Jamuna Resort Ltd. Vs. Bangladesh Bridge Authority 2017 (1) LNJ 226

Case No: Civil Revision No. 984 of 2015

Judge: A. K. M. Shahidul Huq.. J.

Court: High Court Division,

Advocate: Mr. Rafique-ul-Huq, Mr. Abdun Nur,

Citation: 2017 (1) LNJ 226

Case Year: 2016

Appellant: Jamuna Resort Ltd.

Respondent: Bangladesh Bridge Authority

Subject: Civil Law

Delivery Date: 2017-04-12

HIGH COURT DIVISION

(CIVIL REVISIONAL JURISDICTION)

Farid Ahmed, J

And

A. K. M. Shahidul Huq, J

Judgment on

28.07.2016

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Jamuna Resort Limited represented by its Managing Director Pragati Insurance Bhaban (7th Floor), 20-21, Kawran Bazar, Dhaka-1215.

. . . Petitioner

-Versus-

Bangladesh Bridge Authority Bridge Division, represented by its Executive Director Setu Bhaban, Banani Dhaka-1212.

...Opposite parties

Arbitration Act (I of 2001)

Sections 7 Land 12(4)(7)

The learned Court most illegally held that as the petitioner did not exercise the provision of section 12(4) of the Arbitration Act, 2001 for appointment of arbitrator within 30 days of receipt of notice by the opposite party, no order of injunction can be granted under section 7L of the Arbitration Act, 2001 for their benefit. Whereas the said section 12(4) is not at all applicable to the petitioner as the same only applies when there is no agreed procedure for appointment of arbitrator, and as the arbitration clause 35.2 of Concession Agreement contains procedure for appointment of arbitration, the applicable provision is section 12(7) which does not contain any time frame for approaching the Court.                                         . . . (52)

Arbitration Act (I of 2001)

Sections 7L, 44 and 45

The learned Court below failed to consider that the learned Court has power to pass interim order under section 7L of the Arbitration Act, 2001 for preserving the subject matter of the arbitration before, during or after the arbitration proceedings and until enforcement of the award under section 44 or 45 of the said Act.        . . . (53)

A.M Mostafiz Miah Vs. United Commercial Bank Ltd. and others, 4 CLR (High Court Division 2016) 150; Miss Jinnatun Ara and others Vs. Govt. of the People’s Republic of Bangladesh represented by the Ministry of Law and Justice and Parliamentary Affairs and others, 15 MLR (AD) 185; Banesa Bibi Vs. Senior Vis-President and others, 63 DLR (AD) 181; Crown Merit Time Company Ltd. Vs. Royal Boss Kalis, 16 BLC (HD) 140 ref.

Mr. Rafique-Ul Huq, Senior Counsel with

Mr. Margub Kabir, and

Mr. Md. Abbas Uddin, Advocates

. . . For the petitioner

Mr. Md. Abdun Nur, Advocate

. . . For the opposite party.

JUDGMENT

Mr. A.K.M. Shahidul Huq, J:  This Rule was issued calling upon the opposite party to show cause as to why the impugned judgment and order dated 22.4.2015 passed by the learned District Judge, Dhaka in Arbitration Miscellaneous Case No. 239 of 2015 refusing to stay operation of the Notice of cancellation No. 50.105.109.00.00.085 (i-4).191 dated 01.04.2015 should not be set aside why the opposite party should not be directed to allow the petitioner to continue its business in the schedule land as per the concession Agreement dated 21.11.1999 and also why the opposite party should not be restrained by an order of injunction from taking possession of the schedule land till disposal of Arbitration Proceedings and/or such other or further order or orders passed as to this Court may seem fit and proper. 

2.            The short facts leading to the disposal of the rule is that the petitioner is a Joint Venture Company Act 1994. The company was incorporated in association with foreign investors namely Sunrise Berhad and Country Heights Group of Malaysia, Chowdhury Group of Nepal and local associates in Bangladesh. It is duly approved by the Board of Investigation of Bangladesh under Registration No. 9909060-H dated 28.9.1999.

3.            Bangladesh Bridge Authority which was previously known as Jamuna Multipurpose Bridge Authority, Bridge Division, Ministry of Road Transport and Bridges, Government of Bangladesh. The opposite party, being the owner of the Specified Sites on East ends of Bangabandhu Bridge and with intent to develop the same for tourism in the specified land area and housing thereon, invited International Competitive Bidding (ICB) through tender published nationally and internationally. The petitioner vide Bid Document and Letter of Intent dated 23.07.1998 participated in the tender which was accepted by the opposite party.

4.            The petitioner and the opposite party after the successful entered into the Concession Agreement on 21.11.1999 to develop, manage, operate and maintain specific areas referred to as Sites in the concession Agreement (hereinafter referred to as the said concession Agreement) for thirty (30) years.

