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Case Title: BMG GULF FZC Versus QUIPPO OIL AND GAS INFRASTRUCTURE LIMITED

Case No: AP-COM/327/2024 [Old case no. AP/359/2023]

Decided on: 3rd May , 2024

Quorum: The Hon’ble JUSTICE RAVI KRISHAN KAPUR

Facts of the case

An oil drilling rig was leased to Quippo Oil and Gas Infrastructure Ltd., an Indian firm with its headquarters in Kolkata, by BMG Gulf FZC, a UAE corporation. A legal disagreement resulted from BMG Gulf’s accusation that Quippo had not returned or paid for the rig after the lease was terminated. One oil and gas drilling rig and related equipment were included in the lease agreement. Following the lease termination, BMG Gulf asserted that Quippo had failed to return or pay for the rig. The parties’ disagreement resulted in a court dispute.Section 2(f) of the Arbitration & Conciliation Act, 1996 defined an international commercial arbitration, and as BMG Gulf is a firm incorporated under UAE law, the conflicts fit that description. According to the Act, the exclusive authority to designate an arbitrator is the Chief Justice of India or a delegate acting on their behalf. Utilization Section 11: A request was made in accordance with Act’s Section 11 in front of the High Court. The Calcutta High Court ruled, however, that the application was misguided and unmaintainable. The Court underlined the value of using straightforward language to improve the institution’s reputation, citing the ruling in Madura Coats Ltd. vs. Dunlop India Ltd.

Issues

1 .Was it maintainable to file an application under Section 11 of the 1996 Arbitration and Conciliation Act?

2.Which legal provisions came into play in this particular case? What claims did the appellant make?

3.What claims did the respondent make?

4.What was the Calcutta High Court’s ruling in this case?

Legal Provisions

According to section 2(f) of the Act, the court determined that the disagreements between the parties qualified as international commercial arbitrations. Under the Act, the only person who can name an arbitrator is the Chief Justice of India or a delegate acting on their behalf.The Arbitration & Conciliation Act, 1996 was reviewed by the court, with special attention to section 11. It made clear that the Act’s exclusive authority to name an arbitrator rests with the Chief Justice of India or his designee.

Appellants Contentions

BMG Gulf maintained the validity of the application in front of the High Court.As the appellant, BMG Gulf contended that the application was legitimate and maintainable, having been submitted under Section 11 of the Arbitration & Conciliation Act, 1996. They argued that the parties’ disagreements qualified as international commercial arbitrations under section 2(f) of the Act. BMG Gulf stressed that they have the right to use the appropriate legal channels to request the appointment of an arbitrator.

Respondents contention

Quippo argued that the application was not maintainable and had been designed incorrectly.India’s Kolkata is home to the respondent, Quippo Oil and Gas Infrastructure Ltd. They were parties to a lease for an oil drilling rig with BMG Gulf FZC. The respondent reportedly failed to return the equipment or make any payment after the lease was terminated. It was decided that the respondent had broken the agreement by acting in this way.

Court Analysis and Judgement

The Calcutta High Court ruled that it lacked jurisdiction to consider the Section 11 application. The Court stressed that dishonest and unscrupulous litigants shouldn’t take advantage of the system. It cited the ruling in Madura Coats Ltd. Vs. Dunlop India Ltd. And emphasized the need for straightforward communication to improve the institution’s reputation.

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Judgement Analysis Written by – K.Immey Grace

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