The dispute stems from an oral and subsequently written agreement for the takeover of the plant, with both sides entering into a Memorandum of Understanding (MOU) on February 9, 2022. Greenbilt claimed the respondent had initially agreed to pay Rs.3 crore as advance—of which Rs.2.8 crore was paid—but later failed to fulfill other obligations including the balance advance, remaining sale consideration, and occupational charges.
Greenbilt, represented by advocate Mr. Kumarjit Banerjee, alleged that A B Dinesh Concrete had not only defaulted on payments but also abandoned the plant by the end of 2020 without formal notice. “The MOU was clearly circulated over email and formed a binding arbitration agreement under Section 7(4)(b) of the Arbitration and Conciliation Act,” Mr. Banerjee argued.
The case took a legal turn when arbitration proceedings initiated by both parties under the said MOU broke down. Arbitrators were nominated—Sri Bijoy Kumar Tibrewal by the respondent and Sri Prabir Gupta by the petitioner—but the respondent and its nominee failed to appear for the scheduled sitting on April 20, 2023. As per the petitioner, the tribunal’s mandate was thereby terminated.
A demand letter followed on September 14, 2023, to which the respondent issued a denial of all claims. When a substitute arbitrator was proposed under Section 15(2) of the Arbitration and Conciliation Act, the respondent again raised objections, even questioning the validity of the arbitration agreement.
Justice Sarkar, however, observed that the parties’ conduct and the correspondence, including the respondent’s email dated February 1, 2024, indicated admission of the MOU’s existence. Although the respondent alleged fraud and misrepresentation, the Court underscored that under Section 16 of the Arbitration and Conciliation Act, an arbitrator is empowered to rule on such matters.
Quoting from the judgment, Justice Sarkar remarked, “Exchange over email is a valid and accepted form of execution of an arbitration agreement.” She further noted, “Clause 12.3 of the said MOU constituted a valid and binding arbitration clause... Even if the MOU was invalidated for any other reason, the arbitration agreement continued to be a separate and independent agreement.”
The court emphasized that disputes were indeed present, and arbitration was the appropriate mechanism to resolve them under commercial jurisprudence. In this light, the application by Greenbilt for appointment of an arbitrator was granted, paving the way for formal arbitration proceedings to begin.
This case adds to the growing list of commercial dispute resolution matters underlining the relevance of arbitration as a preferred method for swift and neutral settlement, especially in high-stakes infrastructure and industrial deals. The court’s validation of email-based arbitration agreements may also set a precedent for similar digital exchanges in corporate contracts.
Read The Judgment Here
keywords: calcutta high court, acc block plant dispute, arbitration and conciliation act, greenbilt industries, rs. 21 crore plant deal, commercial dispute resolution