5.            The opposite party as per clause 3 of the concession Agreement, was obligated of handover all the houses, facilities and land measuring 139.86 hectares immediately after signing of the Concession Agreement and thereafter a Certificate of Satisfaction were to be issued jointly in writing expressing that the possession and rights in land have been secured to the extent necessary to enable the petitioner to commence preparing detailed building plans, architectural drawing and site survey. However admittedly the opposite party failed to handover the Sites to the petitioner immediately upon signing of the said Agreement as the 98 Composite Bridge of Bangladesh Army was stationed within the site. The opposite party wrote letter No. he‡mK/m`/cÖt /1-3/99-502 dated 30.10.2000 to the Ministry of Defence, Government of Bangladesh requesting them to transfer the possessed land of the Concession Agreement to the petitioner.

6.            The Concession Agreement although has been executed on 21.11.1999 admittedly the opposite party handed over possession of the land on various dates in 2001, 2002, 2006, 2007 and 2009. The details of the handover are provided below:-

Sl.

Name of Area

Date of Handover

Quality of Land in bector

01

E-2

30.07.2002

6.10

02

E-2

04.10.2006

0.40

03

E-2

09.08.2007

0.1404

04

E-2

23.08.2009

0.0806

05

E-1

05.07.2001

2.31

06

E-1

20.09.2006

5.67

 

 

 

14.70

 

7.            The opposite party even though failed to handover possession of the land at the time of signing of the Concession Agreement, the opposite party most illegally demanded from the petitioner a Certificate of Satisfaction as per clause 3 effective from the date of signing of the said Concession Agreement. The petitioner submitted the Certificate of Satisfaction on 30.04.2007 duly signed mentioning that the same shall be effective from the date of completion of handover of all land and facilities as per the terms of the Concession Agreement. Further, the opposite party most illegally also sought rent from the petitioner from the date of execution of the said Concession Agreement, even though admittedly they failed to handover exclusive possession of the Site immediately after signing of the said Concession Agreement.

8.            The Memorandum of Agreement on 08.05.2002 was entered by the petitioner taking its own initiative negotiated with the Army and Army agreed to move to a specified/allotted area which the Army would possess and pay rent. The Army agreed to vacate only some of the areas for the applicant’s use and possession. Even today, the Army is using five hectares of land at E-2 and E3 area designated for the petitioner and also fifty percent equivalent to nine point five hectares.

9.            The development work as provided in the Concession Agreement was conditioned upon the opposite party handover possession of the entire Site of the petitioner upon signing of the said Agreement. After getting possession of some of the areas of the Sites, the petitioner submitted 1st phase Development of the project to the opposite party as per clause 31.2 of the Concession Agreement, which provides that the petitioner is required to obtain approval of the opposite party for its detailed development proposals prior to their implementation, which approval shall not be unreasonably withheld by the opposite party. The petitioner thereafter, as an when it received possession of land from the opposite party, submitted development plans to the opposite party for approval, However, the opposite party in complete violation of the said clause, most unreasonably neither approved the development plan nor did it state the reason for the delay, resulting in substantial loss of money and time of the petitioner.

10.        Admittedly the opposite party handover possession of the land on various dates in 2001, 2002, 2006, 2007 and 2009.

11.        Even though failed to handover possession of the land at the time of signing of the Concession Agreement, the opposite party most illegally demanded from the petitioner a Certificate of Satisfaction as per clause 3 effective from the date of signing of the said Concession Agreement. The petitioner submitted the Certificate of Satisfaction on 30.04.2007 duly signed mentioning that the same shall be effective from the date of completion of handover of all land and facilities as per the terms of the Concession Agreement.

12.        The  petitioner took initiative to resolve the issues of rent and delay in approval with the Ministry of Communication vide their letters dated 03.05.2003, 16.10.2003 and 22.09.2004 addressed to Secretary of the Ministry of Communication, who eventually took up the matter with the Parliamentary Standing Committee. The Parliamentary Standing Committee advised the opposite party to approve the development plan vide their letter dated 25.10.2004 after they were convinced that the opposite party unreasonably kept pending development plan submitted by the petitioner. The Committee further directed the opposite party to settle the dispute of rent as soon as possible and asked the petitioner to make none-off  payment of Tk.1,00,00,000.00 (Taka one crore) only and Tk.100,000.00(Taka ten lacs) only per month till the dispute of rent is settled. The said decision of the Parliamentary Standing Committee was communicated to the petitioner vide letter dated 26.10.2004. Accordingly, the petitioner completed the 1st phase development after investment of huge amount and was only able to start commercial operation of the project on 26.01.2006.

