Bombay High Court
Jhs Svendgaard Laboratories Ltd vs Gillette India Ltd on 15 February, 2016
Author: Anoop V.Mohta
Bench: Anoop V.Mohta, G.S.Kulkarni
Rng 1
app.33.16.609.15
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
APPEAL (L) NO.33 OF 2016
in
ARBITRATION PETITION NO.609 OF 2015 a/w NOTICE OF
MOTION
NO.278 OF 2016
JHS Svendgaard Laboratories Ltd .. Appellant
vs
Gillettee India Ltd .. Respondent
Mr.S.K.Maniktala a/w Mr.P.Ranjan
i/b Halai &Co for Appellant
Mr.Mustafa Safiyuddin a/w Mr.Ashutosh
Sampat a/w Mr.Abhishek Adke,Mr.Jaideep
Singh Khattar, Mr.Hassan Saiiyuddin i/b
M/s Legasis Partners for Respondent
...
CORAM: ANOOP V.MOHTA AND
G.S.KULKARNI, JJ
DATE: 15 FEBRUARY 2016
ORAL JUDGMENT (Per Anoop V.Mohta,J)
Rule. Returnable forthwith. Heard finally by consent of parties.
2. The Appellant under section 37 of the Arbitration and Conciliation Act, 1996 (for short the 'Act') ::: Uploaded on - 23/02/2016 ::: Downloaded on - 27/02/2016 23:13:29 ::: Rng 2 app.33.16.609.15 has challenged the order passed by the learned Single Judge dated 14 December 2015 on an application filed by the Petitioners-Respondents under section 9 of the Act whereby reliefs in terms of prayer clauses (a) and (d) are granted. The operative part of the order is reproduced herewith below:
"As regards the absence of the arbitration clause in the Asset Agreement, perusal of the agreement shows that the main agreement i.e.Toothpaste Agreement is specifically made to be a part of the Asset Agreement. Therefore, on a prima facie view, the arbitration clause in the Toothpaste Agreement can be read into the Asset Agreement. Hence, the ad interim order in terms of prayer clauses (a) and (d). The respondent shall handover the assets specified at Exhibit 'N' within a period of six weeks from today. If the assets are not handed over, within the time granted, liberty to the petitioner to apply for relief in terms of prayer clauses (b) or (c)."
3. Learned counsel appearing for the Appellants has raised a basic submission that there is no arbitration clause and therefore there was no question of invoking section 9 Petition that resulted into passing of the impugned order and directions to return the goods/machineries in question. The learned counsel has relied upon the Supreme ::: Uploaded on - 23/02/2016 ::: Downloaded on - 27/02/2016 23:13:29 ::: Rng 3 app.33.16.609.15 Court Judgment in the case of M.R.Engineers and Contractors Private Limited vs Somdatt Builders Limited (2009) 7 Supreme Court Cases 696 and referred to paragraph 24 whereby section 7 of the Act has been elaborated.
4. We have to consider the facts and circumstances and basically the agreement between the parties including the existence of clause of arbitration and clause of Court's jurisdiction. The main Manufacturing Agreement dated 8 March 2010 between the parties read and referred and basically. Clause 10.13 which reads as under :
"10.13 Governing Law, Construction and Language All disputes arising in connection with this Agreement shall be settled if possible by amicable negotiation of the parties. If the matter is not resolved by amicable negotiations within 30 business days or such date as may be agreed upon then the dispute shall be finally settled by arbitration in accordance with the laws of Arbitration. The dispute shall be referred for arbitration to a single arbitrator shall be a retired Judge of the Bombay High Court who shall be appointed by the BUYER. The decision of the BUYER on the appointment of the Arbitrator shall ::: Uploaded on - 23/02/2016 ::: Downloaded on - 27/02/2016 23:13:29 ::: Rng 4 app.33.16.609.15 be final and binding on the SELLER. The Arbitration proceedings shall be held in Mumbai and shall be in accordance with and subject to the provisions of the Arbitration and Conciliation Act, 1996 (the"ACA") and any amendments thereof . The decision of the arbitrator shall be final and binding on BUYER and SELLER. The decision of the Arbitrator shall constituted an award within the meaning of the ACA and shall be enforceable in any competent Court of law. The provisions of this section shall survive the termination of tis agreement. The PARTIES understand the English language and are fully aware of all terms and conditions contained herein. If any translation of tis AGREEMENT is made the English language version shall always continue to govern. The PARTIES agree that (I) the United Nations Convention on International Sale of Goods and/or the Sales of Goods Act (Ontario Canada) shall have no force or effect on transactions under or relating to this AGREEMENT (II) no trade usage shall be used to explain or supplement this AGREEMENT even if either or both PARTIES were aware or should have been aware of such trade usage; and (iii) this AGREEMENT prevails over any general terms and conditions of trade."
5. The Supplementary Agreement dated 3 September 2012. Clause 20 is as under:
"Whereas Gilletee India Limited and Manufacturer have entered into an Agreement dated 8th March 2010 (hereinafter referred to as 'the Agreement') "Upon the expiration or earlier termination of this Agreement, the Manufacturer shall immediately return the Assets and technical documentation along with consumable/spares to the Company or any authorized representative of the Company at the location or at the locations as communicated by the Company. The Assets shall be returned in good condition and working order, ordinary wear and tear resulting from proper use ::: Uploaded on - 23/02/2016 ::: Downloaded on - 27/02/2016 23:13:29 ::: Rng 5 app.33.16.609.15 thereof alone excepted."
