Pending Section 8 Application Does Not Bar Appointment of Arbitrator Under Section 11: Calcutta High Court
Overview of the Dispute
The Calcutta High Court recently adjudicated a petition filed under Section 11(6) of the Arbitration and Conciliation Act, 1996, seeking appointment of a sole arbitrator in a commercial dispute between Agri Horticultural Society of India and Enkon Private Limited. The central legal question before the Court was whether the pendency of a civil suit — along with an application under Section 8 of the Arbitration and Conciliation Act, 1996 — could prevent the High Court from exercising its jurisdiction to appoint an arbitrator under Section 11.
The Court answered this question in the negative, decisively rejecting the respondent's objection on maintainability and proceeding to appoint an arbitrator.
Background and Contractual Arrangements
The dispute between the two parties originated from a series of commercial agreements relating to advertisement hoardings on the petitioner's property.
First Agreement (2014)
The parties initially executed an agreement dated 8th October, 2014, under which Enkon Private Limited (the respondent) was permitted to erect an advertisement hoarding and display commercial advertisements on a structure measuring approximately 6000 sq. ft., located along the boundary walls of Belvedere Road and Alipore Road, situated on the property of Agri Horticultural Society of India (the petitioner). This arrangement was valid for a period of three years and consequently expired in 2017.
Second Agreement (2021)
Following the expiry of the earlier contract, the parties entered into a fresh agreement dated 1st November, 2021, concerning a distinct commercial arrangement for the display of hoardings. This subsequent agreement also subsumed the subject matter covered under the original 2014 contract.
The Arbitration Clause
A critical provision in the agreement dated 1st November, 2021 was Clause 9, which set out the arbitration mechanism agreed upon between the parties. The clause reads as follows:
"i) Any dispute or difference arising out of and under these presence including as to the interpretation of the terms and conditions, or non-compliance or nonpayment, the same shall be resolved mutually and Amicably by both the parties.
ii. If it cannot be so resolved amicably the same shall be referred to the Arbitration under the provisions of the Arbitration and Conciliation Act, 1996, оr any statutory modification thereof in force. The Arbitration shall be held at Kolkata and it shall be conducted in English language only.
iii. The Courts at Kolkata alone shall have jurisdiction to try and entertain disputes between the parties arising under these presents including arising from the Arbitration proceedings."
Notably, the existence and validity of this arbitration clause was not disputed by the respondent's counsel before the High Court.
Respondent's Objection to Maintainability
Despite acknowledging the arbitration agreement, the respondent raised a preliminary objection challenging the maintainability of the petition under Section 11. The respondent's counsel pointed out that: