Case Brief Airone Charters Pvt. Ltd v. JetSetGo Aviation Services Pvt. Ltd

Ridhima Mehrotra, Intern

Airone Charters Pvt. Ltd v. JetSetGo Aviation Services Pvt. Ltd

Citation- MANU/DE/2731/2021

Court- Delhi High Court

Bench- Justice C. Hari Shankar

Date of Decision- 12.10.2021

Disputes can be raised at different stages. A counterclaim not taken on record can be raised as claim in separate arbitration because where there is a right there is a remedy. Pre-arbitral step is not necessary when it is an empty formality.

FACTS OF THE CASE

Jetsetgo initiated arbitration in April 2018. The tribunal set a schedule in December that year. Airone filed its counterclaim beyond the time allotted and the tribunal in July 2019 said it could not take it on record unless Airone obtained at least six months’ extension. Airone applied to the court for extension but withdrew it (in September 2019) with liberty to pursue appropriate remedy available in law.” Airone again applied to the tribunal, but this time it “struck off” the counterclaim observing that Airone had liberty to pursue another remedy.In May 2020,The petitioner issued a notice, invoking arbitration, to the respondent, under Section 21 of the Arbitration and Conciliation Act, 1996 ("the 1996 Act"). The petitioner suggested that its claims be referred to the arbitral tribunal comprising Hon'ble Mr. Justice Mukul Mudgal (Retd.), Hon'ble Mr. Justice S.S. Saron (Retd.) and Hon'ble Mr. Justice R.S. Sodhi (Retd.), which was already seized of the disputes between the petitioner and the respondent, albeit at the instance of the respondent. The respondent demurred. The petitioner, therefore, approached this Court under Section 11(6) of the 1996 Act, for referring the claims of the petitioner to the learned arbitral tribunal comprising Hon'ble Mr. Justice Mukul Mudgal (Retd.), Hon'ble Mr. Justice S.S. Saron (Retd.) and Hon'ble Mr. Justice R.S. Sodhi (Retd.).

ISSUES INVOLVED

• Whether the Petitioner has the right to seek arbitration?

• Whether the claims seeked by the Petitioner time-barred?

APPLICABLE LAWS

The Laws and provisions applicable in this case are:-

• Section 11 of Arbitration and Conciliation Act, 1996

• Section 21 of Arbitration and Conciliation Act, 1996

JUDGMENT

While addressing the issues mentioned above, the Hon’ble High Court analysed that the striking off, from the record, of the counter-claims of the petitioner cannot be treated as rejection of the request of the petitioner to refer the claims to arbitration under Section 11 of the 1996 Act. The counterclaims were filed by the petitioner on 6th July, 2019. The learned Arbitral Tribunal refused to take the counterclaims on record unless six months' extension of its mandate was obtained from this Court. The petitioner, accordingly, filed the application seeking extension of the mandate of the learned Arbitral Tribunal by six months. For reasons unknown, the petitioner withdrew the said petition on 26th September, 2019. Even so, this Court reserved liberty to the petitioner "to pursue the appropriate remedy that may be available to him in law". In view of the withdrawal, by the petitioner, the learned Arbitral Tribunal struck the petitioner's counterclaims off the record. Even while doing so, the learned Arbitral Tribunal reserved liberty, with the petitioner, to avail such remedy as was available to it in law. The counterclaims, which were earlier on record, were struck off the record only because of the time constraint within which the learned Arbitral Tribunal would have to render its award and the withdrawal, by the petitioner. However, that impediment does not apply, where the petitioner desires to agitate the claims substantively in arbitral proceedings. Therefore, the petitioner is not barred from seeking reference of its claims to arbitration under Section 11 of the 1996 Act, owing to its counterclaims having been struck off the record by the learned Arbitral Tribunal.