13.        The petitioner vide its letter dated 17.08.2005 submitted a design for construction of Holiday Homes which was approved by the opposite party on 23.02.2006.Thereafter, upon application of the petitioner, the opposite party on 18.12.2006 approved construction of Holiday Homes by third parties as per clause 6.c. of the Concession Agreement. After obtaining the relevant approvals, the petitioner sub-leased 46 plots to different parties, one of whom already completed construction of holiday homes. However, the opposite party did not allow them  to use their completed Holiday Homes and vide letter dated 18.01.2010 advised the petitioner not to sub-lease further plots to third parties or develop or construct any further Holiday Homes at the said area, although the petitioner by that time has already invested around Tk. 10 crore to develop the area for use by third parties including road construction, fencing, plantation and landscaping and claimed the same vide their letter dated 04.04.2010.

14.        The petitioner regularly corresponded with the opposite party and raised its grave concerns and requested the opposite party to comply with the terms and conditions of the Concession Agreement without success. In such situation, being aggrieved by malafide conducts of the opposite party time and again, the petitioner was compelled to send notice dated 30.04.2007 under clause 35.2 of the Concession Agreement to settle dispute amicably. The said clause provides as follows:-

“In the event of any dispute or difference of opinion between the OWNER and the CONCESSONARIE  upon or in relation to or in connection with this agreement with regard to the performance of any obligations hereunder by either parties, both parties shall exert best efforts to settle such disputes or difference of opinion amicably by negotiation. Any dispute or differences  of opinion which cannot be amicably settled by negotiation between the parties within a period of three months from when the dispute was first raised by any party shall be submitted before a panel of three arbitrators one to be appointed by each of the parties of this agreement and the third to be appointed by the two arbitrators who have been appointed by the parties and in the event of any disagreement, the disputes will be settled in accordance with provisions of The Arbitration Act, 1940.”

15.        The opposite party formed a Committee headed by Director Admin to resolve the pending issues between the parties. The Committee organized a meeting on 29.01.2008 where the following decisions were taken:-

(1)  h¡­pL J ®SBlHm j­dÉ ü¡r¢lahÉ Certificate of Satisfaction   03/05/2000 a¡¢lM q­a L¡kÑLl q­hz a­h ®SBlHm La«ÑL h­Lu¡ pj¤cu f¡Je¡ V¡L¡ f¢l­n¡d p¡­f­r Hhw h¡­pL Hl fСfÉ j¡¢pL i¡s¡ f¢l­n¡d p­¿¹¡oSeL q­m Grace period ¢q­p­h Concession Agreement Hl ®ju¡c  5(fy¡Q) hvpl hª¢Ü Ll¡ ®k­a f¡­l, Hhw

(2)  Grace period ¢q­p­h Concession Agreement Hl ®ju¡c 5(fy¡Q) hvpl hª¢Ü kb¡kb J NËqZ­k¡NÉ L¡lZ Certificate of Satisfaction  H ¢hÙ¹¡¢la J p¤¢eÑ¢cøi¡­h E­õM Ll­a q­hz

16.        The opposite party yet again did not act as per the above decision and in such situation the petitioner was compelled to invoke arbitration against the opposite party vide letter dated 17.06.2008. The opposite party appointed Mr. Md. Abdun Nur, Advocate, Supreme Court of Bangladesh as their arbitrator, which was intimated to the petitioner vide letter ph­pL/fÐx /H­ØVV-85/2006 (i-2)-789 dated 18.12.2008. However, the Chairman was not appointed by the arbitrators because the opposite party vide letter dated 24.01.2011 informed that they do not intend to arbitrate the matter and instead wish to settle the disputes mutually after proper discussion.

17.        In the meantime, the petitioner submitted revised design for the construction of Golf course which was subsequently, after an inordinate delay, approved on 02.11.2014. In reliance of the approval, the petitioner entered into an agreement with Global Impact Ltd. a foreign company to undertake the construction of the Golf course. The opposite party, most unlawfully and contrary to the said Concession Agreement, orally and physically did not allow the construction work to proceed even though they had given written approval which is evident from letter of the petitioner dated 07.01.2015.

18.        There after the petitioner in numerous occasions attempted to resolve the disputes amicably, however, as in the past, the opposite party failed to co-operate in any manner resulting in failure to settle the matter amicably. In such situation, the petitioner sent a Notice of Arbitration on 27.04.2014 under clause 35.2 of the said Concession Agreement to refer the all the disputes existing between the parties to arbitration. In the said Notice of Arbitration, the petitioner appointed Mr. Zafarullah Chowdhury, Barrister-at-Law as arbitrator and requested the opposite party to appoint their arbitrator. On 02.12.2014, the top officials of both the parties had a meeting where they agreed to refer the aforesaid dispute to arbitration and also agreed to renew the said Concession Agreement for a further period. The said decision was communicated vide letter dated 09.12.2014. Thereafter, the petitioner sent reminder letter to the opposite party vide its letters dated 19.03.2015 to appoint arbitrator, however the opposite party did not appoint any arbitrator. Thereafter, the petitioner as final notice lastly on 16.04.2015 issued a letter being letter No. JRL/BBA 1208/2015 to the opposite party intimating the commencement of the arbitration under section 27 of the Arbitration Act, 2001 and requested to appoint arbitrator within seven days, failure of which they were informed that an application under section 12 of the Arbitration Act, 2001 shall be filed before the learned  Court for appointment of arbitrator on its behalf.

