We have heard learned counsel for the parties at some
length. The material facts are not in dispute. That a Service
Provider Agreement was executed between the parties is
admitted. That Article 7 of the said agreement provides for
settlement of the dispute in relation to the agreement by way of
arbitration is also not in dispute. That disputes have actually
arisen between the parties in relation to the agreement is also
evident from the averments made in the pleadings. The only
method for determination of such disputes is by way of
arbitration. Whether or not the petitioner has provided the
services envisaged under the agreement and, if so, whether the
said services were adequate and satisfactory are matters that can
be examined only by the Arbitrator. So also the question whether
the claim made by the petitioner is time barred cannot be
examined in the present proceedings and shall have to be left
open to be raised before the Arbitrator. There is, in that view, no
gainsaying that the present petition under Sections 11(5) and
11(12) shall have to be allowed with appropriate directions,
particularly when this Court is concerned primarily with the
question whether an arbitration agreement exists between the
parties and if so whether the disputes falling within the scope of
the agreement have arisen for determination. Our answer to
both these questions being in the affirmative, the petitioner has
made out a case for appointment of an Arbitrator and for
reference of the disputes for adjudication to him/her.
NON-REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL ORIGINAL JURISDICTION
ARBITRATION PETITION (CIVIL) NO.19 OF 2015
M/S. WEXFORD FINANCIAL INC. PANAMA
V
BHARAT HEAVY ELECTRICALS LTD.
Dated:July 13, 2016
1. In this petition under Section 11(5) read with Section 11(12)
of the Arbitration and Conciliation Act, 1996, the petitioner prays
for the appointment of a sole arbitrator for adjudication of
disputes that have arisen between the parties in relation to a
“Service Provider Agreement” executed between them. The facts
in brief are as under:
2. The petitioner-company is registered under the Laws of
Panama with its Registered Office at Microjacket-359003, Roll
1Page 2
64778, Frame 53, Panama and a representative office at C-204,
LGF, Greater Kailash-I, New Delhi-110048. The company, it
appears, is engaged in providing liaison services to companies in
public as well as in private sector within and outside the country
including procurement of contracts from Government agencies for
its clients and providing facilitation of pre and post contractual
obligations and activities agreed upon by the parties. The
company claims a small percentage of the value of the contract
towards its fee for the Agency services rendered to its clients.
3. The petitioner’s case is that M/s. Mass Global Investment
Company incorporated under the Iraqi Law and engaged in power
production for Kurdistan Regional Government is one of its
clients. Its further case is that in January-February 2006, the
petitioner introduced respondent-Bharat Heavy Electricals
Limited, a public sector undertaking engaged in integrated power
equipment plant manufacturing to the said M/s Mass Global
Investment company in connection with a “Turnkey Supply of
Arbeel Power Plant” in the State of Kurdistan. A contract was,
2Page 3
according to the petitioner, signed between M/s Mass Global
Investment Company (“the MGIC” for short) and the respondent
on 6th May, 2006. The petitioner claims that the respondent had
agreed to pay 1.1% of the contract value as agency fee for the
services rendered by the petitioner in connection with the said
Arbeel project for the respondent. The project could not,
however, materialize for no fault of the petitioner. That did not
deter the petitioner from using its good offices to procure another
project by the name “Sulaymaniah Gas Power Project”. A
Memorandum of Agreement was signed between the petitioner’s
client and the respondent- Corporation on 20th January, 2007 for
execution of the said project which was followed by signing of a
Turnkey contract on 4th March, 2007. The original contract value
of the project aforementioned was US $ 117,000,000 which was
later increased to US $ 118,181,750. The petitioner asserts that
as in the case of Arbeel project, the respondent had agreed to
pay 1.1% of the contract value towards agency fee to the
3Page 4
petitioner without the requirement of providing any further
service.
