Madras High Court
Sun Tv Network Limited vs M/S.Mechknow India Private Limited on 24 August, 2022
Author: M.Sundar
Bench: M.Sundar
Arb.OP.(Com.Div) No.305 of 2022
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 24.08.2022
CORAM
THE HON'BLE Mr.JUSTICE M.SUNDAR
Arb.OP.(Com.Div) No.305 of 2022
Sun TV Network Limited,
Murasoli Maran Towers,
73, MRC Nagar Main Road,
MRC Nagar, Chennai-600 028.
Rep. by its Authorised Signatory
Mr.M.Jyothi Basu
... Petitioner
-Vs-
M/s.Mechknow India Private Limited,
Having its registered office at
H.No.6-2-103/119,
Shiridi Sai Baba Colony,
Opp. Shobana Colony,
Balanagar, Hyderabad,
Telangana-500 042.
Also at:
Ground Floor, 6-2-103/9,
E.S.Complex, Near Vimal Theatre,
Bala Nagar, Medhal-Malkajgiri,
Telangana, India - 500 042.
...Respondent
Prayer: Original Petition filed under Section 11(5) of The Arbitration and
Conciliation Act, 1996 praying (a) to appoint an arbitrator to adjudicate the
disputes between the Petitioner and the Respondent in terms of the
Sponsorship Agreement dated 08.03.2019 and (b) direct the respondents to
https://www.mhc.tn.gov.in/judis
1/14
Arb.OP.(Com.Div) No.305 of 2022
pay costs.
For Petitioner : Mr.G.Joshua
of M/s.King and Partridge
For Respondent : No Appearance
****
ORDER
This order will now dispose of captioned matter.
2. This order has to be read in conjunction with and in continuation of earlier proceedings of this Court made in the previous listings on 13.07.2022, 14.07.2022, 28.07.2022, proceedings of learned Master dated 22.08.2022 and proceedings of this Court made yesterday i.e., 23.08.2022 all of which read as follows:
'Proceedings dated 13.07.2022 Captioned 'Arbitration Original Petition' [hereinafter 'Arb OP' for the sake of convenience and clarity] has been presented in this Court on 04.07.2022 under Section 11 of 'The Arbitration and Conciliation Act, 1996 (Act No.26 of 1996)' [hereinafter 'A and C Act' for the sake of convenience and clarity] with a prayer for appointment of an Arbitrator qua an 'Agreement dated 08.03.2019 and captioned Sponsorship Agreement' [hereinafter 'primary contract' for the sake of convenience and clarity].
2. Mr.D.Prajeish, learned counsel along with Mr.M.Narendran of M/s.King and Partridge (Law Firm) on behalf of https://www.mhc.tn.gov.in/judis 2/14 Arb.OP.(Com.Div) No.305 of 2022 the petitioner who is before this Court submits that the petitioner-
Company has been granted cricket franchise which goes by the name 'SunRisers Hyderabad' for IPL T20 (seasons 11 and 12) and primary contract is for further transfer of sponsorship rights by the petitioner-Company to the respondent-Company. This Court is informed that the respondent Company inter alia is in the business of leasing/rental of luxury cars. It is submitted by learned counsel that the captioned Arb OP is predicated on clause 19.2 of primary contract which reads as follows:
'19.2 All disputes arising from or in connection with this Agreement shall be referred to and finally settled by arbitration in accordance with the Indian Arbitration and Conciliation Act, 1996. The arbitral tribunal shall consist of a sole arbitrator appointed by SubRisers. Judgment upon the arbitral award may be entered in any Court having jurisdiction over the Parties or their assets. The arbitration proceedings shall be held at Chennai, Tamil Nadu. The arbitration proceedings shall be conducted in the English language. The award of the arbitral tribunal shall be final and binding on the parties.'
3. To be noted, clause 19 is captioned 'GOVERNING LAW AND DISPUTE RESOLUTION'. Aforementioned clause 19 of primary contract serves as an Arbitration Agreement between the petitioner-Company and respondent-Company i.e., 'Arbitration Agreement' within the meaning of Section 2(1)(b) read with Section 7 of A and C Act is learned counsel's say.
