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CASE NO.: Arbitration Petition  1 of 2007

PETITIONER: CITIBANK, N.A.

RESPONDENT: TLC MARKETING PLC & ANR.

DATE OF JUDGMENT: 05/10/2007

BENCH: LOKESHWAR SINGH PANTA

JUDGMENT: JUDGMENT

O R D E R

ARBITRATION APPLICATION [C] NO.1 OF 2007

1.      The applicant-Citibank, N.A. preferred this application  under Sections 11(5), 11(10) and 11(12) read with Section 10  of the Arbitration and Conciliation Act, 1996 [hereinafter  referred to as ’the Act’] praying for appointment of sole  Arbitrator in an ’international commercial arbitration’ in terms  of Section 2(f) of the Act, to adjudicate the dispute between the  parties.   2.      The applicant-Citibank, is a national banking association  duly constituted, registered and in existence in accordance  with the laws of the United State of America now in force and  having its head office at 399 Park Avenue, Borough of  Manhattan, City of New York and having an office in India  among other places at Citigroup Centre, G. C-61, Bandra- Kurla Complex, Bandra (East), Mumbai.  The applicant- Citibank, being engaged in banking business in India  pursuant to licences and approvals from relevant authorities  including Reserve Bank of India, inter alia, issues Credit and  Debit Cards collectively [hereinafter referred to as ’Citibank  Cards’]. 3.      The respondent No.1-TLC Marketing PLC (for short ’TLC’],  is a company incorporated under the provisions of the laws in  force in the United Kingdom having its registered office at 54,  Banker Street, London WIU 7BU.  TLC is a company engaged  in the business of marketing and selling inter alia leisure, life- style and travel services.   4.      The respondent No.2-Wunderman India Pvt. Ltd. (for  short ’WIPL’] is an Indian company incorporated under the  provisions of the Companies Act, 1956 and has its registered  office at Kalpataru \026 Synergy, 2nd Floor, Opp. Grand Hyatt, Off  Western Highway, Vakola, Santa Cruz (East), Mumbai.   Respondent No.2-WIPL is an exclusive marketing and fulfilling  agent of respondent No.1-TLC for the Indian sub-continent. 5.      The applicant-Citibank states that the respondents-TLC  and WIPL are the alter ego of each other and their interests are  identical, co-existent and co-terminus and for all practical  purposes they are one party and their obligations are joint and  several in respect of the subject-matter of the present  application.  It is the case of the applicant-Citibank that in  September, 2005, both the respondents-TLC and WIPL                                                                                                                                                                                                                                                                               

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had approached the Citibank and made a series of claims and  representations about their expertise, background, financial  wherewithal and intent to associate with the applicant- Citibank to implement a Scheme to reward and acknowledge  the valued association of loyal customers of the applicant-  Citibank.  The respondents-TLC and WIPL represented to the  applicant-Citibank that they were the promoters and incentive  companies operating in various markets around the world and  they could offer their clients fabulous consumer propositions  and the corresponding service to support such promotions in  order to help their clients to meet their objectives such as  customer retention, loyalty, etc. etc.  Respondent No.2-WIPL  further represented to the applicant-Citibank that its  proposition was designed to meet the expectations desired to  be achieved by the applicant-Citibank.  It is pleaded by the  applicant-Citibank that relying upon the said claims,  assurances and representations made by the respondents-TLC  and WIPL, as regards their expertise in handling such  arrangements, a tripartite agreement was entered into between  the parties on 04.10.2005.  The agreement became operational  w.e.f. 01.10.2005 and was to be valid till 31.08.2006.   6.      It is pleaded by the applicant-Citibank that under the  Scheme it was agreed to by the parties to the agreement that  the eligible credit card customers of the applicant-Citibank,  having fulfilled certain specific criteria, were entitled to ’Free  return flight vouchers’ on air routes within India subject to the  applicable terms and conditions.  As and when, any of the  customers of the applicant-Citibank qualified/fulfilled the  eligibility criteria he/she would get a voucher from the  applicant-Citibank.  The customers, after the receipt of the  vouchers, had the option to voluntarily complete the details  required in the voucher including the choice of three  destinations and three dates of travel but not earlier than 30  days from the date of signing the voucher and sending the  same to the applicant-Citibank.  The respondent No.2-WIPL  was required to perform various tasks including, but not  limited to contacting the customer, checking seat availability,  confirming the booking request according to preferences and  sending confirmation to customers of their preference of travel  date/destination.  The applicant-Citibank and the respondents  - TLC and WIPL agreed to the Scheme called  the "Fly for Sure"  programme, which was envisaged by the applicant-Citibank to  be effective from 01.10.2005 until 31.12.2005.  The applicant- Citibank contracted for buying 1,00,000 return air-ticket  vouchers from the respondents-TLC and WIPL in anticipation  of the success of the Scheme for a consideration of Rs.432/-  plus applicable taxes per voucher and,  accordingly, had paid  for the same in accordance with Appendix-II of the agreement.    According to the applicant-Citibank, it was the responsibility  of the respondents-TLC and WIPL to ensure fulfillment of the  Scheme to the satisfaction of the customers.   It is stated that  under the Scheme, 35,000 card members of the applicant- Citibank were found to be eligible for availing of the ’free  return air-ticket’ to be provided by the respondents-TLC and  WIPL.  The applicant-Citibank forwarded the vouchers  completed by the eligible and interested card members to  respondent No.2-WIPL in accordance with the procedure  agreed to by the parties.  The vouchers/requests forwarded by  the applicant-Citibank were to be honoured by the  respondents-TLC and WIPL by conducting themselves in a  manner as stipulated under the agreement.  It is further  stated that the respondents-TLC and WIPL could only have  offered alternative dates or destinations to the customer(s)  after having obtained the consent of the said customer(s)  towards such alterations.