6. Further Amendment Agreement dated 20 December 2012 is also referred to 8 March 2010 Agreement. The following clause is relevant :
(A) The Parties have entered into an agreement dated March 8, 2010 effective from February 1, 2010 whereby the Manufacturer has undertaken to manufacture and package Products (as defined therein) as per the specifications of the Company on the terms and conditions more particularly provided therein (hereinafter referred to as "the Manufacturing Agreement".) "8.1 The parties agree that any dispute arising between the parties in relation to the Manufacturing Agreement or any addendum/amendments thereto (including the Supplementary Agreement the Idling cost letter, the Advance Agreements or this Agreement or any other writing between the parties) shall notwithstanding anything to the contrary under the Supplementary Agreement, the Idling Cost letter or the Advance agreements) be subject to the dispute resolution mechanism as stipulated in clause 10.13 of the Manufacturing Agreement. For the avoidance of doubt, it is clarified that the reference to the term "Buyer" used in the Manufacturing Agreement including the said clause 10.13 shall refer to the Company and the term "Seller" used in the Manufacturing Agreement including the said clause 10.13 shall refer to the Manufacturer."
"8.2 Subject to the arbitration provisions ::: Uploaded on - 23/02/2016 ::: Downloaded on - 27/02/2016 23:13:29 ::: Rng 6 app.33.16.609.15 contained in clause 10.13 of the Manufacturing Agreement, the Parties submit to the exclusive jurisdiction of the competent Courts in Mumbai in relation to any proceedings arising out of or in relation to the Manufacturing Agreement or any addendum/amendments thereto (including the Supplementary Agreement, the idling, Cost Letter, the Advance Agreements, this Agreement or any other writing between the Parties)"
7. We have noted that there is a clear reference of the main Agreement dated 8 March 2010 in all those subsequent agreements, including clause of arbitration and jurisdiction. Moreover, prima facie the agreements appear to be intricately connected to each other. A statement is made by counsel appearing for the parties that this issue is also pending before the learned Arbitral Tribunal which is dealing with the claim of the Appellants and counter claim of the respondents.
8. We are concerned with the invocation of section 9 Application in view of the reasons so mentioned and averred by the respondents. The fact of termination of the contract is not in dispute so also the fact that there is no ::: Uploaded on - 23/02/2016 ::: Downloaded on - 27/02/2016 23:13:29 ::: Rng 7 app.33.16.609.15 renewal of the contract. The contract itself provides that once Agreements are terminated the machineries in question which are admittedly owned by the Respondents are required to be returned. Those machineries admittedly are not returned by the Appellants inspite of the termination of the contract. Merely because arbitration proceedings have been invoked that itself in our view, also cannot be a reason to retain the machineries in such fashion by the respondents. The learned Judge therefore, considering the rival submissions so raised and after going through the averments so made of both parties, by a reasoned order directed the Appellants to hand over the machineries and also passed a protective order pending arbitration proceedings.
9. It is settled that while dealing with section 9 Application the learned Judge need to consider the basic principle revolving around the grant of injunction and/or ::: Uploaded on - 23/02/2016 ::: Downloaded on - 27/02/2016 23:13:29 ::: Rng 8 app.33.16.609.15 appointment of Receiver and/or attachment of property/machinery. In view of the above admitted facts on record, continuation of use of machinery by the Appellants inspite of termination order therefore, is rightly taken note of and directed to be returned. The submission that Arbitration proceedings are pending that itself cannot be a reason for the Appellants to continue to use those machineries.There is no other material placed on record and/or right to show that the appellant is entitled to retain these machineries, inspite of the termination of the contract and/or no renewal of the Agreement in question. The constant use and non-use of machineries and/or further the apprehension that machinery/machineries may be damaged just cannot be overlooked. The entitlement/claim even if any, against the respondents so raised, ultimately the Arbitral Tribunal may pass an appropriate order. We are inclined to observe that the respondent's claim at this stage and prayer for returning of the goods/machineries and ::: Uploaded on - 23/02/2016 ::: Downloaded on - 27/02/2016 23:13:29 ::: Rng 9 app.33.16.609.15 protective relief so granted is justified in the facts and circumstances of the case.
10. The Judgment so cited that of M.R.Engineers (supra) in our view, is distinguishable on facts itself.
There were no such agreements between the private parties as read and referred in the present matter. The commercial agreements which we have gone into and as read by the parties and the stipulated binding clauses itself are sufficient to distinguish this decision of the Supreme Court.
So far as the law so referred in view of the above factual position need no further discussion as we are deciding the matter on the basis of facts and circumstances so referred above.
11. No case is made out. Appeal is dismissed.
12. It is made clear that the observations made by ::: Uploaded on - 23/02/2016 ::: Downloaded on - 27/02/2016 23:13:29 ::: Rng 10 app.33.16.609.15 this Court is to decide the present Appeal only.
13. Learned counsel for the appellants has submitted to stay the order which we have passed in open Court. Considering the reasons given by the learned Single Judge and for above reason and as we have dismissed the appeal, no case is made out for any further protection/reliefs so sought. The oral request for stay is therefore, rejected.
Rule is discharged accordingly. No costs.
G.S.KULKARNI, J ANOOP V.MOHTA , J
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