4. The petitioner asserts that work of the execution of the
project aforementioned started and was undertaken with the
participation of the petitioner, in the course of which the
petitioner claims to have rendered various services to the
respondent for facilitating execution of the project including
logistic support at Amman/Jordon. The petitioner submits that
the Service Provider Agreement in respect of Sulaymaniah Gas
Power Project was executed between the petitioner, on the one
hand, and the respondent, on the other, on 11th May, 2010
providing for pre-contractual and post-contractual activities and
for payment of a fee equivalent to 1.1% of the total contractual
value within thirty days from the receipt of the payment of the
respondent-BHEL. The petitioner alleges that progressive
payments were received by the respondent from the company but
no payment towards agency fee was realized in favour of the
petitioner. After several reminders and persuasion, the
4Page 5
respondent-BHEL is said to have disbursed a sum of US $
3,60,282 only to the petitioner on 22nd June, 2010 for the
services so rendered. The petitioner claims the balance sum of
US $ 9,39,718 towards agency fee after adjustment of the
amount of US $ 3,60,282 towards the payment already received
by it. The petitioner submits that the respondent has not
responded to several e-mails sent by the petitioner seeking
payment of the balance amount and that by a final
communication date 21st December, 2011 the respondent has
declined to make the payment of the balance on the ground that
the claim of the petitioner is baseless, unfounded and untenable.
The petitioner, in the above backdrop, asserts that disputes have
arisen between the parties in relation to the Service Provider
Agreement executed between them, Clause 7, whereof provides
for adjudication of the same by way of Arbitration. Clause 7
reads as under :
“Article 7 – Arbitration
7.1 Any and all disputes arising between the
PARTIES in connection with the performance and/or
5Page 6
interpretation of this Agreement shall be settled in an
amicable manner. In case the parties fail to arrive at
a settlement within Sixty (60) days of the matter
being referred by the aggrieved PARTY to the other,
such disputes shall be finally settled in accordance
with the provisions of Indian Arbitration and
Conciliation Act, 1996 and rules framed there under
7.2 The Arbitrator (s) appointed shall have its seat
in New Delhi and the arbitration proceedings shall be
in English. The Arbitrator (s) shall record reasons for
the award. Courts at New Delhi shall have exclusive
jurisdiction relating to adjudication of any dispute
which may arise between the PARTIES hereto.”
5. The petitioner has, in the light of the above, approached this
Court for appointment of an arbitrator and for reference of the
disputes for adjudication to him.
6. The respondent-company has in its reply opposed the grant
of any relief to the petitioner inter alia on the ground that the
notice for arbitration served upon the respondent is not a proper
one and that the claim made by the petitioner is barred by
limitation. The respondent’s further case is that the main service
which the petitioner was obliged to provide under the Service
Provider Agreement was to ensure that there was an amicable
settlement of the disputes between the respondent and the client
and that the bank guarantee provided by the respondent for US $
15.7 million to MGIC was returned to it. The petitioner having
failed to fulfill that obligation under the agreement was not
entitled to claim any amount from the respondent.
7. We have heard learned counsel for the parties at some
length. The material facts are not in dispute. That a Service
Provider Agreement was executed between the parties is
admitted. That Article 7 of the said agreement provides for
settlement of the dispute in relation to the agreement by way of
arbitration is also not in dispute. That disputes have actually
arisen between the parties in relation to the agreement is also
evident from the averments made in the pleadings. The only
method for determination of such disputes is by way of
arbitration. Whether or not the petitioner has provided the
services envisaged under the agreement and, if so, whether the
said services were adequate and satisfactory are matters that can
be examined only by the Arbitrator. So also the question whether
the claim made by the petitioner is time barred cannot be
examined in the present proceedings and shall have to be left
open to be raised before the Arbitrator. There is, in that view, no
gainsaying that the present petition under Sections 11(5) and
11(12) shall have to be allowed with appropriate directions,
particularly when this Court is concerned primarily with the
question whether an arbitration agreement exists between the
parties and if so whether the disputes falling within the scope of
the agreement have arisen for determination. Our answer to
both these questions being in the affirmative, the petitioner has
made out a case for appointment of an Arbitrator and for
reference of the disputes for adjudication to him/her.
8. In the result, we allow this petition, and appoint Ms. Justice
Rekha Sharma, former Judge of the High Court of Delhi as a Sole
Arbitrator for adjudication of the disputes that have arisen
between the parties in relation to the Service Provider Agreement
executed between them. We leave it open for the parties to
make their claims and counter claims in relation to the agreement
afore-mentioned before the Arbitrator. All contentions otherwise
open to the parties on facts and in law shall be open to be urged
before the Arbitrator. The petition, is accordingly, allowed with the
above directions leaving the parties to bear their own costs.
9. Parties are directed to appear before the Arbitrator on 22nd
August, 2016.
.…………….……………….CJI.
[T.S. Thakur]
..…………………….………….J.
[R. Banumathi]
...………………..…….……….J.
