The author has been pursuing alternative dispute resolution institutions other than the courts. Federation of Indian Chambers of Commerce and Industry (FICCI) has a division called Arbitration and Conciliation Tribunal (FACT) which is portrayed in this essay
Failing any agreement … in an arbitration with a sole arbitrator, if the parties fail to agree on the arbitrator within thirty days from receipt of a request by one party from the other party to so agree the appointment shall be made, upon request of a party, by the Chief Justice or any person or institution designated by him reads Section 11 (5), the Arbitration and Conciliation Act, 1996
The Case: This is not a curious case, namely, an exceptional one; on the contrary it is that where disputants are never satisfied, even worse where they are in disagreement with their own mutually drawn and signed contracts, where Federation of Indian Chambers of Commerce and Industry (FICCI) was the jointly agreed arbitrator. It is dramatic. The Act 1 of this drama consists in the original agreement. The Act II contains the disagreements. The Act III consists of the verdict.
The Suit: The petitioner, Air Liquide North India Pvt. Ltd., filed a suit against Shree Shyam Pulp & Board Mils Ltd on 20 September, 2016 in the High Court at New Delhi, with the prayer to appoint an Arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996 to adjudicate the dispute.
The Original Agreement: The mutual agreement consisted of a) Sales and Purchase agreement for Supply of Industrial Gases, exclusively from each other only, in 2011, with storage facilities provided by the petitioner; b) Clause No. 12.1 of the agreement stated that in the case of ‘any dispute or matter in difference shall be settled by arbitration before a sole arbitrator, agreeable to both parties, from the Federation of Indian Chambers of commerce and industry, (FICCI), New Delhi and the decision of the arbitrator shall be final and binding upon the parties’; c) the language of conducting the proceedings will be English; d) Place of proceedings to be Delhi; e) the agreement is to be governed by the laws of India; f) accepted jurisdiction exclusively the Courts in Delhi.
The end of Act I.
The Dispute: The respondent put forth the following argument: a) The Court has no jurisdiction over the present dispute because the plant in question due to which the petitioner has filed the suit is territorially is in Kashipur, Uttarakhand. The respondent corroborated it by citing several cases about the jurisdiction b) the letter invoking the arbitration clause was not in terms of agreement, because it was not addressed to the FICCI, New Delhi; c) the FIR was lodged against the petitioner in Uttarakhand where the plant is located.
The petitioner countered saying, a) Arbitration clause does not envisage FICCI to be the appointing authority for an Arbitrator; b) the jurisdiction of the Court is indisputable since the agreement clearly states the seat of Arbitration to be Delhi exclusively.
The end of Act II
The Verdict:
Having heard the disputants and having deliberated several precedents the Court upheld the Petitioner’s appeal. Accordingly, it ordered that an Arbitrator be appointed under the Rules of Delhi International Arbitration Centre (DAC). The Court also set the date and place of such event.
The end of Act III.
Whether Arbitration is worth the trouble from institutions such as chambers of commerce?
Having read the earlier submissions and even this, it is natural for the reader to wonder if the arbitration is of any benefit that it promises. The answer is in the strong affirmative. Most of the arbitration cases which have been conducted are done so within the fraternity of the companies that belong to one or the other such institutions. Thus majority of the cases do not come into public domain. It is but natural to maintain these proceedings privately and in confidence. The aim is to settle the disputes amicably, in a family spirit as it were. However, it does not imply that these trade and commerce fraternities, whether national or international infringe on the rights of the parties to the dispute to seek justice in a court of law. Hence, only those cases appear in the public domain when one of the aggrieved parties approach the court.
In the above case, we have seen that since one of the disputants, the petitioner, was not agreeable about the FICCI’s arbitration status, he wanted the court to appoint an arbitrator. No one can stop one from going to the court. However, if a company is a member of the chamber of commerce or any other similar institution, then it is highly beneficial to settle matters of disputes amicably within the fraternity where the corner stone of adjudication proceedings protect privacy and maintain confidentiality. The courts of justice, on the other hand, are public. One of the parties to the disputes wins, the other loses. The reputation is at stake. Those who lose a case lose the reputation in the market. One who loses reputation suffers a very damaging blow to the business as the public trust in the company diminishes and the customers shun its goods and services; also, the employees quit and seek better prospects. This development where the company faces losses of customers, employees and its own reputation is called attrition. Having faith in arbitration results in minimum time for disputes, saving in time and money.
Where FICCI Stands:
It is a highly reputed institution in the world of trade and commerce. It is affiliated to the International Chambers of Commerce (ICC) and also relates with chambers of commerce around the world. Within the country it works along with Indian Council of Arbitration (ICA), Indian Institute of Arbitration & Mediation (IIAM) and the Associated Chambers of Commerce and Industry (ASSOCHAM). It may do India Inc. proud to know that in 1927 it was Mahatma Gandhi who initiated the move for the formation of FICCI. G.D. Birla and Purushottamdas Thakurdas, both not only the great pioneers of Indian industry but also played a great role in the freedom movement of India laid its foundation
The columnist is a writer with Oxford University Press and a published author. Email: albuquerque.daniel@gmail.com