4. When the primary contract was operated, it ran into rough https://www.mhc.tn.gov.in/judis 3/14 Arb.OP.(Com.Div) No.305 of 2022 weather as according to the petitioner Company respondent-
Company defaulted in monies payable to petitioner-Company and claim is in the region of Rs.1.41 Crores approximately. This broadly but inter alia is the nucleus of arbitrable disputes that have arisen between the parties and it is not necessary to dilate or set out granular details qua facts as this is a Section 11 legal drill and the matter is in the Admission Board. Adverting to trigger notice i.e., notice invoking aforementioned arbitration agreement dated 24.05.2022, learned counsel submits that the same has been returned unserved when mailed through conventional mode i.e., speed post with acknowledgment. However trigger notice was sent to the respondent by way of electronic mail on 27.05.2022 is learned counsel's say but attachment is not before this Court only the cover mail has been placed before this Court. Besides this, the transmission of electronic mail qua addressee is also of relevance.
5. Learned counsel for the petitioner, faced with the above situation, requests for a short accommodation to do the needful. Request acceded to.
6. List in the Admission Board i.e., Motion List tomorrow. List on 14.07.2022.' 'Proceedings dated 14.07.2022 Read this in conjunction with and in continuation of earlier proceedings made in the previous listing on 13.07.2022 (yesterday) which reads as follows:
'Captioned 'Arbitration Original Petition' [hereinafter 'Arb OP' for the sake of convenience and clarity] has been https://www.mhc.tn.gov.in/judis 4/14 Arb.OP.(Com.Div) No.305 of 2022 presented in this Court on 04.07.2022 under Section 11 of 'The Arbitration and Conciliation Act, 1996 (Act No.26 of 1996)' [hereinafter 'A and C Act' for the sake of convenience and clarity] with a prayer for appointment of an Arbitrator qua an 'Agreement dated 08.03.2019 and captioned Sponsorship Agreement' [hereinafter 'primary contract' for the sake of convenience and clarity].
2. Mr.D.Prajeish, learned counsel along with Mr.M.Narendran of M/s.King and Partridge (Law Firm) on behalf of the petitioner who is before this Court submits that the petitioner-Company has been granted cricket franchise which goes by the name 'SunRisers Hyderabad' for IPL T20 (seasons 11 and 12) and primary contract is for further transfer of sponsorship rights by the petitioner-Company to the respondent-Company. This Court is informed that the respondent Company inter alia is in the business of leasing/rental of luxury cars. It is submitted by learned counsel that the captioned Arb OP is predicated on clause 19.2 of primary contract which reads as follows:
'19.2 All disputes arising from or in connection with this Agreement shall be referred to and finally settled by arbitration in accordance with the Indian Arbitration and Conciliation Act, 1996. The arbitral tribunal shall consist of a sole arbitrator appointed by SubRisers. Judgment upon the arbitral award may be entered in any Court having jurisdiction over the Parties or their assets. The arbitration proceedings shall be held at Chennai, Tamil Nadu. The https://www.mhc.tn.gov.in/judis 5/14 Arb.OP.(Com.Div) No.305 of 2022 arbitration proceedings shall be conducted in the English language. The award of the arbitral tribunal shall be final and binding on the parties.'
3. To be noted, clause 19 is captioned 'GOVERNING LAW AND DISPUTE RESOLUTION'. Aforementioned clause 19 of primary contract serves as an Arbitration Agreement between the petitioner-Company and respondent-Company i.e., 'Arbitration Agreement' within the meaning of Section 2(1)(b) read with Section 7 of A and C Act is learned counsel's say.
4. When the primary contract was operated, it ran into rough weather as according to the petitioner Company respondent-Company defaulted in monies payable to petitioner-Company and claim is in the region of Rs.1.41 Crores approximately. This broadly but inter alia is the nucleus of arbitrable disputes that have arisen between the parties and it is not necessary to dilate or set out granular details qua facts as this is a Section 11 legal drill and the matter is in the Admission Board. Adverting to trigger notice i.e., notice invoking aforementioned arbitration agreement dated 24.05.2022, learned counsel submits that the same has been returned unserved when mailed through conventional mode i.e., speed post with acknowledgment. However trigger notice was sent to the respondent by way of electronic mail on 27.05.2022 is learned counsel's say but attachment is not before this Court only the cover mail has been placed before this Court. Besides this, the transmission of electronic mail https://www.mhc.tn.gov.in/judis 6/14 Arb.OP.(Com.Div) No.305 of 2022 qua addressee is also of relevance.
5. Learned counsel for the petitioner, faced with the above situation, requests for a short accommodation to do the needful. Request acceded to.
6. List in the Admission Board i.e., Motion List tomorrow. List on 14.07.2022.'
2. Pursuant to the aforementioned earlier proceedings, a Certificate under Section 65B of Indian Evidence Act, 1872 has been filed vide D.No.18524 of 2022 and the same is before this Court. To be noted, this is vide electronic mail dated 27.05.2022.