[Uday Umesh Lalit]
New Delhi;
July 13, 2016
Print Page
length. The material facts are not in dispute. That a Service
Provider Agreement was executed between the parties is
admitted. That Article 7 of the said agreement provides for
settlement of the dispute in relation to the agreement by way of
arbitration is also not in dispute. That disputes have actually
arisen between the parties in relation to the agreement is also
evident from the averments made in the pleadings. The only
method for determination of such disputes is by way of
arbitration. Whether or not the petitioner has provided the
services envisaged under the agreement and, if so, whether the
said services were adequate and satisfactory are matters that can
be examined only by the Arbitrator. So also the question whether
the claim made by the petitioner is time barred cannot be
examined in the present proceedings and shall have to be left
open to be raised before the Arbitrator. There is, in that view, no
gainsaying that the present petition under Sections 11(5) and
11(12) shall have to be allowed with appropriate directions,
particularly when this Court is concerned primarily with the
question whether an arbitration agreement exists between the
parties and if so whether the disputes falling within the scope of
the agreement have arisen for determination. Our answer to
both these questions being in the affirmative, the petitioner has
made out a case for appointment of an Arbitrator and for
reference of the disputes for adjudication to him/her.
NON-REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL ORIGINAL JURISDICTION
ARBITRATION PETITION (CIVIL) NO.19 OF 2015
M/S. WEXFORD FINANCIAL INC. PANAMA
V
BHARAT HEAVY ELECTRICALS LTD.
Dated:July 13, 2016
1. In this petition under Section 11(5) read with Section 11(12)
of the Arbitration and Conciliation Act, 1996, the petitioner prays
for the appointment of a sole arbitrator for adjudication of
disputes that have arisen between the parties in relation to a
“Service Provider Agreement” executed between them. The facts
in brief are as under:
2. The petitioner-company is registered under the Laws of
Panama with its Registered Office at Microjacket-359003, Roll
1Page 2
64778, Frame 53, Panama and a representative office at C-204,
LGF, Greater Kailash-I, New Delhi-110048. The company, it
appears, is engaged in providing liaison services to companies in
public as well as in private sector within and outside the country
including procurement of contracts from Government agencies for
its clients and providing facilitation of pre and post contractual
obligations and activities agreed upon by the parties. The
company claims a small percentage of the value of the contract
towards its fee for the Agency services rendered to its clients.
3. The petitioner’s case is that M/s. Mass Global Investment
Company incorporated under the Iraqi Law and engaged in power
production for Kurdistan Regional Government is one of its
clients. Its further case is that in January-February 2006, the
petitioner introduced respondent-Bharat Heavy Electricals
Limited, a public sector undertaking engaged in integrated power
equipment plant manufacturing to the said M/s Mass Global
Investment company in connection with a “Turnkey Supply of
Arbeel Power Plant” in the State of Kurdistan. A contract was,
2Page 3
according to the petitioner, signed between M/s Mass Global
Investment Company (“the MGIC” for short) and the respondent
on 6th May, 2006. The petitioner claims that the respondent had
agreed to pay 1.1% of the contract value as agency fee for the
services rendered by the petitioner in connection with the said
Arbeel project for the respondent. The project could not,
however, materialize for no fault of the petitioner. That did not
deter the petitioner from using its good offices to procure another
project by the name “Sulaymaniah Gas Power Project”. A
Memorandum of Agreement was signed between the petitioner’s
client and the respondent- Corporation on 20th January, 2007 for
execution of the said project which was followed by signing of a
Turnkey contract on 4th March, 2007. The original contract value
of the project aforementioned was US $ 117,000,000 which was
later increased to US $ 118,181,750. The petitioner asserts that
as in the case of Arbeel project, the respondent had agreed to
pay 1.1% of the contract value towards agency fee to the
3Page 4
petitioner without the requirement of providing any further
service.