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7.      It is also stated that at the initial stage the operation and  implementation of the Scheme progressed as per the  agreement between the parties.  However, since January, 2006  the applicant-Citibank started receiving complaints from its  eligible customers indicating deficiencies on the part of the  respondents-TLC and WIPL.  Both the respondents seemed to  have started indulging in a number of questionable practices,  such as deliberately not fulfilling/honouring their  commitments which they had made to the eligible  customers/card members in the ’booking confirmation’ by  calling them on the dates close to their travel dates and forcing  them to postpone dates of travel and further pressurizing the  customers/card members into opting for destinations and  dates not preferred/requested for and cancelling the original  ’booking confirmations’.  The applicant-Citibank through  various communications has brought all the complaints to the  notice of the respondents-TLC and WIPL and repeatedly  requested both of them to discharge their commitments  as  contained in the agreement.  It is stated that in spite of  repeated communications being sent by the representatives  and officials of the applicant-Citibank to the respondents-TLC  and WIPL, they merely gave assurances and no actual  measures were undertaken by the respondents to solve such  complaints of the customers. The applicant-Citibank indicated   various instances of breaches of the terms of the agreement  which were being repeatedly committed by the respondents- TLC and WIPL that needed to be remedied, failing which the  applicant-Citibank stood in a position of incurring irreparable  losses, loss of goodwill and reputation along with the  possibility of being subjected to various proceedings that were  being threatened by the affected customers.  The responses  dated 30.04.2006 and 04.05.2006 received from the legal  counsel of respondent No. 1-TLC indicated that the  respondents have found the Scheme to be ’over sold’ and  allegedly to be commercially unviable to honour the  commitments and there was a clear indication in the said  responses of abdication on the part of the respondents-TLC  and WIPL of their responsibilities and obligations under the  agreement inasmuch as new conditions to perform the  obligations were set out which suggested payment of further  amount which was de hors the terms of the agreement itself.    It is also submitted that in the circumstances created by the  respondents-TLC and WIPL, the applicant-Citibank vide its  letter dated 10.05.2006 informed the respondents-TLC and  WIPL of the termination of their involvement under the  agreement w.e.f. 10.05.2006 which was necessitated due to  the acts of omission and commission on their part and  continued loss of goodwill and reputation of the applicant- Citibank. The applicant-Citibank, subsequent to the  termination of the involvement of the respondents-TLC and  WIPL under the agreement, was compelled to take the  remedial action of providing return air-tickets to its eligible  customers/card holders.  In view of the failure of the  respondents-TLC and WIPL to perform their respective  obligations in terms of the agreement and in order to resolve  the disputes, the applicant-Citibank issued a legal notice  dated 15.07.2006 through its counsel to the respondents-TLC  and WIPL, thereby invoking the provisions of Clause 10 of the  agreement dealing with the resolution of disputes which have  arisen between the parties.  The applicant-Citibank in the said  notice suggested the name of Hon’ble Mr. Justice S. P.  Bharucha, Former Chief Justice of India, to act as the sole  Arbitrator.   8.      In response to the legal notice dated 15.07.2006 of the  applicant-Citibank, respondent No. 1-TLC vide its