19.        All on a sudden the opposite party most illegally issued a Show Cause Notice No. 50.105.109.00.00.085(i-4).191 dated 16.03.2015 upon the petitioner as to why the Concession Agreement shall not be cancelled for default in payment of rent, delay in implementing development work and delay in execution of Certificate of Satisfaction. The said Show cause notice was given in express violation of the provisions of the Concession Agreement particularly clause 10.3 which provides that if the petitioner  defaults on payment of due amounts to the opposite party for the concession of the Sites during the concession period or on the implementation of the Phase -1  development within one year or on the implementation of the phase-2 development within five (5) years, the opposite party shall give the petitioner three months written notice to remedy the said default. The said clause 10.3 is provided below:-

“IF CONCESSIONAIRE defaults on payment of due amounts in the OWNER for the concession of the Sites during the concession period or on the implementation of the phase-1 development within one year or on the implementation of the phase-2 development within five (5) years, the CONCESSIONAIRE’s Concession Agreement shall be subject to termination by the OWNER without compensation and the rights in all facilities, whether partially or fully complete, shall revert to and vest with the OWNER. The OWNER shall give the CONCESSIONAIRE three months written notice of its intention and reason to terminate the Concession in order to give an opportunity to remedy any default”

20.        Even then, the opposite party most illegally without giving the specified three months notice of remedy, as required under the said clause 10.3, gave only seven days notice for termination of the Concession Agreement. The petitioner gave a detailed written reply dated 23.03.2014 to the said show cause notice and expressly sought for an opportunity of hearing. In the said Reply, it was categorically mentioned that the show cause notice has been issued in violation of the said clause 10.3 and the Concession Agreement. Further, the opposite party was reminded that the disputes have already been referred to arbitration vide Notice of Arbitration dated 27.04.2015 and requested to participate in the said arbitration for resolution of the disputes. The opposite party, without giving the petitioner any opportunity of hearing most illegally issued the Notice of Cancellation No. 50.105.109. 00.00. 085(i-4).191 dated 01.04.2015. Thereafter, the foreign investor of the petitioner namely Rahul K. Chaudhury of Chaudhary Group of Nepal, vide letter  dated 18.04.2015 requested the opposite party to restrain from cancelling the Concession Agreement arbitrarily drawing particular attention to clause 17.1 of the said Agreement which accords full protection and benefit of the Foreign Investment  Act to the said foreign investor.

21.        Thereafter as the arbitration has already commenced by issuance of Notice of Arbitration dated 27.04.2014, the petitioner immediately filed an application under section 7L of the Arbitration Act, 2001 being Arbitration Miscellaneous Case No. 239 of 2015 praying for stay  of the Notice of cancellation and restraining the opposite party from taking possession of the Schedule property. Upon hearing, the learned Court was pleased to pass order dated 02.04.2015 directing the parties to maintain status quo with regard to termination of Concession Agreement till further order. The relevant part of the order dated 02.04.2015 is quoted below:-

“Heard, The Arbitration Misc. Case is admitted for hearing. Issue notice upon the O.P. fixing 12.5.15 for S.R. and A.A.

Further heard the learned lawyer for the Petitioner, perused the petition filed under section 7A of the Arbitration Act, 2001 and documents on record. Issue notice upon defendant asking him to show cause within 7 days from the date of receipt of this notice as to why he shall not be restrained by an order of injunction from terminating the Concession Agreement dated 21.11.1999. In the meantime, both the parties are directed to maintain status quo with regard to terminating of the concession of agreement till further order”

22.        The opposite party filed an Application for vacating the order of status-quo and Written Objection to the Application of the petitioner under section 7L of the Arbitration Act, 2001. The petitioner filed Written Objection to the Application of the opposite party for vacating the order of status-quo. The certified copies of the Application for vacating the order of status-quo.

23.        Thereafter the learned Court of District Judge, Dhaka heard the parties on 20.04.2015 and vide judgment dated 22.04.2015 most illegally dismissed the Arbitration Miscellaneous Case No. 239 of 2015.

24.        Mr. Rafique-ul Huq, the learned Senior Counsel appearing with Mr. Margub Kabir, the learned Advocates appearing on behalf of the petitioner while Mr. Md. Abdun Nur, the learned Advocate appearing on behalf of the opposite party.