4. The petitioner asserts that work of the execution of the
project aforementioned started and was undertaken with the
participation of the petitioner, in the course of which the
petitioner claims to have rendered various services to the
respondent for facilitating execution of the project including
logistic support at Amman/Jordon. The petitioner submits that
the Service Provider Agreement in respect of Sulaymaniah Gas
Power Project was executed between the petitioner, on the one
hand, and the respondent, on the other, on 11th May, 2010
providing for pre-contractual and post-contractual activities and
for payment of a fee equivalent to 1.1% of the total contractual
value within thirty days from the receipt of the payment of the
respondent-BHEL. The petitioner alleges that progressive
payments were received by the respondent from the company but
no payment towards agency fee was realized in favour of the
petitioner. After several reminders and persuasion, the
4Page 5
respondent-BHEL is said to have disbursed a sum of US $
3,60,282 only to the petitioner on 22nd June, 2010 for the
services so rendered. The petitioner claims the balance sum of
US $ 9,39,718 towards agency fee after adjustment of the
amount of US $ 3,60,282 towards the payment already received
by it. The petitioner submits that the respondent has not
responded to several e-mails sent by the petitioner seeking
payment of the balance amount and that by a final
communication date 21st December, 2011 the respondent has
declined to make the payment of the balance on the ground that
the claim of the petitioner is baseless, unfounded and untenable.
The petitioner, in the above backdrop, asserts that disputes have
arisen between the parties in relation to the Service Provider
Agreement executed between them, Clause 7, whereof provides
for adjudication of the same by way of Arbitration. Clause 7
reads as under :
“Article 7 – Arbitration
7.1 Any and all disputes arising between the
PARTIES in connection with the performance and/or
5Page 6
interpretation of this Agreement shall be settled in an
amicable manner. In case the parties fail to arrive at
a settlement within Sixty (60) days of the matter
being referred by the aggrieved PARTY to the other,
such disputes shall be finally settled in accordance
with the provisions of Indian Arbitration and
Conciliation Act, 1996 and rules framed there under
7.2 The Arbitrator (s) appointed shall have its seat
in New Delhi and the arbitration proceedings shall be
in English. The Arbitrator (s) shall record reasons for
the award. Courts at New Delhi shall have exclusive
jurisdiction relating to adjudication of any dispute
which may arise between the PARTIES hereto.”
5. The petitioner has, in the light of the above, approached this
Court for appointment of an arbitrator and for reference of the
disputes for adjudication to him.
6. The respondent-company has in its reply opposed the grant
of any relief to the petitioner inter alia on the ground that the
notice for arbitration served upon the respondent is not a proper
one and that the claim made by the petitioner is barred by
limitation. The respondent’s further case is that the main service
which the petitioner was obliged to provide under the Service
Provider Agreement was to ensure that there was an amicable
settlement of the disputes between the respondent and the client
and that the bank guarantee provided by the respondent for US $
15.7 million to MGIC was returned to it. The petitioner having
failed to fulfill that obligation under the agreement was not
entitled to claim any amount from the respondent.
7. We have heard learned counsel for the parties at some
length. The material facts are not in dispute. That a Service
Provider Agreement was executed between the parties is
admitted. That Article 7 of the said agreement provides for
settlement of the dispute in relation to the agreement by way of
arbitration is also not in dispute. That disputes have actually
arisen between the parties in relation to the agreement is also
evident from the averments made in the pleadings. The only
method for determination of such disputes is by way of
arbitration. Whether or not the petitioner has provided the
services envisaged under the agreement and, if so, whether the
said services were adequate and satisfactory are matters that can
be examined only by the Arbitrator. So also the question whether
the claim made by the petitioner is time barred cannot be
examined in the present proceedings and shall have to be left
open to be raised before the Arbitrator. There is, in that view, no
gainsaying that the present petition under Sections 11(5) and
11(12) shall have to be allowed with appropriate directions,
particularly when this Court is concerned primarily with the
question whether an arbitration agreement exists between the
parties and if so whether the disputes falling within the scope of
the agreement have arisen for determination. Our answer to
both these questions being in the affirmative, the petitioner has
made out a case for appointment of an Arbitrator and for
reference of the disputes for adjudication to him/her.
8. In the result, we allow this petition, and appoint Ms. Justice
Rekha Sharma, former Judge of the High Court of Delhi as a Sole
Arbitrator for adjudication of the disputes that have arisen
between the parties in relation to the Service Provider Agreement
executed between them. We leave it open for the parties to
make their claims and counter claims in relation to the agreement
afore-mentioned before the Arbitrator. All contentions otherwise
open to the parties on facts and in law shall be open to be urged
before the Arbitrator. The petition, is accordingly, allowed with the
above directions leaving the parties to bear their own costs.
9. Parties are directed to appear before the Arbitrator on 22nd
August, 2016.
.…………….……………….CJI.
[T.S. Thakur]
..…………………….………….J.
[R. Banumathi]
...………………..…….……….J.
[Uday Umesh Lalit]
New Delhi;
July 13, 2016
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