3. Prima facie case made out for issue of notice.
4. Issue notice to sole respondent returnable in a fortnight i.e., returnable by 28.07.2022. Private notice permitted.
5. List on 28.07.2022.' 'Proceedings dated 28.07.2022 Read this in conjunction with and in continuation of earlier proceedings made in the previous listing on 14.07.2022.
2. Mr.G.Joshua of M/s.King and Partridge, who is before this Court on behalf of the petitioner, adverting to earlier proceedings submits that private notice sent to the lone respondent has been returned with the postal endorsement 'Left without Instructions'. Learned counsel submits that it would be desirable to resort to substituted mode of service.
3. List this matter before learned Master on Monday i.e., 01.08.2022. Learned counsel for petitioner to take steps to ensure that service is completed/effected qua lone respondent by resorting https://www.mhc.tn.gov.in/judis 7/14 Arb.OP.(Com.Div) No.305 of 2022 to substituted service before learned Master. This shall be done within three weeks from the first listing before learned Master i.e., by 22.08.2022.
List before this Court on 23.08.2022.' 'Proceedings of learned Master dated 22.08.2022 Paper publication effected as ordered by this Court. The petitioner counsel submitted the proof of service in the open court. Verified. The Hon'ble Judge has directed to list the matter on 23.08.2022. Hence the Registry is directed to print the name of the respondent in the cause list and list the matter before the Hon'ble Judge's Court on 23.08.2022.' 'Proceedings dated 23.08.2022 Mr.D.Prajeish, learned counsel of M/s.King and Partridge (Law Firm) one behalf of sole petitioner is before this Court.
2. Adverting to earlier proceedings dated 28.07.2022, learned counsel submits that the lone respondent has been duly served by resorting to substituted service before learned Master.
3. Proceedings of learned Master dated 22.08.2022 reads as follows:
'Paper publication effected as ordered by this Court. The petitioner counsel submitted the proof of service in the open Court. Verified. The Hon'ble Judge has directed to list the matter on 23.08.2022. Hence the Registry is directed to print the name of the respondent in the cause list and list the matter before the Hon'ble Judge's Court on 23.08.2022.'
4. Registry to show the name of sole respondent together with https://www.mhc.tn.gov.in/judis 8/14 Arb.OP.(Com.Div) No.305 of 2022 full/complete address as in the short and long cause titles in the next listing which shall be tomorrow. List on 24.08.2022.'
3. Aforementioned proceedings shall now be read as an integral part and parcel of this order. This means that abbreviations, short forms and short references used in the earlier proceedings shall continue to be used in the instant order also for the sake of convenience and clarity.
4. Today, Mr.G.Joshua, learned counsel of M/s.King and Partridge (Law Firm) is before this Court on behalf of the sole petitioner-Company. As regards the lone respondent-Company, pursuant to proceedings of this Court dated 23.08.2022 [proceedings made yesterday] the name of the sole respondent together with full/complete address as in the short and long cause titles in the captioned Arb OP is shown in the cause list. Name of the lone respondent called out aloud thrice in the Court and the adjoining corridors. No response. This Court is also informed that the lone respondent has not entered appearance through any counsel. This means that the lone respondent has not chosen to come before this Court and dispute the existence of arbitration agreement i.e., Clause 19.2 of primary contract viz., agreement dated 08.03.2019 captioned Sponsorship Agreement.
5. A legal drill under Section 11 of A and C Act usually perambulates https://www.mhc.tn.gov.in/judis 9/14 Arb.OP.(Com.Div) No.305 of 2022 within the statutory perimeter sketched by sub-section (6A) thereat, which reads as follows:
'(6A) The Supreme Court or, as the case may be, the High Court, while considering any application under sub-section (4) or sub-section (5) or sub-section (6), shall, notwithstanding any judgment, decree or order of any Court, confine to the examination of the existence of an arbitration agreement.'
