Silklens Private Ltd vs Aabha International on 2 December, 2009

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Karnataka High Court

Silklens Private Ltd vs Aabha International on 2 December, 2009

Bench: V.Jagannathan

% '(E:i13;iKrd:g%ar'_"{"§{¢st}, Mumba_i-4{;%{} Q86.

 TELE'; m::;H {f:£i::{_.¥RT <f;:F§{A"i1?.E'€ATAE<;ZA yr BA§éG3%L€;")RE;'
Dazed the :23" day cf D6-C6i}1b€§' £009
:BEFQRE: 3
THE E-£{_Zif~E'BLE3 MEi.J1}STI<3E: : v¢J%AaTAm4AT;§AA¥xf%'T.L%
_:yi§SCELLA§§EO1;ES mas? APPEAL No. 5347  u

BETVJEEEQ ':
Siikiéins Private Ltd,  :  A. s T.
a. Ciompany Encaévperata -E and f:_;::<:ﬁ<§1f1iI1g _
Ulldﬁl' fhﬁ tgrevisiaras 01$' '€hev'C:0mpaI1i§:S Act; " A '
1956,. hazﬁzig its; .R6gist::red  at E--.33,=, 
Eegur Raad, B01:1:1:a.naTE:ai}i,  .. .. " 
Bangagom-56.0 £108.  bygité 'rganégzlg 
Di;re(:t03"  Gm"ud€613"<§§iI15§i'1-  '4  

T' ~=" .ué?F€Haﬁ€

gj    '"§{é:g,%:av§:2dra;:1::--V::mgade, Advocate. 3
9; N B  'V
Aabixa i11€iiiIf§iati<§i';ai;'._ " 

havimgg; ﬁgs ::>fﬁ«::e:§ lat 'AWE ,
Ga:'1'é§aE1iE3:1:1gai<§w,..._§§Tara:"ﬁ Lane,

,. .R€3S§)O}f1§€I}f€

  G.R.2x§<3ha11, Advecate fer <3,/R, }

iékiizééelianeaus First ﬁppeal fisé ands: Sesiian

 '~[f'3?{:'}gb; sf me Arbifratian and Conciiiatiaa get and
_ *  $'»'e:;~§§i:i$3;1 E04 Rjiﬁe' Qrdez' 4:3 Ruis 3 <35 CPS? against the
 "{:ii*<%er dazed ;«:§,2,2:'3:;:3 933365} in A,S*Na.39j2{)t}3 an {E36
V' ﬁie <31" Vi ﬁaciditiaﬁai éiity éﬁiixsii Judgeﬁ Bangalgre, {;":i.'§§-L-73 E,

¢{>r:ﬁ§*:::i§;g E;§Z3€i p:*eE§:1:i:':a:'§,=' srcéarf awayd giataai }',af>.2{§=€;§§

 ».



passed; by {$16 leasrmed Arbitrator regarding Véflilﬁ of

Arbitration proceedings.

This appeal cezyming on far hearing  _

cozzrt deiivgred the foilowing :

JUDGME§§ 

In this 3.3313681, this chgjjéixge is 1:9 tigé of  '

1:116 Arbitraticn Suit ﬁled 3 3'.-1-1".i«;.:i<:t1""' *§':ﬁ§(iCﬁ(i)Ilvv.,.3§4.'§ of €336

Arbitration 85 C'.o11ci}ja.t';i(iA:";'A€:1:, Act' in short)
by the triai <:§fn..f_i§f:€ ".a§*bin"a:ion a2xs*a1*<:i
dauai28Ai2§§3}~{_"ﬁ. 

:2. i' "i1a?.:e 3§h::_:V'§€§::.:1€é counsei far {ha parties.

Thﬁ ,0_I'de1* '«:>f" t§:j1§' .  beimsv is chaiienged E3}; tbs

 ~_a}Z>;§'3;"3;ﬁ.EZ-lfsfiil :31: $5333 '~g:"m:nds. The first 011$ is that the S016

   :10: having jurisdiciian 1:0 ccmduct

ar§;f§.u{%atioIiL' 'ipznceeéitzgs 3: Eviumbai when the

V'-..ziis"m*ii§1;f;#::rship cenwact erztareé inte bﬁtwsi-:51: the partizzts

A   §ﬁ7i'€i§1_iiGI}S that {aha _§1H'iS§f.€tiGI1 shaﬁ vest in 35:16 Stats {If

   _»_K5a:§%1a:aka, it is centamieé by the iaarned cmmsﬁi far

V' the appeiiafzt that the court baiﬁw was in errer in

:'ﬁ_§:3$Ej;1g 131$ carztentioiz 1{'{--_'{iS€€§ E3; the a§3}*}ei§a1::': as

/:';'



regaiﬁs want. if jui*i$diC:i033. 011 the part of the S016
a1'bi§ra:0r E33 Conducting the 31"bit.i'a"€:iQn }}?I'(}CfEf.'3_f;§ﬁ'§;,Ef£§.,f_§.>i'§'~V?E.'t'£

Muznbai.

