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Wednesday, September 23, 2015

Mere Misdescription in description of parties in agreement and notices can not affect the maintainability of the suit as it can be explained = While it is correct that there is some confusion with regard to the description of the parties in the sub-agreements; the legal notice(s); and the letter(s) of invocation; the L.O.Is. issued in respect of the works and the correspondences exchanged by and between the parties make it clear that the applicant Taiyo Membrane Corporation Pty. Ltd. and Taiyo Membrane Corporation are one and the same entity and the works under the sub- agreements had been allotted by the respondent to the said entity. In this regard it may also be relevant to note that under the Australian Corporation Act, 2001 (Section 57A) a Corporation includes a Company and a proprietary Company Limited by shares is incorporated as Pty. Ltd. 6. In the above circumstances the alleged mis-description will not affect the maintainability of the present application. As already observed, the Court does not find any ambiguity or inconsistency in the description of parties so as to non-suit the applicant-petitioner by dismissing its application on the above basis. The ambiguity, if any, in the description of the parties having been explained and the respondent Company itself having issued L.O.Is. and having exchanged subsequent correspondences with the applicant with regard to the works under the sub- contracts, though executed in the name of the Taiyo Membrane Corporation and Taiyo Membrane Corporation (India), the applicant's petition cannot be held to be not maintainable as urged on behalf of the respondent.

                                                              NON-REPORTABLE


                        IN THE SUPREME COURT OF INDIA

                         CIVIL ORIGINAL JURISDICTION

                    ARBITRATION CASE (CIVIL) NO.2 OF 2015


TAIYO MEMBRANE CORPORATION PTY.
LTD.                                              ...PETITIONER

                            VERSUS

SHAPOORJI PALLONJI & CO.LTD.           ...RESPONDENT



                               J U D G M E N T



1.     This  application  under  Section  11(6)  of  the   Arbitration   and
Conciliation Act, 1996 (hereinafter referred  to  as  “the  Act”)  has  been
lodged by one Taiyo Membrane Corporation Pty. Ltd.  seeking  appointment  of
an arbitrator to resolve certain disputes that have arisen out of three sub-
contracts executed with the respondent  in  respect  of  works  relating  to
renovation of the Jawaharlal Nehru Stadium, New Delhi.  The said works  were
awarded to the respondent by the C.P.W.D.
2.    The area of dispute is small and narrow, namely,  the  entitlement  of
the  petitioner  to  5%  of  his  claimed  dues  which,  according  to   the
petitioner, has been wrongly withheld by the respondent.

3.    The respondent has objected to the appointment  of  an  Arbitrator  by
the Court, inter alia,  on  the  ground  that  the  contractual  obligations
incumbent on the petitioner/applicant have not been fulfilled without  which
the demand for release of the amount, as aforesaid, is  not  justified.   As
the said objection itself raises an  arbitrable  issue  the  same  need  not
engage the attention of the Court.   Such  attention,  however,  has  to  be
focused on the principal objection of the respondent.  The same  is  to  the
effect that the two  of  the  sub-agreements  were  between  Taiyo  Membrane
Corporation  and  the  respondent  Company  whereas  one  sub-agreement  was
between  Taiyo  Membrane  Corporation  (India)  and  the   respondent.   The
applicant is Taiyo Membrane Corporation Pty. Ltd. which is not  a  party  to
any of the said sub-agreements.  Besides, it is  contended  that  invocation
of the arbitration clause was by the applicant who is not  a  party  to  the
agreements.  On the  said  basis,  it  is  urged  that  there  is  no  valid
invocation of the arbitration clause and consequently there  is  no  failure
on the part of the respondent to appoint the arbitrator so as to warrant  an
order from the Court under Section 11(6) of the Act. It is also  urged  that
one of the sub-agreements being  between  two  Indian  entities  i.e.  Taiyo
Membrane Corporation (India) and the respondent Company any  appointment  of
an arbitrator would fall  outside  the  jurisdiction  of  this  Court  under
Section 11(6) of the Act.

4.    The above objections of the respondent have been sought to be  met  by
the petitioner by filing  a  rejoinder  affidavit  to  point  out  that  the
Letters of  Intent  with  regard  to  the  works  allotted  under  the  sub-
agreements were issued in favour of Taiyo  Membrane  Corporation  Pty.  Ltd.
That  apart,  several  correspondences  exchanged  between  the   respondent
Company and the Taiyo Membrane Corporation Pty.  Ltd.  with  regard  to  the
works covered by the sub-contracts have also been  referred  to  and  relied
upon to contend that there is no doubt and  ambiguity  with  regard  to  the
fact that the  Taiyo Membrane  Corporation  Pty.  Ltd.  and  Taiyo  Membrane
Corporation are  one  and  the  same  entity.   Insofar  as  the  agreements
executed by Taiyo Membrane Corporation (India) is  concerned,  it  is  urged
that  the  above  position   has   also   been   clarified   by   subsequent
communications exchanged between the respondent Company and  Taiyo  Membrane
Corporation Pty. Ltd. with respect to the work covered by the  agreement  in
which one of the parties is Taiyo Membrane Corporation (India).

5.    While it is correct that there is some confusion with  regard  to  the
description of the parties in the sub-agreements; the legal  notice(s);  and
the letter(s) of invocation; the L.O.Is. issued in respect of the works  and
the correspondences exchanged by and between the parties make it clear  that
the applicant Taiyo  Membrane  Corporation  Pty.  Ltd.  and  Taiyo  Membrane
Corporation are one and the  same  entity  and  the  works  under  the  sub-
agreements had been allotted by the respondent to the said entity.  In  this
regard  it  may  also  be  relevant  to  note  that  under  the   Australian
Corporation Act, 2001 (Section 57A) a Corporation includes a Company  and  a
proprietary Company Limited by shares is incorporated as Pty. Ltd.

6.    In the  above  circumstances  the  alleged  mis-description  will  not
affect  the  maintainability  of  the  present  application.    As   already
observed, the Court does not find any  ambiguity  or  inconsistency  in  the
description of  parties  so  as  to  non-suit  the  applicant-petitioner  by
dismissing its application on the above basis. The  ambiguity,  if  any,  in
the description of the parties having  been  explained  and  the  respondent
Company  itself  having  issued  L.O.Is.  and  having  exchanged  subsequent
correspondences with the applicant with regard to the works under  the  sub-
contracts, though executed in the name of  the  Taiyo  Membrane  Corporation
and Taiyo Membrane Corporation (India), the applicant's petition  cannot  be
held to be not maintainable as urged on behalf of the respondent.

7.    Having held as aforesaid and the  remaining  objections,  as  noticed,
being within the province of the Arbitrator the Court is inclined  to  grant
the prayers made. Accordingly, Dr. Justice M.K. Sharma, a  former  Judge  of
this Court is appointed as the sole Arbitrator.

8.    All disputes including the disputes raised  in  the  present  petition
are hereby referred to the learned sole Arbitrator.  The learned  Arbitrator
shall be at liberty to fix his own fees/  remuneration/other  conditions  in
consultation with the parties.

9.    Let this order be communicated to the learned Arbitrator so  that  the
arbitration proceedings  can  commence  and  conclude  as  expeditiously  as
possible.

10.   The Arbitration Petition is disposed of in the above terms.


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

NEW DELHI
SEPTEMBER 09, 2015


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