WEATHERFORD OIL TOOL MIDDLE EAST LIMITED versus BAKER HUGHES SINGAPORE PTE

Citation: [2022] 13 S.C.R. 996 · Decided: 20-10-2022 · Supreme Court of India · Bench: UDAY UMESH LALIT · Disposal: Appeal(s) allowed

cites 2 · see the full citation network in Lexace

Judgment (excerpt)

A
B
C
D
E
F
G
H
996
SUPREME COURT REPORTS
[2022] 13 S.C.R.
[2022] 13 S.C.R. 996
996
WEATHERFORD OIL TOOL MIDDLE EAST LIMITED
v.
BAKER HUGHES SINGAPORE PTE
(Arbitration Petition No. 03 of 2022)
OCTOBER 20, 2022
[UDAY UMESH LALIT, CJI AND BELA M. TRIVEDI, J.]
Arbitration and Conciliation Act, 1996: s.11(6) read with
s.11(12) – Appointment of arbitrator – Arbitration agreement in
unstamped Contract – In the instant case, petitioner and respondent
entered into three agreements – Respondent issued letters to the
petitioner terminating the three agreements – Pursuant to this,
petitioner asked respondent to pay certain amount which was
refused by respondent – Thereafter, petitioner issued notices invoking
arbitration clauses containing in three agreements – In reply,
respondent raised a contention that stamp duty was not paid on
agreements – However, respondent proposed for referring the
dispute to mediation, but it failed eventually – Consequently,
respondent neither agreed nor suggested any of the names of
arbitrators – Three Arbitration petitions filed by the petitioner under
s.11(6) read with s.11(12) of the Act, 1996 seeking appointment of
a sole arbitrator to adjudicate upon the aforesaid disputes - Held:
Since the arbitration agreements contained in all the three
agreements were not disputed by the respondent, and since the
respondent itself had proposed to consolidate the disputes under
the said agreements and to refer them to a sole arbitrator in one
single arbitration, it does not lie in the mouth of the respondent
now to say that the petitions seeking appointment of a sole arbitrator
should not be entertained, as the matter with regard to the
determination of requisite stamp duty under the Maharashtra Stamp
Duty Act on the two agreements is pending before the Collector –
There is no legal impediment to the enforceability of the arbitration
agreement pending payment of stamp duty on the substantive
contract – Of course, the said issue is pending under consideration
by the Constitution Bench, the matters which are still pending at a
pre-appointment stage, cannot be left hanging until the larger Bench
settled the issue – A former Judge of High Court appointed as a
sole arbitrator to adjudicate upon dispute – Stamp Duty.
A
B
C
D
E
F
G
H
997
Allowing the petitions, the Court
HELD: 1. When the facts of the present petitions are
examined, it deserves to be noted that the execution of three
agreements, namely, Onshore Service Agreement, Lease
Agreement and Drilling Service Agreement between the
petitioner and the respondent has not disputed. The letters of
termination terminating the said three agreements by the
respondent on 9th April, 2020, and other correspondence that
ensued between the parties as stated in the earlier part of the
judgment are also not disputed. Though the respondent, in
response to the arbitration notices given by the petitioner had
raised a contention in the letter dated 17th January 2021 that the
agreements were not stamped and that consequences would
follow as per the Maharashtra Stamp Act, the respondent
proposed to amicably resolve the disputes through Mediation,
and also suggested in the alternative to consolidate the disputes
under the three agreements to be heard by a sole arbitrator in
one single arbitration. The efforts to amicably resolve the disputes
through Mediation having failed, the petitioner thereafter also
agreed to consolidate the disputes under the three agreements
to be heard by a sole arbitrator in one single arbitration, as
proposed by the respondent. The petitioner also proposed the
names of the arbitrators, however, the said names were not
agreeable to the respondent. The respondent also failed to
propose any names for the appointment of a sole arbitrator. [Paras
14 and 15][1008-G-H; 1009-E-H]
2. Since the arbitration agreements contained in all the
three agreements namely, Onshore Service Agreement, Lease
Agreement and Drilling Service Agreement were not disputed
by the respondent, and since the respondent itself had proposed
to consolidate the disputes under the said agreements and to
refer them to a sole arbitrator in one single arbitration, this court
is of the opinion that now it does not lie in the mouth of the
respondent to say that the petitions seeking appointment of a
sole arbitrator should not be entertained, as the matter with
regard to the determination of requisite stamp duty under the
Maharashtra Stamp Duty Act on the two agreements is pending
before the Coll

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