25.        Mr. Rafique-ul Huq, the learned Senior Counsel appearing for the petitioner submits that the learned Court in rendering the judgment considered the following:

(i)     The Concession Agreement contained an arbitration clause.

(ii)   Dispute arose between the parties with regards to handing over the possession of the schedule land, rent of the schedule property, issuance of Certificate of Satisfaction as well as with regard to approval of development plan and its implementation.

(iii) The petitioner issued Notice of Arbitration upon the opposite party referring the dispute to arbitration and requesting them to appoint arbitrator.

26.        Section 27 of the Arbitration Act, 2001 provides that where there is an arbitration agreement and one of the parties issues a notice upon the other party referring the dispute to arbitration or requests the other party to appoint arbitration, it shall be deemed that the arbitration has commenced. Section 12 is quoted below:-

Commencement of arbitral proceedings–Unless otherwise agreed by the parties, the proceedings shall be deemed to have commenced if–

(a)   Any dispute arises where the concerned arbitration agreement applies, and

(b)   Any party to the agreement–

(i)     Has received from another party to the agreement a notice requiring that party to refer, or to concur in the reference of the dispute to arbitration ; or

(ii)   Has received from another party to the agreement a notice requiring that party to appoint an arbitral tribunal or to join or concur in, or approve the appointment of, an arbitral tribunal to relation to the dispute.

27.        He next submits that in the instant case, the petitioner admittedly served the Notice of Arbitration dated 27.04.2014 to the opposite party referring the disputes to arbitration and further informing them about appointment of Mr. Md. Zafarullah Chowdhury as their arbitrator and requesting the opposite party to appoint its arbitrator. Even then, the learned Court in complete contravention of section 12 of the Arbitration  Act, 2001 committed error or law in holding that no arbitration has  commenced between the parties and hence the petitioner is not entitled to relief under section  7L of  the said Act. As such, the said judgment dated 22.04.2015 is liable to be set aside having been rendered in serious error of law occasioning failure of justice.

28.        Learned Advocate further submits that the learned Court committed serious error of law in holding that as the petitioner did not  file an application under section 12 of the Arbitration Act, 2001 for appointment of arbitrator  within thirty days from the date of receipt of notice by the opposite party, there is no arbitration proceeding and in such total absence of legal proceeding for starting an arbitration, the court cannot make an order of injunction under section 7L of  the Arbitration Act, 2001 for an uncertain  period of time. The learned Court failed to consider that the obligation to file an application under section 12 within 30 days arises in cases where there is no agreement on the procedure for appointment of arbitrator. In the instant cause, the arbitration clause specifically provides the procedure for appointment of arbitrator i.e it states that each party shall appoint one arbitrator and the arbitrators so appointed shall appoint the Chairman. As such, section 12(4) is not applicable and hence there is no requirement to file an application under section 12 within 30 days. The applicable provision for the petitioner is section 12(7), which does not contain any specific timeframe. As such, the petitioner has not violated or failed to take any tangible initiative of arbitration. In fact, the petitioner has been in constant communication with the opposite party requesting them to appoint arbitrator lastly on 16.04.2015.

29.        He also submits that the learned Court committed serious error of law rendering the judgment and order dated 22.04.2015 by most illegally failing to consider that section 7L of the Arbitration Act, 2001 has been enacted for preserving the subject matter of the arbitration to empower the learned Court to pass interim order for preservation of the subject matter of dispute before, during or after the arbitral proceedings and until enforcement of the award under section 44 or 45 of the said Act. Admittedly there is an arbitration clause in the Concession Agreement and as such any dispute between the parties can only be resolved by way of arbitration. Admittedly there are disputes between the parties which the petitioner has referred to arbitration. At this stage, the opposite party most illegally issued the Notice of Cancellation dated 01.04.2015 and sought handover, of the project and Schedule land from the petitioner. In  such situation, the petitioner filed the application  under section 7L of  the said Act for preservation of the subject matter of the arbitration by staying operation of the Notice  of Cancellation and restraining the opposite party from taking possession of the scheduled land. The learned Court being satisfied passed the order of status quo dated 01.02.2015 but thereafter most illegally dismissed the Arbitration Miscellaneous Case. 239 of 2015 vide judgment and order dated 22.04.2015. At this stage, unless the Notice of Cancellation No. 50.105.109.00.00.085(i-4).191 dated 01.04.2015 is stayed  and the petitioner is allowed to continue its business in the Schedule land as per Concession Agreement dated 21.11.1999, then the subject matter of the arbitration i.e. the said Concession Agreement and the Site/ Scheduled Property, will be lost and  the purpose of the arbitration shall be frustrated as the subject matter will no longer remain for effective determination through  arbitration. The loss of subject matter shall mean the petitioner losing its entire established business causing irreparable loss and injury without a fair adjudication of the dispute.

