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Hamdard Laboratories V. Sterling Electro


Hamdard Laboratories V. Sterling Electro [i]



Hamdard Laboratories India is that the petitioner during this case. it's a business entity engaged within the manufacture of Ayurvedic pharmaceutical products and Unani. The respondent, Sterling Electro Enterprises is an electrical instrument contracting company.

The petitioner on 22 November 2017 issued a young inviting bid. it had been issued for completing electrical installation works at a unit in Aurangabad. On 01 March 2018, The bid by the respondent was accepted and a contract. It had been executed between the parties for a complete value of Rs. 6,67,00,061.18. the petitioner on 03 March 2018 a sum of Rs. 1,66,75,015 was paid by the petitioner to the respondent

As per the terms of the Work Order, the respondent was alleged to complete the trade-in 10 months and make sure the supply of the electrical fittings as also their installation. within the discharge of its obligations under the contract, in December 2018, the respondent purchased electrical fittings to be utilized at the project site against invoices for a sum of Rs. 47,06,00,000, however, these fittings couldn't be installed at that stage as certain engineering work was left pending at the project site and assumed precedence over electrical installations. The petitioner requested the respondent to resume work only on 10 May 2019, in response whereto the respondent informed the petitioner of its unwillingness to figure for an equivalent rate as provided within the Work Order dated 01.03.2018. Instead, the respondent requested the petitioner to revisit the agreement and sought a price escalation of 19% on the costs provided within the Work Order, but the petitioner was only willing to supply a 5% escalation. When the respondent didn't accede to the present counteroffer, the petitioner terminated the Work Order on 28 August 2019 and requested the respondent to require back the electrical fittings. The petitioner also invited the respondent to amicably settle the dispute and requested a refund of the advance amount of Rs. 1,66,75,015 given by the petitioner.

The petitioner submits that when disputes arose between the parties, the petitioner attempted to resolve the matter amicably but the respondent didn't respond. This resulted in the petitioner invoking arbitration. The petitioner submits that since the article specifically stipulates that the 'the Courts of law at Delhi' alone shall have the jurisdiction, a necessary corollary thereof is that the parties agreed to designate the seat of arbitration in Delhi which this Court has exclusive jurisdiction to entertain this petition under Sections 7 and 11 of the Act.


The issue that arose, in this case, was regarding the appointment of a sole arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996 to adjudicate the disputes between the parties.



The respondent claimed that the respondent is still agreeable to an amicable settlement and, therefore, the present petition is premature. He further submits that this Court doesn't have territorial jurisdiction to entertain this petition since neither did the explanation for action arise in Delhi nor did the parties agree on Delhi as the seat of arbitration. He submits that when the agreement doesn't provide for any seat of arbitration, much less designate Delhi together, the petitioner was required to approach the Court within whose jurisdiction the cause of action had arisen, in accordance with Section 2 (1)(e) of the Act. Since the parties had not prescribed a seat of arbitration, any petition under Section 11 of the Act might be filed only at Aurangabad where the whole cause of action arose, considering the work order was issued there and therefore the contractual work was required to be executed there.

When the parties herein have specifically provided, within the arbitration clause itself, that the Courts at Delhi will have jurisdiction over all arbitration proceedings arising out of the Work Order dated 01 March 2018. The court said that the parties agreed to make Delhi the seat of arbitration, which leaves no merit in the respondent's contention that this Court does not have territorial jurisdiction to adjudicate the present petition. It was decided that Hon'ble Ms. Justice Rekha Sharma will be the sole Arbitrator for the disputes.


This Article Does Not Intend To Hurt The Sentiments Of Any Individual Community, Sect, Or Religion Etcetera. This Article Is Based Purely On The Authors Personal Views And Opinions In The Exercise Of The Fundamental Right Guaranteed Under Article 19(1)(A) And Other Related Laws Being Force In India, For The Time Being. 

  • Case Analysis on Hamdard Laboratories V. Sterling Electro
  • question of jurisdiction
  • appointment of arbitrator by High Court

BY : Anupama. P

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