SHYAM SUNDER AGARWAL versus P. NAROTHAM RAO AND ORS.

SHYAM SUNDER AGARWAL versus P. NAROTHAM RAO AND ORS.

On a reading of relevant clauses, the agents named as 'mediators/arbitrators' were escrow agents to ensure completion of the transaction, not adjudicators of disputes. Clause 12 is not an arbitration clause as its 'decision' is pro tem and applies only during transaction period; agents are 'functus officio' after completion. Conduct of parties and language of the agreement are inconsistent with intent to arbitrate disputes.

Parties
Appellant: Shyam Sunder Agarwal; Respondent: P. Narotham Rao; Respondent: Respondent Nos. 1 to 4
Jurisdiction
India
Judgment Date
23 July 2018
Procedural Posture
Civil Appeal / Appeal From High Court Judgment and Order Dated 22.07.2011 in Arbitration Application No. 112 of 2009
Outcome
Appeal disposed of; discretionary jurisdiction under Article 136 not exercised.
Legal Topics
Arbitration Clause Interpretation, Escrow Agent Powers, Memorandum of Understanding, Article 136 Jurisdiction
Arbitration Arbitration Clause Interpretation Escrow Agent Powers Memorandum of Understanding Article 136 Jurisdiction

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Parties

Shyam Sunder Agarwal

Appellant

P. Narotham Rao

Respondent

Respondent Nos. 1 to 4

Respondent

Procedural Posture

Civil Appeal / Appeal From High Court Judgment and Order Dated 22.07.2011 in Arbitration Application No. 112 of 2009

Legal Issues

  1. 1 Whether Clause 12 of the MoU/agreement constitutes an arbitration clause under the Arbitration and Conciliation Act, 1996

Ratio Decidendi

On a reading of relevant clauses, the agents named as 'mediators/arbitrators' were escrow agents to ensure completion of the transaction, not adjudicators of disputes. Clause 12 is not an arbitration clause as its 'decision' is pro tem and applies only during transaction period; agents are 'functus officio' after completion. Conduct of parties and language of the agreement are inconsistent with intent to arbitrate disputes.

Court Disposition

Appeal disposed of; discretionary jurisdiction under Article 136 not exercised.

Orders

  • Appeal disposed of; no arbitration clause found in MoU; discretionary jurisdiction under Article 136 not exercised in favour of appellant.