30.        Learned Senior Counsel also submits that the learned Court committed serious error of law in failing to hold that the opposite party in clear violation of clause 10.3 of the Concession Agreement issued the Notice of Cancellation No. 50.105.109.00.00.085(i-4). 191 dated 01.04.2015. The opposite party issued the said Notice of Cancellation for default in payment of rent and failing to carry out development work within seven days of issuance of the show cause notice. Clause 10.3 expressly provides that the Concession Agreement can ONLY be terminated, in case of default in rent payment or delay in development work, upon giving three (3) months time to the petitioner to remedy the defect. In the instant case, the opposite party most illegally did not issue any notice of remedy or provide any time to the petitioner to remedy the defect as required under clause the said 10.3 instead it most illegally issued the Notice of Cancellation.

31.        He further submits that the petitioner is Joint-Venture Company, having foreign shareholders, conducting its business since 1999 with integrity and always performed the obligations under the said Concession Agreement. Without the interim measure of protection, the petitioner shall suffer irreparable loss and the interest of the foreign investors shall be seriously affected in clear violation of the protection guaranteed under Foreign Private Investment (Promotion and Protection) Act, 1980 and under clause 32 of the said Concession Agreement. Such illegal cancellation of the 30 years Concession Agreement by giving  seven days notice in gross violation of clause 10.3 of the Concession Agreement  is illegal and amounts to unlawful expropriation as per section  7L of the Act of 1980. Further it is pertinent to mention here that the petitioner has been involved in the project for over 16 years and has already invested over Tk. 35 crore on this project and created employment for over 400 people. It has also taken bank loan of Tk. 10 crore. In such situation, this Hon’ble Court may be pleased to set aside the judgment and order dated 22.04.2015 and pass the necessary order as prayed for. As the subsistence of the said Concession Agreement and the issue of rent, development plan, Certificate  of Satisfaction area subject matter of the arbitral proceeding, it is necessary to preserve the subject matter of the arbitral proceeding.

32.        He also submits that unless the opposite party is restrained from taking possession of the Schedule property and further directed to allow the petitioner to continue its lawful business as per the Concession Agreement dated 21.11.1999, the petitioner shall suffer irreparable loss and injury. The balance of convenience is in favour of the petitioner as the Concession Agreement is for 30 years and the petitioner has invested heaily in the said project. The dispute arose due to delay in handing over possession of land and delay in approving development plans. It is pertinent to mention that the arbitration has commences after due serving of Notice of Arbitration which the opposite party has acquiesced in writing on several occasions. In such circumstances, this Hon’ble Court may be pleased to allow the petitioner to carry out its lawful business in the Schedule land as per Concession Agreement by staying operation of the Notice of Cancellation dated 01.04.2015 and restrain the opposite party from taking possession of the Schedule property in order to preserve the subject matter of arbitration.

33.        He next submits that the learned Court committed error of law by holding that the application under section 7L of the Arbitration Act, 2001 has become infractuous as the Notice of Cancellation has been issued prior to institution of the Arbitration Miscellaneous Case No. 239 of 2015, even though the petitioner is still carrying its lawful business by taking orders and bookings from guests and accommodating them in the resort. The petitioner filed the application under section 7L of the Arbitration Act for preservation of the subject matter of the arbitration and allow it to continue business, otherwise it shall suffer irreparable loss and injury. The balance of convenience is in the favour of the petitioner. The disputes between the parties are to be settled in the arbitration which has already commenced under section 27 of the Arbitration Act, 2001. In such situation, this Hon’ble Court may be pleased to preserve the subject matter of the arbitral proceeding. The opposite party at this stage is most illegally refraining from participation in the arbitration.

34.        He lastly submits that the learned District Judge, Dhaka committed serious error of law in passing the judgment and order dated 22.04.2015 occasioning failure of justice. Under the facts and circumstances stated above, this Hon’ble Court may be pleased to set aside the judgment and order dated 22.04.2015 passed by the learned District Judge, Dhaka and considering the urgency of this case, this Hon’ble Court may be pleased to allow the petitioner to continue its business in the Schedule land as per Concession Agreement and restrain the respondent from taking possession of the schedule land, otherwise the instant arbitration shall become infractuous and the petitioner will suffer irreparable loss and injury.

35.        In support of his contention the learned counsel appearing for the petitioner has referred section 7A of the Arbitration Act 2001 where it provides Powers of Court and High Court Division to make interim orders:

36.        In support of his contention the learned Senior Counsel has referred the case of A.M Mostafiz Miah Vs. United Commercial Bank Ltd. and others reported in 4 CLR (High Court Division 2016) page 150.