3, 5§'he secend wound urged is {hat the   

co13%;:e111p§at6:(i is four momhs as, pér ..¥;hé'».temi'1s'"d1'--._ti"ie:

distributarship comraet a:1(iT_1'mj£ sixA1:r1:)1"}..t1"1S,_as.:i._31:as E36511 2 L'

hﬁki by the Court bcﬁew.  t§%%0AgffQ1;:§';ds, the
ieaxatactci counsel far  .  for setting
aside the ,§¥1A'?'g£1._1e1¢ti '\\ 'BE 3619"? in the
af0r€me11ti:§:>r1é:sfi_'   V  

4. {3£:;. ti*1eV(;t};'i€#j~.EiaIj§Vé:i»,...::he Eeazmed couﬂsei fer {E16

1*€sp€)?1;£E€}:2.'L  ":%§::::té3i=1<i€::i  "%.ha:§ both {E16 af9ra§§1€z1i:ia:1€::i

 --§f,1'G3t§I§ﬁ':;"§i'":*1E~3;'§?T§ ?3eeIi?:j£:§I1sid,ert:€i by {$13 cc>1;:r€': beimv in $316

  V cf :ﬂ3Té,T%3:1f3I'i8.§ pigs:-:+d by thc: guarties and 335::

haﬁng  iii} the decisien rarzﬁered by the Apex

A' '  "'{.":;A0::rt .a3f:..i'ﬁ afisc taking 311:9 Consideratiml the pmvisians

  ii3%§6 Act, The ceurt belaw, '€;'i1er€;f0ra canzﬂaitied

 'v..1?:-L: error £1": abgeming that none <3? {Em gaugxdg

.E'ﬁfEI1fE§ﬂE}€d im Sﬁﬁfiﬁﬁ 35% 0? the 19*:"'§6 Act was maﬁa 9:1':

$3}; the appeiiarzé: 311:? S€C§}"1&i'§r', as fag' as $315 jurigéicgieié

E»:

2-»



is <:<:211<:e:*1:1ed, newhere in the éisuébystorship contract. it

is me11i;i(>I1ed that aver'; the Vﬁlliiﬁ of §101c€:i:g_"'-«. 31::

arbitration proceedings ghafii be withirx the.-A4'}:u1'§:§§ii§.iti:§i1--T '

of the Szate of Eiamnataka.   ~

:1. As far as 31318 notice pefir;>d7._'_'iS'T céji1*1(::i::-3?:1:=*,:c'i;_L:"'«!f__';E;is:T;* 

iﬁalried c:0L13;1e;e:i for the réﬁﬁaﬂdaﬁi  the " V

paritias have been hagritag }1:1si}";e}S3_ mleiéicnﬂshyip right
from the year 1994 Q:ii£?aI=d§s._V:%:I::d :t£ié:A.§:cr1trac1: hemraﬁzz
the two pa1*ti¢s.:¢a;1tiI}'ue§i' 'i:3afs¥ImC1':  the 1'€Spc3n(iﬁI"1'£
was the dj;iSIii"_i~"¥:3i;:?;€S;gf  fe',:g_~...,,'L.'I¢" _a';§p€:EiaI1¥i's. preduct Viz,
(:0:1taz::i:._ isms --bé:i'£1g ciistxibutczti :13.) the Siam

0:" Maha1*3;s_§:t1'axégt_ }fai§113:g'i'E.:tai and Thané. ﬁaerﬁfare, {ha

.. _ £a_t.€.$i; Cc3:11:§*ac§:" =%.31e;§_:=sz£;r:11 the ;.:«a;r:ie$ that was breught

 §;.2§:r;*?=__i*a3:<fs;3':% wf17t§'1:__<:ﬁE«:{:t ﬁvm }_,4i.,:2i}(j)(} did 1:30: erase 0:"

