Bombay High Court
M/S.Mikesh Corporation vs M/S.Picotee Exports & Anr on 23 March, 2009
Equivalent citations: AIR 2010 (NOC) 22 (BOM.), 2009 (5) AIR BOM R 657 2010 A I H C 408, 2010 A I H C 408, 2010 A I H C 408 2009 (5) AIR BOM R 657, 2009 (5) AIR BOM R 657
Author: S.A. Bobde
Bench: S.A.Bobde, A.A.Sayed
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
APPEAL NO.777 OF 2003
In
ARBITRATION PETITION NO.209 OF 2001
In
AWARD DATED 18.10.2000
M/s.Mikesh Corporation : Appellant
(Orig.Respondent no.1)
V/s.
M/s.Picotee Exports & Anr. : Respondents
ig ...
Mr.S.K.Jain for the appellant.
Mr.O.S.Kutty with Ms S. Mukadam i/b. Haresh Mehta & Co.,
for the respondents.
...
CORAM : S.A.BOBDE & A.A.SAYED,JJ.
DATE : MARCH 23, 2009.
ORAL ORDER:
1. The appellant has preferred this appeal against the judgement dated 16.6.2003 of the learned single Judge of this Court setting aside the award on the ground that the appellant, who was the claimant, has not established the existence of an arbitration between the parties.
2. The appellant preferred a claim before the Arbitrator ::: Downloaded on - 09/06/2013 14:26:50 :::
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in accordance with the Mahajan Arbitration Rules and Regulations framed by the Mumbai Textiles Merchant Mahajan for a sum of Rs.8,85,951/- in respect of balance amount for cloth allegedly supplied to the respondents along with interest. The respondents resisted the claim, inter alia, on the ground that they were not a members of the Mahajan and was, therefore, not bound to submit to arbitration under the Mahajan Arbitration Rules and Regulations.
3. Initially, the Arbitrator gave an award. This award was set aside on the ground that he gave no reasons.
Thereafter, the Arbitrator heard the matter again and came to the conclusion that the respondents are liable for the aforesaid sum. The Arbitrator rejected the contention on behalf of the respondents that there was no arbitration agreement and held that there was an arbitration agreement between the parties which was printed on the invoices which were raised by the appellant on the respondents along with delivery of the goods. The learned Arbitrator took the view that since the goods were supplied by the appellant to the respondents and payments were made for the goods, this must have been on the basis of invoices which were delivered to the respondents by the appellant.
4. The learned single Judge while hearing the challenge under section 34 of the Arbitration and Conciliation Act, ::: Downloaded on - 09/06/2013 14:26:50 :::
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came to the conclusion that the Arbitrator could not have inferred the existence of an arbitration agreement which is said to have been printed on the invoices without proof or delivery of the invoices to the respondents. This judgement is challenged before us.
5. Mr.Jain, the learned counsel for the appellant, submitted that there was every reason to infer the existence of an arbitration agreement since admittedly the goods have been delivered and the invoices raised by the appellant have been paid by the respondents. It is, however, not possible to accept the contention merely because it is a possibility that invoices containing the arbitration agreement were raised. It is not prudent to infer that invoices containing an arbitration clause were raised on a party and handed over to them merely because certain payments have been made. In fact, it would not be proper to draw an inference, particularly where there has been a consistent denial by the respondents that they are not members of the Mahajan and are not subject to the rules of arbitration. In the present case, the learned counsel for the respondents has submitted that most of the amounts have been paid as advance.
6. Section 7 of the Arbitration and Conciliation Act, 1996 reads as follows:-
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"7. Arbitration agreement.--(1) In this Part, "arbitration agreement" means an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not.
(2) An arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement.
(3) An arbitration agreement shall be in writing.
(4) An arbitration agreement is in writing if it is contained in--
(a) a document signed by the parties;
(b) an exchange of letters, telex,
telegrams or other means of
telecommunication which provide a
record of the agreement; or
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(c) an exchange of statements of claim and
defence in which the existence of the
agreement is alleged by one party and
not denied by the other.
(5) The reference in a contract to a
document containing an arbitration clause
constitutes an arbitration agreement if the
contract is in writing and the reference is
such as to make that arbitration clause part of the contract."
The provision
clearly contemplates the existence of an
arbitration agreement in writing, though the writing may
be contained in a document signed by the parties or
letters or statements of claims exchanged by the parties
in which there is an arbitration agreement as alleged by
one party and is not denied by the other. In the present
case, there is no document purporting to be an
arbitration agreement signed by both the parties. It is
true that letters, telegrams or other means of
telecommunication could also contain an arbitration
agreement, but that requires proof that such letters,
telex, telegrams, etc., were exchanged by the parties
that is mutually delivered and actually received by each
other. We find that there is no proof that the
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appellant, in fact, delivered invoices containing the
arbitration agreement to the respondents. Therefore,
there cannot be said to have been an exchange of letters, etc., as required by section 7(4)(b), supra. The findings of the learned single Judge that the existence of an arbitration clause has not been established by demonstrating that the invoices were received by the appellant does not call for any interference.
7. In this view of the matter, we find that there was no arbitration agreement as required by law. There is thus no merit in the appeal which is hereby dismissed.
S.A. BOBDE, J.
A.A. SAYED, J.
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