbitration Act in the "solutions programme" and  the  applicability
of the  procedure  visualized  by  the  National  Rules  for  resolution  of
employment  disputes  of  the   American   Arbitration   Association   would
specifically exclude the applicability of Part I of the 1996  Act.   On  the
aforesaid basis, it is submitted, that the present application  filed  under
Section 11(6) of the 1996 Act will not be  maintainable.   Furthermore,  the
respondents contend that the  "solutions  programme"  does  not  contemplate
mandatory  recourse  to  arbitration  under  the  1996   Act.    It   merely
contemplates a possibility of the employees seeking arbitration  as  opposed
to an obligation to refer all disputes arising to  arbitration  inasmuch  as
under the "solutions programme" it is also open to an employee  to  approach
the Court instead of invoking arbitration.  It  is  further  submitted  that
the mandatory requirement under Section 7 of the 1996 Act  obliging  parties
to abide by the decision of the Arbitral Tribunal  is  departed  from  under
the "solutions programme" wherein an employee has a  choice  to  accept  the
arbitrator's decision and the legal dispute  or  reject  such  decision  and
pursue other legal options.


Having heard the petitioner-in-person and Shri Amit  Sibal,  learned  senior
counsel appearing for the respondents, this Court  unhesitatingly  comes  to
the conclusion that there is no binding arbitration  agreement  between  the
petitioner and her employer so as to  enable  this  Court  to  exercise  its
jurisdiction under Section 11(6) of  the  1996  Act.   The  attempt  of  the
petitioner to bring in  the  provision  for  arbitration  contained  in  the
"solutions programme" as a part of the terms  of  her  employment  with  the
respondent No.2 remains wholly unsubstantiated.   Not  only  the  employment
contract signed by the petitioner does not contain any  specific  clause  of
arbitration  or  makes  the  provision  for  arbitration  contained  in  the
"solutions programme" applicable to her  employment,  the  clause  providing
for exclusive jurisdiction of the courts in Bombay specifically  negate  the
claim of  the  existence  of  an  arbitration  clause  in  the  contract  of
employment of the petitioner.  There is no  specific  incorporation  of  the
provisions for arbitration contained in the  "solutions  programme"  to  the
case of the petitioner by any other communication though  a  bald  assertion
to the said effect has been made by the petitioner in  her  pleadings  which
has remained unsubstantiated.  Even on a  hypothetical  application  of  the
"solutions programme"  the  provisions  contained  therein  with  regard  to
conduct of arbitration proceedings in terms  with  the  Federal  Arbitration
Act and the National Rules for resolution  of  employment  disputes  of  the
American Arbitration Association would specifically exclude  the  provisions
of Part I including Section 11(6) of the 1996 Act on  the  strength  of  the
decisions of this Court in Bhatia International  Vs.  Bulk  Trading  S.A.  &
Anr.[1]  followed in Videocon  Industries  Limited  Vs.  Union  of  India  &
Anr.[2] and Yograj Infrastructure Limited Vs.  Ssang  Yong  Engineering  and
Construction Company Limited[3] which  would  be  applicable  to  the  issue
having regard to the point of time when the question  had  arisen.  Besides,
under Section 7 of the 1996 Act the  parties  to  an  arbitration  agreement
must agree to submit their disputes to  arbitration.  What  is  contemplated
under the "solutions programme"  is  a  mere  possibility  of  the  employee
seeking arbitration as opposed to an obligation to  refer  all  disputes  to
arbitration.  Also as held by this Court  in  K.K.  Modi  Vs.  K.N.  Modi  &
Ors.[4]  an integral element of Section 7 of the 1996 Act is  the  agreement
of the parties to be bound by the decision of the arbitrator.  The  same  is
not to be found in the "solutions programme" which leaves the employee  with
an option to accept or reject the decision of the arbitrator.

For the aforesaid reasons, we are of the view that  the  petitioner  is  not
entitled to invoke this Court's jurisdiction  under  Section  11(6)  of  the
1996 Act.  In view of the aforesaid conclusion, it  will  not  be  necessary
for this Court to go into certain other issues that have been raised by  the
contesting parties, namely, whether the petitioner's claim  is  time  barred
and whether the same has been instituted with oblique/collateral motives.

In  view  of  the  foregoing  discussions,  the  application  filed  by  the
petitioner has to fail.  It  is  accordingly  dismissed.   However,  in  the
facts and circumstances of the case there will be  no  order  as  to  costs.


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

NEW DELHI
APRIL 10, 2015
-----------------------
[1]    (2002) 4 SCC 105
[2]    (2011) 6 SCC 161
[3]    (2011) 9 SCC 735\
[4]    (1998) 3 SCC 573

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