St:§(:rCéﬁi&;--'V.";1iiA'TI=€§1e earlier ccsntracts between the parties

Q and; fhaffﬁféra, as the contract has eariiiﬁued be=:tweeI1

érfzéjgzsariies far mm' five mars §}{§Il§§}ﬁ§ six mamms netice

'  aégg cﬁmtenmiatﬁd under {ha GQ:"1t;"act_, merefarﬁg was

'4 féamd E9 335 vaﬁid by the as-L11': baierésazsa £1": this rﬁgard, {Em

iearﬁed €{}Ti_'iI},Sﬁ§ 935.3 ':.<}@§=: me 3:h§*01:gh €116 reagening éf

31$ i:s::s's_3r'§ mica? an "'::§:§=:s& QSQCSES apart, ﬂex}: rﬁfﬁrzéiag is

Err



'-.2:

{ha pmvisi«:3I1*s of thﬁ £9965: Act as Wei} as 'ta the
dacisiens, which have been réiisci upon *5}; the 0011?:

bﬁiew in the COIJTSE of its judgnmnt.

5. Having thus heard both sides, the csrgiaéir  ~

¢::0r1$iderat:i0:"1 is w*hc":v:h€:s;' the jtizigmant Kit" '~f11:3 ' c: :3V";,1z;-*é_ 2

§3€iGW requires izlterference in View '1:}1é'~.g:*QL:1nd:§_L"'~piit 

ferwarcrl by the iealtned CC}L1ﬁS(::3:E'~§§}I' ﬁfitr  
7, 'Ta king the hiuzéséigtioﬁm'po--§::t.: "i:1tQ ceﬁsiaeraaen,
the tmlphasis Iajé by 1:hA¢  t_i;ou11se1 is on

ciausegé " 19; L iiaI1d':7fV  .  {E16 ' 'disu"iE3umrship ccmtxact,
which iisras «.m'V1a;er'€<f'i ' ~i3j:1Ecjj 'b<:tWe6ﬁ the parties. The Said

itiausﬁs, t§1é£'*:f0r5§.'- 'wi;§,i fiave ':0 be raprcduced herein {(2

V'  --u11{§L€i*si.g.11{1 zthﬁ Céiitféxitions :3f the pa1""i;i(-:5 bﬁttei' 3:16

 fE§i*§';}v'u '1'{:*ad_5a;;%  ti_1"if{§€I'i

---- ﬁxsfrzczé 2 9 ﬁrbitratian -- Appzzfcazaze Law :

A: Any dispute arising 311: sf 0:' ii}
canmastion with the Qfﬁﬁﬁﬁi C8E"i3;I"'8_C§
shaii be fmajijgx settied in accgrdance
zariﬁ the Emdian Arbitrajzian Act.

1%.? 3233 c:c>:"1?m*ast is gaverzzad by the éaws sf
Enatiia, under the. j%,3I"iS€};iCfj§.C}3:'I aha}: vest.

far: €316 Siam: 0? Kamiaégaka,"

2::



8. A gfiaiiiz :€$aciing cf these {we C§&31t1S€S {ices not gjve

an ixxdicatien that even as regards the V€I?g¥.§=f3  is

cozacemed, the prcceedings shail be {::311citi{:§:§:f{'_§j_g?L- 

Arbiuator withm the jurisdgictien of the  _  

in the 8bS(iI1C€ of there beiﬂg  sp§5:{:.ifi€:«_ <:§5aL1$<::.qVi:;"i§1_e"A

contract izidicating thﬁz place 0f"x::~;9m1€, rvé::<:;i;zf'se°'.'¢=s%iEE  *'

havﬁ ti} bf: taken {:3 11:16 prdiéiséiong  1966
Act. Se<:1.:i.<:>1"1 28 9f the r£:$aVLd;~:§A 
"Q0. Pizrzce of atrbi§r§i£i,Q:z;: e  {1} -'"T ivi{::».:'V_}?éi'ti€s am

frat:-~t.r:':AV'a;§i*é5e}iI§;w:3  e3f"%zar'i3it1*a:io11.
1 _ {:3}V§'a:j%§ﬁgWj»é;z1§;"~--ag'éen1ent referred :0 in
$ub~;sé<_:fi{:&1 {   of arbitratioiz shaﬁ
_ he d':<.5"':'*i':e=V=:_§f':'1*;3L2'".-;--ed ~.  the arbiﬁai 9!:ri'i:I£;:1a§
3-,§;g%;,§'i;:1,;g :'é ga>:'ﬂ------i;<;} the circzzmstalacas 01" the
 __<::::1:SJs:::,g:i:1c;iudimg 'SE16 {:Of}.V6I1i61"1CE3: «sf {ha

