Saturday 29 August 2020

How order 2 R 2 of CPC applies to arbitration proceeding?

Supreme Court, in Dolphin Drilling Ltd. Vs. Oil & Natural Gas Corporation Ltd. MANU/SC/0120/2010 : (2010) 3 SCC 267 held that the words "all disputes" in arbitration clause can only mean "all disputes that may be in existence when the arbitration clause is invoked and one of the parties to the agreement gives the arbitration notice to the other"; it cannot be held that once the arbitration clause is invoked, the remedy of arbitration is no longer available in regard to other disputes that might arise in future. We may add, that depending on nature of the agreement or obligations to be performed thereunder, it is not necessary that all disputes between parties arise at one point of time. This Court in National Highways Authority of India Vs. ITD Cementation India Ltd. MANU/DE/6011/2012 : 197 (2013) DLT 650 held that in large scale projects, it is not unheard that different facets of the project constitute subject matter of separate references and in the context of large scale works contracts, there cannot be any rigid application of the principles of Order II Rule 2 of the CPC unless it is demonstrated that prejudice has been caused to either party as a result of such non-adherence. We may further add that even if commencement of arbitration with respect to disputes which have arisen, can await culmination of full performance of the agreement, to commence arbitration at one time only, also with respect to other dispute which may arise, the claim earliest arising may by then become barred by time. Order II Rule 2 of the CPC also envisages successive causes of action.

FAO (OS) (COMM) 60/2020 and CM No. 10461/2020

Decided On: 07.07.2020

 Hero Wind Energy Private Ltd. Vs.   Inox Renewables Limited and Ors.

Hon'ble Judges/Coram:
Rajiv Sahai Endlaw and Asha Menon, JJ.

Author:  Rajiv Sahai Endlaw, J.
Citation: MANU/DE/1349/2020.
Read full judgment here: Click here
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