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communication dated 14.08.2006 and respondent No. 2-WIPL  vide its communication dated 11.08.2006 not only repudiated  the claim of the applicant-Citibank, but also declined to accept  the nomination of Hon’ble Mr. Justice S. P. Bharucha, Former  Chief Justice of India, as the sole Arbitrator.  They  recommended the disputes to be referred to arbitration  comprising of three arbitrators, one nominated by each of the  three parties to the agreement.  They proposed the name of  Hon’ble Mr. Justice M. H. Kania, Former Chief Justice of  India, to be appointed as an Arbitrator. 9.      In the above stated premises, the applicant-Citibank has  now filed the present application praying for the appointment  of sole Arbitrator in terms of the agreement and the law. 10.     In response to the application, respondent No. 1-TLC  submitted that the Scheme offered by the applicant-Citibank  to its qualified card members was not the Scheme contracted  for in the agreement and, therefore, in any event there could  be no liability on respondent No.1-TLC for any alleged loss or  damage under the agreement.  It is stated that the application  is not maintainable inasmuch as no valid notice invoking  arbitration under Section 21 of the Act has at all been issued  and notice dated 15.07.2006 does not even state as to what  are the losses alleged to have been suffered which the  applicant-Citibank seeks to claim in the arbitration  proceedings.  The said notice is very vague as no particular  dispute or claim is sought to be referred to and it does not  state what, if any, losses were caused to the applicant as a  result of the alleged breach of the agreement.  It is also  submitted that the terms of the agreement are limited to the  provisions of warranties, confidentiality, indemnification,  governing law and obligations of parties arising prior to the  expiration or termination.  There is no valid or binding  arbitration clause in existence on and with effect from  10.05.2006, i.e. the date of wrongful repudiation of contract by  the applicant-Citibank, which was accepted by the  respondents, therefore, there exists no dispute that needs  reference to the arbitration. It is contended that the  respondents-TLC and WIPL are separate and different  companies incorporated in different jurisdictions, with  different ownership and control and under no circumstances  can they be treated as one party.  It is clarified that the  applicant-Citibank did not strictly incorporate the terms of  Appendix-V to the agreement in its offer to its card members,  but offered a Scheme in material variation without the consent  of respondent No. 1-TLC, a fact which came to its knowledge  only after the offer was sent out by the applicant-Citibank.   Further, it is stated that the conditions required for  satisfaction of Sections 11(5), 11(10) and 11(12) of the Act are  not satisfied by the applicant-Citibank and, therefore, on the  above-stated premises, the application is liable to be  dismissed.   11.     Shri T. R. Ramachandran, Business Manager-Credit  Cards of the applicant-Citibank in rejoinder affidavit has  reiterated and reasserted the averments made in the  arbitration application and repudiated the defence pleaded by  respondent No. 1-TLC in its counter affidavit.  It is submitted  that notwithstanding the obligations of the respondents-TLC  and WIPL as provided for in the agreement, they had  repeatedly refused to take action to correct the breaches of the  agreement as intimated by the applicant-Citibank.  Further, in  the e-mail dated 21.04.2006 sent by Mr. Sean Langley  (Operations Director), followed by communication dated  04.05.2006 sent through counsel, respondent No. 1-TLC had  offered two "options" for proceeding, each of which would have  modified substantially the prior agreement without addressing

