SHIN SATELLITE PUBLIC CO. LTD. versus M/S JAIN STUDIOS LTD.

Citation: [2006] 1 S.C.R. 933 · Decided: 31-01-2006 · Supreme Court of India · Bench: C.K. THAKKER · Disposal: Case Allowed

Cited by 3 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

' 
SHIN SATELLITE PUBLIC CO. LTD. 
A 
v. 
MIS JAIN STUDIOS LTD. 
JANUAkY 31, 2006 
[C.K. THAKKER, J.] 
B 
Arbitration-Arbitration and Conciliation Act, 1996-Section 11 (6)~ 
Contract Act, 1872-Section 28-Arbitration Agreement-Doctrine· of 
Severability-Appointment of Arbitrator-Agreement between petitioner and 
respondent company for availing broadcasting services of petitioner by C 
respondent-Clause 23 providing for arbitration in case of dispute between 
the parties-This clause makes the arbitrator's determination final and 
binding between the parties declaring that parties had waived the rights of 
appeal or objection in any jurisdiction-Clause 20 explicitly providing for 
severability of agreement-Petitioner sending a letter/notice to respondent D 
demanding for arbitration-Respondent alleging that arbitration dause not 
legal and valid-Petitioner filing application uls 11 (6) of the Act-Held, 
Objectionable part as to finality and restraint in approaching a court of law 
is clearly severable as it is independent of dispute being referred to and · 
resolved by an arbitrator-The agreement is legal, lawful and enforceable E 
and offending part can be separated and severed using a 'blue pencil'-
Hence arbitrator appointed. 
Section 11 (6)-Loss of right to make appointment of arbitrator as per 
arbitration agreement-Respondent failing to appoint arbitrator in terms of 
arbitration agreement even though letter I notice issued to it by petitioner F 
to do so-Petitioner filing application u/s 11 (6) for appointment of 
arbitrator-Respondent now seeking time to make appointment of an 
arbitrator-Held, . at this belated stage the respondent cannot be permitted 
to take advantage of its own fault-Refusing the prayer, held, respondent 
having failed to appoint the arbitrator the person nominated by petitioner 
appointed as Sole Arbitratcr. 
Section 20-Arbitration-Change of place whether permissible-
G 
y 
Arbitration agreement providing Delhi as the place for arbitration-Prayer 
to refer the dispute for arbitration in London or in Singapore where other 
933 
H 
934 
SUPREME COURT REPORTS 
[2006] I S.C.R. 
A arbitrations going on between the same parties-Held, prayer cannot be 
granted. 
The petitioner, a company registered under the laws of Thailand, carries 
on satellite business and provides broadcasting and internet services to 
various companies/firms in the world. The respondent is an Indian Company. 
B An agreement was entered into between the petitioner and the respondent. 
Clause 23 of the agreement provided for arbitration in case of dispute. Clause 
23 contained a condition that the arbitrator's determination would be treated 
as final and binding between the parties and the parties had waived all rights 
of appeal or objection in any jurisdiction. Clause 20 of the agreement declared 
C that if any provision is held invalid, illegal or unenforceable, it would not affect 
other clauses. A dispute arose between the parties. The petitioner sent a letter/ 
notice to the respondent for referring the dispute to an arbitrator stating 
therein that it had appointed Hon'ble Mr. Justice M. L. Pendse (retired) as its 
arbitrator and called upon the respondent to appoint an arbitrator. The 
respondent replied that arbitration clause was not legal and valid. The 
D petitioner filed an application u/s 11(6) of the Arbitration and Conciliation 
Act 1996 praying for appointment of an arbitrator. 
The respondent contended that the Arbitration Agreement was not legal 
and valid as arbitration clause takes away completely the right of the parties 
E to challenge the award passed by the arbitrator. It was also pleaded that since 
disputes were to be resolved by arbitration under the rules of UNCITRAL, 
arbitration may be held in London or in Singapore where arbitration 
proceedings were going on between the parties. 
F 
The petitioner submitted that since agreement itself provides for 
severability, ignoring the objectionable part giving finality to arbitration award, 
the remaining parts can be enforced. 
Allowing the Arbitration Petitio11, the Court 
HELD : I. I. A court of law will read the agreement as it is and cannot 
G rewrite nor create a new one. The contract must be read as a whole and it is 
not open to dissect it by taking out a pa1 t treating it to be contrary to law and 
by ordering enforcement of the rest if otherwise it is not permissible. But it 
is well settled that if the contract is in several parts, some of whi

Excerpt shown. Read the full judgment & AI analysis in Lexace.