6. Aforementioned sub-section (6A) of Section 11 of A and C Act came up for consideration before Hon'ble Supreme Court in oft quoted Mayavati case law i.e., Mayavati Trading Pvt. Ltd vs Pradyuat Deb Burman reported in (2019) 8 SCC 714. Relevant paragraph is paragraph 10 and the same reads as follows:
'10. This being the position, it is clear that the law prior to the 2015 Amendment that has been laid down by this Court, which would have included going into whether accord and satisfaction has taken place, has now been legislatively overruled. This being the position, it is difficult to agree with the reasoning contained in the aforesaid judgments, as Section 11(6-A) is confined to the examination of the existence of an arbitration agreement and is to be understood in the narrow sense as has been laid down in the judgment in Duro Felguera SA.' (underlining made by this Court to supply https://www.mhc.tn.gov.in/judis 10/14 Arb.OP.(Com.Div) No.305 of 2022 emphasis and highlight)
7. Aforementioned paragraph 10 of Mayavati case law takes this Court to Duro Felguera case law i.e., Duro Felguera S.A. Vs Gangavaram Port Limited reported in 2017 (9) SCC 729, relevant paragraphs are paragraphs Nos.47, 59, which read as follows:
'47. What is the effect of the change introduced by the Arbitration and Conciliation (Amendment) Act, 2015 (hereinafter referred to as "the 2015 Amendment") with particular reference to Section 11(6) and the newly added Section 11(6-A) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as "the 1996 Act") is the crucial question arising for consideration in this case.
59. The scope of the power under Section 11(6) of the 1996 Act was considerably wide in view of the decisions in SBP and Co. and Boghara Polyfab. This position continued till the amendment brought about in 2015. After the amendment, all that the Courts need to see is whether an arbitration agreement exists – nothing more, nothing less.
The legislative policy and purpose is essentially to minimize the Courts intervention at the stage of appointing the arbitrator and this intention as incorporated in Section 11(6-A) ought to be respected.' https://www.mhc.tn.gov.in/judis 11/14 Arb.OP.(Com.Div) No.305 of 2022
8. Aforementioned facet of a Section 11 legal drill is statutory. Two other facets of a Section 11 legal drill have been put in place by way of judicial pronouncements. These two facets are N.N.Global principle and Nortel principle being ratio of Hon'ble Supreme Court in N.N.Global Mercantile Pvt. Ltd., Vs. Indo Unique Flame Ltd., and others reported in 2021 SCC Online SC 13 and Bharat Sanchar Nigam Limited and another Vs. Nortel Networks India Private Limited reported in (2021) 5 SCC 738 case laws respectively. To be noted, N.N.Global principle pertains to a plea of arbitration being contained in an agreement which is insufficiently stamped/unstamped or not registered when it is compulsorily registrable. Nortel principle pertains to a plea of a lis being ex facie barred by limitation. These principles do not come into play in the case on hand as the lone respondent has not chosen to come before this Court and raise any plea (much less such pleas) in spite of service being duly effected albeit by resorting to substituted service before learned Master.
9. Therefore, sequitur is, the prayer for appointment of Arbitrator cannot but be acceded to. Prayer for appointment of Arbitrator is acceded to.
10. Hon'ble Mr.Justice N.Kirubakaran (Retd), a former Hon'ble Judge of this Court, with address for service at No.36, 2nd Cross Street, Rayala https://www.mhc.tn.gov.in/judis 12/14 Arb.OP.(Com.Div) No.305 of 2022 Nagar, Ramapuram, Chennai-600 089, Mobile: 94450 25454 (email:
[email protected]) is appointed as sole Arbitrator. Hon'ble Sole Arbitrator is requested to enter upon reference qua primary contract i.e., Agreement dated 08.03.2019 captioned Sponsorship Agreement, adjudicate upon the arbitral disputes and render an award by holding sittings in 'Madras High Court Arbitration and Conciliation Centre under the aegis of this Court' (MHCAC) by applying Madras High Court Arbitration Proceedings Rules 2017 and fee of the Hon'ble Arbitrator shall be in accordance with the Madras High Court Arbitration Centre (MHCAC) (Administrative Cost and Arbitrator's Fees) Rules 2017.
11. Captioned Arb.OP is disposed of in aforesaid manner. There shall be no order as to costs.
24.08.2022 kmi Note: The Registry is directed to communicate this order forthwith to
1. Hon'ble Mr.Justice N.Kirubakaran(Retd.), Former Hon'ble Judge of this Court, No.36, 2nd Cross Street, Rayala Nagar, Ramapuram, Chennai-600 089.
Mobile: 94450 25454 (email: [email protected])
2. The Director, Tamil Nadu Mediation and Conciliation Centre -cum- Ex-Officio Member, Madras High Court Arbitration Centre, Madras High Court, Chennai 600 104.
https://www.mhc.tn.gov.in/judis 13/14 Arb.OP.(Com.Div) No.305 of 2022 M.SUNDAR, J kmi Arb.OP.(Com.Div) No.305 of 2022 24.08.2022 https://www.mhc.tn.gov.in/judis 14/14