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or correcting the breaches cited by the applicant-Citibank, i.e.  failing to rectify their failure to provide return tickets to the  eligible customers/card members as envisaged under the  agreement and as such the offer in question per se  tantamounts to a fundamental breach of the agreement on the  part of the respondents-TLC and WIPL.  It is also stated that  irrespective of the number of the customers who would have  redeemed their vouchers, in terms of Clause 7 and, in  particular, Appendix-I to the agreement, it was clearly the  responsibility of the respondents-TLC and WIPL to ensure  fulfillment of the Scheme to the satisfaction of the customers. 12.     No counter has been filed by respondent No.2-WIPL.         13.     I have heard learned counsel for the parties and perused  the record. 14.     Mr. R. S. Suri, learned counsel appearing for the  applicant contended that Citibank had received various  complaints from thousands of its eligible customers indicating  series of deficiencies on the part of the respondents-TLC and  WIPL in implementation of the Scheme offering ’Free return  flight voucher’ and ’World for free destinations’ to such  Citibank card- members, who have fulfilled certain specified  criteria on selective domestic air routes in India and the  applicant-Citibank taking serious note of the said complaints,  sent various communications and repeatedly requested the  respondents-TLC and WIPL to comply with the terms of the  agreement, but both the respondents have failed to settle the  dispute amicably.  He submitted that in order to save its  goodwill, reputation and high standards of service and to  mitigate the damages directly resulting from the breach of the  terms of the agreement, the applicant-Citibank was compelled  to take the remedial action of providing return air tickets to its  eligible customers/card members, the expenses of which were,  of course, to be borne by both the respondents as provided in  the agreement and the circumstances created by the  respondents-TLC and WIPL manifestly provided grounds for  termination of the agreement under Clause 23 and having  invoked the arbitration Clause 10, the applicant-Citibank had  issued notices under Clause 24 to both the respondents  requesting them to resolve the disputes/differences under the  Act through a sole Arbitrator in terms of Section 10(2) of the  Act.   15.      Mr. A. K. Ganguli, learned Senior Advocate appearing on  behalf of respondent No.1-TLC, resisted the aforesaid  submissions of Mr. R. S.  Suri.  According to Mr. Ganguli, the  applicant-Citibank has made vague assertion of existence of  dispute and has not identified or pointed out as to what  exactly is the dispute or precise claim, which has arisen for  invoking the arbitration clause, but despite the  communications and representations made by respondent  No.1-TLC to the applicant-Citibank to spell out the disputes  which are referable to arbitration, no valid notice invoking  arbitration clause has at all been issued to the respondent.   He submitted that notice dated 15.07.2006 issued by the  applicant-Citibank is vague as it does not state as to what are  the obligations which were breached and what, if any, loss was  caused as a result of such alleged breaches to the applicant- Citibank.  He next contended that the respondents-TLC and  WIPL are separate and different companies incorporated in  different jurisdictions, with different ownership and control  and under no circumstances can they be treated as one party  as contended by the applicant-Citibank.  He finally prays for  the dismissal of the application.  In support of the submission  that there must be a precise dispute raised by the parties,  reliance is placed in the case of Major (Retd.) Inder Singh  Rekhi v. Delhi Development Authority [(1988) 2 SCC 338].  I

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have the advantage of going through the said judgment in  which it is held by this Court that the existence of dispute is  essential for appointment of an arbitrator under Section 8 or a  reference under Section 20 of the Arbitration Act, 1940.  There  can be a dispute only when a claim is asserted by one party  and denied by other on whatever grounds.  Mere failure or  inaction to pay does not lead to the inference of the existence  of dispute.  Further, it is observed that whether in a particular  case a dispute has arisen or not has to be found out from the  facts and circumstances of the case.  The proposition of law is  well known and well-settled in the cited case but the said  decision does not fully advance the case of the respondents- TLC and WIPL, in any manner, in the facts and circumstances  of the present case.   16.     Mr. Soli J. Sorabjee, learned senior counsel appearing on  behalf of respondent No.2-WIPL, has sought to support the  arguments of Mr. Ganguli.   He made an alternative argument  that if this Court is inclined to accept the prayer of the  applicant-Citibank, then the dispute, if any, arising out of the  agreement dated 04.10.2005 may be referred to an arbitral  tribunal comprising of three arbitrators and  selection/appointment of the third arbitrator may be left to the  choice of the two named arbitrators already nominated by the  applicant-Citibank and the respondents-TLC and WIPL jointly.   I am afraid to accept this submission.   A composition of the  arbitral tribunal comprising of three arbitrators, in my  considered opinion, is not necessary or expedient nor it can be  said to be fair and reasonable in the larger interests of the  parties because such an order may lead to burdening the  parties to bear extra amounts of money in prosecuting the  arbitral proceedings which as per the objectives of the Act are  less expensive and more efficacious remedy to the parties to  settle their disputes. 17.     In the backdrop of the above narrated factual situation  and respective contentions of the parties, the question that  arises for consideration of this Court is whether in view of  the  various communications followed by reminders and legal  notices sent by the applicant-Citibank to the respondents-TLC  and WIPL whereby certain serious instances of complaints  having been received from the eligible customers/card  members regarding deficiencies in services rendered to them  and other disputes/differences as set out in Appendix-II of the  agreement  and also having failed to provide ’Free return flight  voucher’ in relation to "Fly for Sure" programme in accordance  with the provisions of Appendix-I to the agreement, an  arbitration clause contained in the agreement could be  invoked.  18.     The tripartite agreement made by and entered into  between the parties on 04.10.2005 is not in dispute.  The  agreement came into force w.e.f. 01.10.2005 and was valid till  31.08.2006, which could be extended by mutual consent on  such terms as parties mutually agree in writing as per Clause  3.1 of the agreement.  It appears from the record that  respondent No.2-WIPL approached the applicant-Citibank and  expressed its keen desire to be appointed as the Fulfillment  Agency for implementation of ’Free return flight voucher’ and  ’World for Free destinations’ Scheme of the applicant-Citibank  and providing related services to the customers in terms of  Clause 4 of the agreement.   Respondent No. 1-TLC had agreed  to ensure the performance by WIPL of its obligations under  Clause 6 of the agreement.  In terms of Clause 8, on  representation having been made by the respondents to the  applicant-Citibank, the parties had entered into the agreement  on exclusive basis on the terms and conditions contained in  the Appendix(s) and Enclosures attached and incorporated by

