SC dismisses Antrix arbitration proceedings against Devas


The Supreme Court on Friday dismissed an application filed by Antrix Corporation — engaged in marketing and sale of products and services of the Indian Space Research Organisation — seeking proceedings under the Arbitration Act against Devas Multimedia P. Ltd. for termination of a 2005 agreement for lease of space segment capacity on ISRO/Antrix S-Band Spacecraft.

Article 19 of the agreement empowered Antrix to terminate the accord in certain contingencies. It also provided that the agreement and the rights and responsibilities of the parties thereunder would be subject to and construed in accordance with the laws of India

Now the question is: When one of the parties invoked the jurisdiction of the International Chamber of Commerce and an arbitrator was appointed pursuant thereto, would the other party to the dispute be entitled to proceed in terms of Section 11(6) of the 1996 Arbitration Act?

A Bench of Chief Justice Altamas Kabir and Justice S.S. Nijjar, dismissing the application, said: “Devas has invoked the provisions of Article 20 of the Agreement and approached the ICC for appointment of an Arbitral Tribunal in accordance with the rules of arbitration and, pursuant thereto, appointed its nominee arbitrator.

On the other hand, the petitioner appointed its nominee arbitrator with the caveat that the arbitration would be governed by the 1996 Act, and called upon Devas to appoint its nominee arbitrator under the said provisions. Devas did not respond to the petitioner's letter dated July 30, 2011.

Writing the order, the CJI said “The Arbitration Agreement provides that the proceedings be held in accordance with the rules and procedures of the International Chamber of Commerce or UNCITRAL. Rightly or wrongly, Devas made a request for arbitration to the ICC International Court of Arbitration on June 29, 2011, in accordance with the aforesaid Agreement and Mr. V.V. Veedar was appointed its nominee arbitrator…”

Once the Arbitration Agreement had been invoked by Devas and a nominee arbitrator was also appointed by it, the Agreement could not be invoked for a second time by Antrix, which was fully aware of the appointment made by Devas. The Bench said: “The law is well settled that where an arbitrator had already been appointed and intimation thereof conveyed to the other party, a separate application for appointment of an arbitrator is not maintainable.

Once the power has been exercised under the Arbitration Agreement, there is no power left to, once again, refer the same disputes to arbitration under Section 11 of the 1996 Act, unless the order closing the proceedings is subsequently set aside.” Once the provisions of the ICC Rules of Arbitration had been invoked by Devas, the proceedings initiated thereunder could not be interfered with in a proceeding under Section 11 of the 1996 Act.”

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Printable version | Jul 21, 2017 2:57:35 PM |