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Document:
Harmonization of Clauses of the Agreement for Resolution of a Dispute Under Arbitration
Facts:
The applicant- Balasore Alloys Limited is a manufacturer of High Carbon Ferro Chrome, who entered into a transaction with the respondent to sell High Carbon Ferro Chrome, in the territory of USA and Canada. Certain disputes have arisen between the parties which are required to be resolved through arbitration.
The applicant, therefore, while seeking for the appointment of an arbitrator to resolve such disputes has sought to rely on Clause 7 in the said 37 purchase orders providing for resolution of disputes through arbitration by the Arbitral Tribunal to be constituted as provided therein. The applicant is before this Court seeking the appointment of an arbitrator since the respondent failed to do so.
However, the respondent contended that the entire transaction is governed under the “Umbrella Agreement” vide Clause 23 thereof provides for resolution of disputes through arbitration in the manner as indicated therein and as such the respondent had already invoked the same by the issue of notice and filed a petition before the ICC and Arbitral Tribunal has been duly constituted, hence applicant seeking appointment of the Arbitral Tribunal in terms of Clause 7 of the purchase order is not Bonafide and the application is liable to be dismissed.
Issue:
The appropriate clause which will operate in providing for arbitration and will be applicable in the factual matrix.
Judgement:
The court referred to the decision rendered in the case of Olympus Superstructures Pvt. Ltd. vs. Meena Vijay Khetan & Ors (1999) 5 SCC 651 where this Court while dealing with the same had harmonised both the clauses and had on reconciliation held that the parties should get the disputes resolved under the main agreement.
In order to arrive at a conclusion the court arbitration clause was invoked and the nature of the dispute that was sought by the parties to be resolved through arbitration.
In that view of the matter, when admittedly the parties had entered into the agreement and there was consensus ad idem to the terms and conditions contained therein which is comprehensive and encompassing all terms of the transaction and such agreement also contains an arbitration clause which is different from the arbitration clause provided in the purchase order.
This is for the limited purpose of supply of the product with more specific details which arises out of Agreement, the arbitration clause contained in Clause23 in the main agreement would govern the parties insofar as the present nature of the dispute that has been raised by them concerning the price and the terms of payment including recovery etc.
In that view, it would not be appropriate for the applicant to invoke Clause 7 of the purchase orders more particularly when the arbitration clause contained in the main Agreement has been invoked and the Arbitral Tribunal has already been appointed. The court dismissed the petition with no order as to costs.
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