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reference as an integral part of the agreement.   In order to  appreciate the controversy in this matter, it is, therefore,  necessary to refer to the relevant clauses of the arbitration  agreement in relation to the dispute or controversies arising  out of the said agreement. Clause 2.2 deals with "Services"  and Clause 2.3 defines "Free return flight voucher", whereas  "World for Free destinations" is defined in Clause 2.4. 19.     Clause 4 of the agreement dealing with "Services" reads  as under:- "4.  WIPL shall be liable and responsible  to provide services to the Citibank and its  customers in accordance with the  provisions of Appendix-I hereto. TLC shall be liable and responsible for  ensuring that WIPL provides the services  to Citibank and its customers in  accordance with the provisions of this  Agreement including Appendix-I hereto."     20.     Clause 7 of the Agreement envisages General obligation  of WIPL and TLC. 21.     Clauses 7.1, 7.2 and 7.2.2 read as under:-  "7.1  WIPL shall be solely responsible to  provide services to Citibank and its  customers in accordance with the  provisions of Appendix-I.  WIPL shall  provide the effective services as per the  Appendix-I to the customers of  Citibank  and act in the interest of both Citibank  and its customers.  WIPL hereby  indemnifies Citibank and shall keep  Citibank safe, harmless and indemnified  from   time   to   time   and   at   all  times hereafter, from and against (i) all loss,  harm and injury suffered or incurred by  Citibank, (ii) all claims, demands,  customer complaints, suits, actions  and/or proceedings either civil or  criminal in nature, made or adopted  against Citibank and (iii) all costs,  charges and expenses suffered or  incurred by Citibank directly or indirectly  on account of or as a consequence of  WIPL failing to fulfill any of its obligations  under this Agreement and/or failing to  fulfill all or any of its responsibilities and  obligations under this Agreement and  Appendix-I hereto.

7.2     WIPL and TLC hereby undertake to be  solely liable and responsible, to the  exclusion of Citibank, for all claims,  demands, disputes, suits, actions and/or  proceedings either civil or criminal in  nature arising out of non-fulfillment of  any of their obligations or responsibilities  arising under this Agreement and the  Appendix-I hereto.

7.2.2   \005\005\005\005\005\005\005\005\005\005\005\005\005\005\005\005\005\005\005\005..

WIPL shall be solely and absolutely  responsible for providing the Services and  for issuing the free return flight vouchers  in accordance with the provisions of  Appendix-I, to the customers of Citibank

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as also for ensuring that the carriers with  which it has entered into any  arrangements in pursuance of this  Agreement, strictly comply with their  obligations and accept the honour of all  return free flight vouchers issued to the  customers of Citibank in pursuance of  this Agreement."   

22.     Clause 10 of the agreement is the arbitration clause,  which is to the following effect:- "10.   The parties hereby agree that any  controversy, claim or dispute arising out  of the interpretation, application or in  connection with this Agreement which  cannot be resolved amicably, shall be  conclusively resolved by arbitration  under Indian Arbitration and  Conciliation Act, 1996 and any  amendments made thereto.  The place of  arbitration shall be Mumbai and the  arbitration shall be conducted in  English language only.  This Agreement  shall be governed by Indian Laws and  shall be amenable to the exclusive  jurisdiction of courts in Mumbai only."

