SWISS TIMING LIMITED versus ORGANISING COMMITTEE, COMMONWEALTH GAMES 2010 DELHI

Citation: [2014] 6 S.C.R. 514 · Decided: 28-05-2013 · Supreme Court of India · Bench: S.S. NIJJAR · Disposal: Case Allowed

Cited by 7 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

A 
8 
[2014] 6 S.C.R. 514 
SWISS TIMING LIMITED 
v. 
ORGANISING COMMITTEE, COMMONWEALTH GAMES 
2010 DELHI 
(Arbitration Petition No. 34 of 2013) 
MAY 28, 201'4 
[SURINDER SINGH NIJJAR, J.] 
Arbitration and Conciliation Act, 1996- s. 5, 8, 11(4), (6) 
C and 16, 45 - Application for appointment of arbitrator and 
constitution of the arbitral tribunal - Maintainability of -
Foreign Company-petitioner entering into an agreement with 
Organising Committee, CWG-respondent for providing certain 
services - Disputes over payment - Foreign Company 
D invoking arbitration clause - Objections by respondent that 
petitioner did not follow dispute resolution mechanism, it 
engaged in corrupt, fraudulent or coercive practices, rendering 
the agreement void ab initio; criminal proceedings vrere going 
on in trial court, thus arbitration and criminal proceedings 
E would lead to conflicting conclusions - Held: Arbitration 
application is maintainable - It cannot be said thal since a 
criminal case has been registered against the Chci.rman of 
the Organising Committee and some other officials of the 
petitioner, the Supreme Court would have no jurisddion to 
F make a reference to arbitration - Whenever contract is said 
to be void-ab-initio, the Courts exercising jurisdiction urss. 8 
and 11 are not rendered powerless to refer the disputes to 
arbitration - No inherent risk of prejudice to any of the pa.ties 
in permitting arbitration to proceed simultaneously to fhe 
criminal proceedings - In an eventuality where award is 
G rendered by arbitral tribunal, and criminal proceedilgs result 
in conviction rendering the underlying conract void, 
necessary plea can be taken on the basis of t~ conviction 
to resist the execution/enforcement of the award, If the matter 
H 
514 
SWISS TIMING LTD. v. ORGANISING COMMITTEE, 
515 
COMMONWEAL TH GAMES 
is not referred to arbitration and criminal proceedings result 
A 
in an acquittal leaving no ground for claiming that underlying 
contract is void or voidable, it would be undesirable delaying 
the arbitration - On facts, balance of convenience tilted more 
in favour of permitting the arbitration proceedings to continue 
rather than to bring the same to a grinding halt - Thus, Arbitral 
B 
Tribunal constituted, nominating second arbitrator and 
Chairman of the Arbitral Tribunal. 
The petitioner-foreign company entered into an 
agreement with the respondent-CWG Committee for C 
providing timing, scoring and result systems to conduct 
Commonwealth Games, 2010. In consideration of its 
services, the petitioner was to receive certain amount, 
Since the respondent disputed its liability to pay the', 
amounts, the petitioner invoked arbitration under clause 
38.6 of the agreement and nominated Justice S.N. 
D 
Variava, former Judge of Supreme Court of India as 
arbitrator on its behalf. A notice to this effect was served 
on the respondent. A reminder was also issued. 
Thereafter, the petitioners filed the instant petition under 
section 11 (4) read with section 11 (6) of the Arbitration and 
E 
Conciliation Act, 1996 seeking appointment of nominee 
arbitrator of the respondent and to constitute the arbitral 
tribunal by appointing the presiding arbitrator in order to 
adjudicate the disputes arisen between the parties. 
F 
The respondent raised preliminary objections that the 
petitioner did not follow the dispute resolution 
mechanism as provided in the agreement; that the 
respondent had invited the petitioner for amicable 
resolution of the dispute; that the contract stoods vitated 
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and is void ab initio since the petitioner had engaged in 
corrupt, fraudulent or coercive practices, they were not 
entitled to any payment whatsoever in respect of the 
contract, thus, there was no basis to invoke arbitration 
clause; that a criminal case was registered under Section 
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516 
SUPREME COURT REPORTS 
[2014] 6 S.C.R. 
A 120-B, read with Sections 420, 427, 488 and 477 IPC and 
Section 13(2) read with Section 13(1)(d) of the Prevention 
of Corruption Act against the then Chairman of the 
Organising Committee and other officialS" of the 
respondent and some officials of petitioner and as such 
B respondent sought to invoke non-liability clause whereby 
it could terminate the agreement in case of corrupt, 
fraudulent, collusive or coercive practice in connection 
with the agreement; that due to the pendency of the 
criminal proceedings in the trial court, the petition ought 
c not to be entertained and in 

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