37.        In support of his contention he has also referred section 7ka of the Arbitration Act, 2001.

38.        He has further referred the case of Miss Jinnatun Ara and others Vs. Govt. of the People’s Republic of Bangladesh represented by the Ministry of Law and Justice and Parliamentary Affairs and others reported in 15 MLR (AD) page 185.

39.        The learned Senior Counsel has lastly reported the case of Banesa Bibi Vs. Senior Vis-President and others reported in 63 DLR (AD) page 181.

40.        The learned Senior Counsel has also referred the case of Crown Merit Time Company Ltd. Vs. Royal Boss Kalis reported in 16 BLC High Court Division page 140.  

41.        The Rule is being contested by the opposite party by filing counter affidavit.

42.        Mr. Abdun Nur, the learned Advocate appearing on behalf of the opposite party submits that the lease of the suit property was cancelled on 01.04.2015 after due show cause. After dismissal of the Arbitration Case, the Administrative Magistrate, Tangail appeared at the office of Jamuna Resort Limited on 22.04.2015 at 3.00 P.M and requested Jamuna Resort Limited to handover the project to Bangladesh Bridge Authority. On failure of Jamuna Resort Limited to handover possession of the project to Bangladesh Bridge Authority, the Administrative Magistrate handed over possession of the project to Bangladesh Bridge Authority on 22.04.2015. As such the Rule became redundand.

43.        He next submits that the Learned District Judge, Dhaka was very much correct and lawful in finding that the Arbitral petitioner have failed to file Petition for appointment of arbitration after alleged arousal of the dispute for arbitration long before and as such the petition under section 7ka of the Arbitration Act, 2001 was not maintainable and as such was very much correct and lawful in rejecting the same.

44.        He further submits that Jamuna Resort Limited filed application under section 7ka of the Arbitration Act, 2001 with prayer for interim injunction restraining the Bangladesh Bridge Authority from terminating Concession Agreement dated 21.11.1999, but before filing the said application, Bangladesh Bridge Authority by letter dated 01.04.2015, has already terminated the Concession Agreement and as such the petition became infructuous and redundant.

45.        He also submits that Jamuna Resort Limited is a heavy defaulter. At present Jamuna Resort Limited has outstanding lease rents for an amount of Tk. 27, 19, 92, 891 up to February, 2015. It is an established principle of law that a defaulter of rents can not get protection of law and can not get an order of injunction and as such the Rule is liable to be discharged.

46.        He further submits that Jamuna Resort Limited has failed to perform the essential terms of Concession Agreement in failing to sign Certificate of Satisfaction in spite of handing over more properties than that of stipulated quantum and also in failing to implement development work as per Concession Agreement and as such termination of Concession Agreement was very much legal and logical and also legal consequence.

47.        He lastly submits that before termination of Concession Agreement Bangladesh Bridge Authority served notices upon the Jamuna Resort Limited to show cause and afforded all opportunity to the Jamuna Resort Limited to defend itself and as such no legal and natural right of Jamuna Resort Limited has been violated. As such the petition under section 7ka of the Arbitration Act, 2001 was rightly rejected by the Learned District Judge, Dhaka. 

48.        We have heard the learned Advocates of both sides, perused the impugned order dated 22.4.2015 passed  in Miscellaneous Case No. 239 of 2015 refusing to stay operation of notice of cancellation No. 50.105.109.00.00.085 (i-4).191   dated 01.04.2015 should not be set aside why the opposite party should not be directed to allow the petitioner to continue its business in the schedule land as per the concession Agreement dated 21.11.1999 and also why the opposite party should not be restrained by an order of injunction from taking possession of the schedule land till disposal of Arbitration Proceedings

49.        On perusal of the impugned order we find the learned District Judge fell into gross error in holding that section 7L is not applicable as arbitration between the parties has not commenced, particularly when the petitioner admittedly issued notice of Arbitration dated 27.04.2014 referring the disputes between the parties to arbitration and under section 27 of the said Act, arbitration shall be deemed to  have  commenced  when  an arbitration agreement is present and dispute has been referred to arbitration by a party, and as such the judgment dated 22.04.2015 resulted in an error in the decision occasioning failure of justice.

50.        We also find the impugned judgment and order dated 22.04.2015 has made virtually the whole purpose of the said section 7L of the Arbitration Act, 2001 frustrated and meaningless.

51.        We also find the learned District Judge, at the time of passing the impugned order fail to consider that upon issuance of the notice of Arbitration dated 27.04.2014 by the petitioner informing the respondent about appointment of Mr. M. Zafarullah Chowdhury as Arbitrator and requesting the respondent to appoint Arbitrator, the said Arbitration under clause 35.2 of the Concession Agreement has already commenced as per section 27 of the Arbitration Act, 2001.