23.     Clause 23 deals with "Termination of the  Agreement" and reads as under:- "23.   Termination \026 Citibank may  terminate this Agreement upon 30 days’  prior notice to WIPL and TLC in this  behalf.   

In the event that either Citibank on the  one part and WIPL and TLC on the other  part shall, at any time during the term of  this Agreement, commit any material  breach of any requirement, obligation and  covenant and warranty herein contained,  and shall fail to remedy such breach  within 7 (seven) days after written notice  thereof, the other party(ies) may at  its/their discretion, and in addition to  any other remedy that might be available  in law or equity, terminate this  Agreement by written notice to such  effect\005\005\005"

24.     Clause 24 of the agreement prescribes giving of notice by  either party.   25.  The obligations and responsibilities on the part of the  parties to the agreement are incorporated in Appendix-I, which  inter alia envisaged that respondent No. 2-WIPL shall be liable  and responsible for ensuring that it would provide the required  services to the applicant-Citibank and its eligible  customers/card members in accordance with the terms of the  agreement.  The satisfactory service to be rendered by the  respondents-TLC and WIPL was the material obligation on  their part as per the terms of the agreement and it was a pre- requisite condition that the applicant-Citibank would pay a  commission of cost of tickets in terms of  Appendix-II to the  agreement.  Further, the respondents-TLC and WIPL jointly  and severally undertook to indemnify the applicant-Citibank  from and against all costs, charges and expenses suffered or

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incurred by the applicant-Citibank, directly or indirectly, on  account of or as a consequence of the respondents-TLC and  WIPL failing to fulfill any of their responsibilities and  obligations under the agreement read with Appendix-I thereto.   Under the "Fly for Sure" programme envisaged in the  agreement, 35,000 card members of the applicant-Citibank  were found to be eligible to avail the opportunity of the ’Free  return flight voucher’ to be provided by respondents-TLC and  WIPL.  The applicant-Citibank forwarded the vouchers  completed by the eligible and interested card members to  respondent No. 2-WIPL in accordance with the procedure as  agreed by the parties.  The vouchers/requests forwarded by  the applicant-Citibank were to be honoured by the  respondents jointly by conducting themselves in a manner as  stipulated under the agreement, including issuing ’return air- tickets’ towards any one of the three dates, for any one of the  three destinations, as indicated by the customers.  The  respondents-TLC and WIPL could only have offered further or  other alternative dates or destinations to the customers and  35,000 card members after having obtained their consent  towards such alterations.  The material documents placed on  record would show that the applicant-Citibank requested the  respondents-TLC and WIPL to comply with the terms of the  agreement in regard to the complaints of eligible customers  indicating series of deficiencies in services on the part of the  respondents-TLC and WIPL.  However, in spite of repeated  communications being sent by the representatives and officials  of the applicant-Citibank to the respondents-TLC and WIPL,  they merely made assurances and no actual measures were  undertaken by them to rectify their acts of omission and  commission. The applicant-Citibank in various  communications (copies whereof are placed on record of these  proceedings) including courier \026 e-mail notice dated  10.05.2006 (Annexure A-8) has given specific instances of  disputes and differences that have arisen between the  applicant-Citibank on the one hand and the respondents-TLC  and WIPL on the other hand which are to be resolved by the  arbitral tribunal in terms of the arbitration Clause 10 of the  agreement.  Legal notice dated 15.07.2006 (copy Annexure A- 9) as envisaged under the agreement and the provisions of the  Act has been issued by the legal firm of the applicant-Citibank  to the respondents-TLC and WIPL suggesting the name of  Hon’ble Mr. Justice S. P. Bharucha, Former Chief Justice of  India, to be appointed as the sole Arbitrator.  In response  thereto, respondent No.2-WIPL vide registered A.D. \026 fax - e- mail - courier dated 11.08.2006 denied all the allegations of  the applicant-Citibank averred in the said communications  and notice dated 15.07.2006.  Respondent No.2-WIPL also  stated that all the alleged allegations made in the notice or  made by way of any prior correspondence shall be dealt with  by it by way of a comprehensive reply or by way of a counter  claim, if any arbitration proceedings are likely to be initiated  by the applicant-Citibank. Respondent No.2-WIPL, however,  recommended that the disputes be referred to an arbitral  tribunal comprising of three arbitrators to be nominated by all  the three parties to the agreement, namely, the applicant- Citibank and the respondents-TLC and WIPL respectively.   Respondent No.2-WIPL, however, nominated Hon’ble Mr.  Justice M. H. Kania, Former Chief Justice of India, as its  nominee.   26.  Respondent No. 1-TLC in its reply dated 14.08.2006 to  the notice dated 15.07.2006 sent by the Solicitors on behalf of  the applicant-Citibank, denied the unsubstantiated allegations  of non-fulfillment or breach of any obligation by it under the  agreement dated 04.10.2005 entered into between the parties.  