 %  . V 

_  ?€0!iWit.hSt3;I}ﬂiI"£g $uE3~sect1"o1'1 {2} GI"
gagaseczm (23, am arbinrai txibumal may,
AA «.,.u1ﬁess Qthemvise agreed by this yariiﬁﬁ, meet:
'E: 3:23: piacte it (:€32{1Si€i€I'$ appmpriaie far
caﬁsuiiation amang its r£1<=:n::¥:.>e:*$_, far hearing
wimesses, exggerts or ftha gazties, or far

i§1Sp€Cti¢l}Z1 Qf Ci{}{2¥_}§}'1€I}€S_, gaods er Qther



prapaxiy» "



*9, it ix therefore, clear fmm 1:113 aibreH1e11ﬁi§:1ed

pi'0v:isi<t>11s as co:1taim=:<i in Sectien 20 £3121: £1516'  

arbitration is left to the ageement b(':EW¢'E33£1,.   

in the instant case. 1+: is m:% i11»r;i:is:':-;_it€  

respondent had u11cie:<'%:ake1:» [to__disifi1t_)if1::: tf;§"p§~Q¢§uc_i:s bi'

tha appeilant: at Za§aha:'asi':a:ﬂ§-,:S%2;Ee and Thaxas. Secondly", "i*i¢i'E:t.:@'iEf§";:ti0:1 had aiso takflil place at ara also from Mumbai. the Soﬁe Arbi§'a;§r, igitﬁaﬁon pI'OC€Z'(?id§;{lg$ at Mun.1b}3,;§ "t:t3(>k part in the Sélﬁlﬁ and iﬁd avitiezicgtjj." _'FVI*ic*;1'€:=:f9:"'¢ff',:,:"_.'%wE§1t: iearned judge of the seam be¢'i<;1=.sé3. 3i{;<:3i< i"it:?g_ ____ _}:;::T' ail these facmrs arid more »p;;;:{%:icuA;_a;:<;.y<§%%'mg: {E13 absence of the dismbuzorship cGI1.i:*a.ci'1"i€§t fzientiorzmg anytlzing as resgards the v(+:m_1s I_is c<§;1cé:;1§:i, the: prezceﬁdings heid at Mumbai '{3}; the {j::<::»1;e7";*§;r"75ih"at0r, thersfore, caxmot be faultaci. ' E53. Apart frag} this, ii is else to be mentiened thaé: the aybitrai 'fribmzai may rule an its cwr: jmisciicﬁozte inciuding ruéing an 3213:' abjectiezis with regayd in the is existence or viaiidity of the arbitratioix agreemaxlt and far the said purpose, the, arbitration ciause wi"1ic1*:~._f~:::*ms part of the €IO1"1tI'&Ct shall be trcated as » indapendent of the other I':<3:r3:1*1s Gf C0:.:ﬁ'éCT;f " "

regard til) 31} these factors, in the"';cas;:éTCif1 h;31"1ci..,' 110 has been C0111mjJ:ted by the s:,_C§t};"t béifm' Vigi the " V coniention of the ..?.;@I1u€3 {if arbitration pri3<:c3ecih'ig§_§ from this, the Ieajneé _ sf relied on an Apex AER 2:30: SC £219 in which éé ¢'::;"if1j#:.V.:¥{i:3'ec§i'_";"»%'iéi":5tVv:<::sf the aybitrai tribuna} regardi%':gV:§'a1iue.V}:§' is 1:91: appealabie. Far all tI1x*::s€:-- ..:*eas£§n.s, ' ~t:'i"1€:% '- ﬁ_i'st COIT{¥Zt':I1tiO1"1 raised E37-5 aha ..cou:1:§éi, tiaerefore, dam net merit an}? A -:::9:f;~$i<:£3::i'€a_1§j;i;ﬁ:. V V 1 £".39iﬁi:1'g to the netice peziioé, in the-, eo3:1t:'a{:':; 0:' . ti;is2Ti?ri§31§,:':'0rshi§ exztemd mtg bf3?32§'{"E€fi the parﬁas, fthﬁ _ iiaiévant ciause is 17 whiech reads as under:

6'-£'?k:2 This CC)I1?Z;"aC'£ sftiajii E26 au'?£amaa'::aB§'.; renewed far S'é.3;.CC$SS}:V€': perieda Of @116 may u§:,i.e:<§s §".{"3tE'i"§1iI1at€{T§. '$3; either: by noﬁcéz giver': 2%?

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