52.        We further find the learned Court most illegally held that as the petitioner did not exercise the provision of section 12(4) of the Arbitration Act, 2001 for appointment of arbitrator within 30 days of receipt of notice by the opposite party, no order of injunction can be granted under section 7L of the Arbitration Act 2001 for their benefit. Whereas the said 12(4) is not at all applicable to the petitioner as the same only applies when there is no agreed procedure for appointment of arbitrator, and as the arbitration clause 35.2 of Concession Agreement contains procedure for appointment of arbitration, the applicable provision is section 12(7) which does not contain any time frame for approaching the Court; in fact the petitioner has been constantly communicating with the opposite party about the arbitration and lastly on 16.04.2015 issued letter stating that unless the opposite party appoints its arbitrator, the petitioner shall be compelled to invoke the section 12 of the Arbitration Act 2001 for appointment of arbitrator on it behalf.

53.        We further find the learned Court below failed to consider that the learned Court has power to pass interim order under section 7L of the Arbitration Act, 2001 for preserving the subject matter of the arbitration before, during or after the arbitration proceedings and until enforcement of the award under section 44 or 45 of the said Act.

54.        We also find the learned Court failed to consider that the Concession Agreement of the petitioner Joint Venture Company, having foreign shareholders, cannot be expropriated in such arbitrary, malafide and unlawful manner by cancellation of the said 30 years Concession Agreement by giving seven days notice as per section 7L of the Foreign Private Investment (Promotion and Protection) Act, 1980 and clause 17.2 of the Concession Agreement which provides full protection of foreign investment law to foreign investors.

55.        We also find the learned Court committed serious error of law occasioning failure of justice in failing to hold that the opposite party in clear violation of clause 10.3 of the Concession Agreement issued the Notice of Cancellation No. 50.105.109.00.00.085(i-4).191 dated 01.04.2015 within around seven days of issuance of show cause notice, for default in payment of rent and failing to carry out development work, whereas the said cause 10.3 expressly provides that the Concession Agreement can Only be terminated, in case of default in rent payment or delay in development work, upon giving three (3) months time to the petitioner to remedy the defect.  

56.        In the case of Crown Maritime Co. Vs. Royal Boskalis NV reported in 16 BLC High Court Division page 140 it is held that:-

         “Although monetary compensation as well be an adequate relief, nevertheless, there may be instance, as in the present case, when an order of injunction may still be necessary to preserve the subject matter of dispute in proper and effective adjudication of the matter. In the absence of an injunction, the subject matter of the dispute shall cease exist and, therefore, the proceedings whether beforefc an Arbitral Tribunal or a Court of Law would in effect, become infructuous.

57.        Having regard to the provision of section 7Ka of the Arbitration Act, 2001 and the foregoing discussion. The High Court has held that the preservation of the subject matter is very much necessary for proper and effective disposal of the arbitration proceedings that has been initiated between the petitioner and respondent Nos.1 and 2. In that view of the matter. There is cogent  reason to interfere with the order of direction passed by this Court on 28.01.2009.

58.        Accordingly, the application for vacating the order of direction dated 28.01.2009 stands rejected.

59.        In the case of Banesa Bibi Vs Senior Vice president and others reported in 63 DLR (AD) Page-160 where our apex court held that :

         It is very much pertinent to refer the section 18 and section 27 of the arbitration Act, which run as follows:-

         Severability of agreement:- An arbitration agreement which forms part of another agreement shall be deemed to constitute a separate agreement while giving decision for the purpose of determining the jurisdiction of the arbitral tribunal.

         Commencement of arbitral proceedings:- Unless otherwise agreed by the parties, the proceedings shall be deemed to have commenced if-

(a)   any dispute arises where the concerned arbitration agreement applies; and

(b)   any party to the agreement –

(i)     has received from another party to the agreement a notice requiring that party to refer, or to concur in the reference of the dispute to arbitration; or

(ii)   has received from another party to the agreement a notice requiring that party to appoint an arbitral tribunal or to join or concur in, or approve the appointment of, an arbitral tribunal in relation to the dispute.

60.        The aforesaid citations as referred by the learned Senior Counsel in support of his contention are fully applicable in the facts and circumstances of the present case.

61.        In view of the submissions as addressed by the learned Senior Counsel for the petitioner in support of the rule we find substance and merit. On the contrary we do not find any merit and substance in the submissions of the learned Advocate appearing for the opposite party.

62.        In the result, the rule is made absolute without any order as to cost.

63.        The order of status-quo as granted by the Hon’ble Appellate Division in Civil Petition for Leave to Appeal No. 1290 of 2015 dated18.05.2015 is hereby maintained. 

64.        There will be no order as to cost. 

         The office is hereby directed to transmit a copy of this judgment and order to the concerned court forthwith for information and necessary action.

Ed.