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In reply, respondent No. 1-TLC states that notice invoking an  arbitration is not valid as the same does not comply with the  requirement of Section 21 of the Act applicable in India as it is  completely unclear from the contents of the notice as to what  disputes the applicant-Citibank has sought to be referred to  the arbitration and the applicant-Citibank first should provide  quantification of its alleged claims and disputes.  However,  respondent No.1- TLC agrees to the suggestion of respondent  No.2-WIPL for appointment of arbitral tribunal comprising of  three members, one each to be appointed by the parties to the  agreement.   27.  As noticed above, the disputes arising out of the  arbitration agreement between the parties are covered under  the definition of "international commercial arbitration" in  terms of Section 2(f) of the Act.  The parties have entered into  an arbitration agreement as provided under Section 7 of the  Act.  Section 10(1) of the Act provides that the parties are at  liberty to determine the number of arbitrators provided such  number shall not be an even number.  In default of  determination referred to in sub-section (1), the arbitral  tribunal shall consist of a sole arbitrator in terms of Section  10(2) of the Act.  Section 21 of the Act lays down that unless  otherwise agreed by the parties, the arbitral proceedings in  respect of a particular dispute would commence on the date  on which a request for that dispute to be referred to  arbitration is received by the respondent. 28.    The contract is a commercial document and must be  interpreted in a manner to give efficacy to the contract rather  than to invalidate it.  Narrow technical approach is not proper.   The above-extracted Clause 10 of the arbitration imports in  itself all disputes and the arbitration agreement cannot be said  to be as vague or uncertain as to be unenforceable.  In Clause  10 of the agreement, the words "any controversy, claim or  dispute arising out of the interpretation, application or in  connection with this agreement which cannot be resolved  amicably" could embrace within its fold all matter which can  legitimately arise in connection with the agreement.  The  arbitration clause does not put any cap on the powers of the  arbitrator to decide any particular claim or counter claim, the  details of which shall be submitted by the parties in their  pleadings before the arbitrator.  The words contained in  Clause 10 are wide enough and as the question turned upon  the true interpretation of the contract and the parties have to  take recourse to the contract to establish their claim and  counter claim, if any, having regard to the fact that the  existence of an agreement is not denied and that there has  been an assertion of claim by the applicant-Citibank in the  forms of letters and notices issued to the respondents and  responses of TLC and WIPL thereto, the matter would be  arbitrable.  The conduct of the respondents-TLC and WIPL  would show that on receipt of the communications and notices  of the applicant-Citibank, the same were not rejected outright  by them.  The existence of arbitration agreement was accepted  and the matter, if any, was suggested to be referred to an  arbitral tribunal of three members, one to be appointed by  each party. 29.   In view of the instances of breaches of the terms and  conditions of the relevant clauses of the agreement coupled  with the breaches of specific obligations and responsibilities  contained in the Appendix(s) and Enclosures attached and  incorporated by reference as an integral part of the agreement  and having regard to the words used in Clause 10 of the  agreement and having regard to the fact that the parties have  failed to determine an even number of arbitrators as per the  provisions of Section 10(1) of the Act, the requirement of

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Section 10(2) of the Act is fully attracted in the present  proceedings, in other words, the arbitration agreement deemed  to be one providing for a sole arbitrator.       30.  In the above-said circumstances, taking into  consideration the fact that the disputes and differences  between the parties emanating from the contract are required  to be resolved through arbitration, Hon’ble Mrs. Justice Sujata  V. Manohar, retired Judge of this Court, is hereby appointed  to act as a sole Arbitrator.   31.   The Arbitration Application, accordingly, stands disposed  of.  There will be no order as to costs.