Karnataka High Court
Siemens Factoring Private Limited vs Abb India Limited on 16 December, 2025
Author: Suraj Govindaraj
Bench: Suraj Govindaraj
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NC: 2025:KHC:53608
CMP No. 250 of 2023
HC-KAR
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 16TH DAY OF DECEMBER, 2025
BEFORE
THE HON'BLE MR. JUSTICE SURAJ GOVINDARAJ
CIVIL MISC. PETITION NO. 250 OF 2023
BETWEEN
SIEMENS FACTORING PRIVATE LIMITED
PLOT NO 02, SECTOR NO 2
KHARGHAR NODE, NAVI MUMBAI
RAIGARH - 410210
REP BY ITS AUTHORISED SIGNATORY
.... PETITIONER
(BY SRI PRAMOD NAIR, LEARNED SENIOR COUNSEL FOR
SRI. HANSI ZULFIQUAR AHMED NISAR AHMED., ADVOCATE)
AND
ABB INDIA LIMITED
HAVING ITS OFFICE AT DISHA,
Digitally signed 3RD FLOOR, PLOT NO 5 AND 6,
by SHWETHA
RAGHAVENDRA 2ND STAGE,
Location: HIGH PEENYA INDUSTRIAL AREA IV, PEENYA,
COURT OF BENGALURU - 560058
KARNATAKA
REP BY ITS MANAGING DIRECTOR
.... RESPONDENT
(BY SRI ARUN KUMAR, LEARNED SENIOR COUNSEL FOR SRI. KEERTI KUMAR D. NAIK., ADVOCATE) THIS CMP IS FILED UNDER SECTION 11(5) OF THE ARBITRATION AND CONCILIATION ACT, 1996 PRAYING TO APPOINT MR. TUSHAR SHAH, ADVOCATE OR ANY OTHER JUDICIAL PERSON TO -2- NC: 2025:KHC:53608 CMP No. 250 of 2023 HC-KAR ACT AS AN ARBITRATOR FOR THE EFFICACIOUS AND SPEEDY RESOLUTION OF THE DISPUTES BETWEEN THE PARTIES AS PROVIDED UNDER CLAUSE 16 OF THE SAID AGREEMENT DATED 28TH JUNE 2021, VIDE ANNEXURE-A AND ETC.
THIS CMP COMING ON FOR ORDERS AND HAVING BEEN RESERVED FOR ORDERS ON 21.11.2025, THIS DAY, THE COURT PRONOUNCED THE FOLLOWING:
CORAM: HON'BLE MR. JUSTICE SURAJ GOVINDARAJ CAV ORDER
1. The Petitioner is before this Court seeking for the following reliefs:
"1. This Hon'ble Court be pleased to appoint Mr. Tushar Shah, Advocate or any other judicial person to act as an Arbitrator for the efficacious and speedy resolution of the disputes between the parties as provided under Clause 16 of the Said Agreement dated 28th June 2021, vide Annexure-A.
2. Pass any other order that this Hon'ble Court may deem fit in the interest of justice."
2. The Respondent, being in the business of automation technology that manufactures market transformers, had entered into a master rental agreement dated 28.06.2021 with Translab Equipment Solution Private Limited ('Translab' for short) for providing parking -3- NC: 2025:KHC:53608 CMP No. 250 of 2023 HC-KAR services/deliverables and equipment at the Respondent's location on a rental basis as per the terms and conditions contained in the said Agreement, which inter alia detailed the services to be provided by Translab. There being various services to be provided by Translab, the Respondent was required to make payment of the amounts as indicated in the rental schedule to the Agreement.
3. An amended agreement came to be executed on 09.07.2021, deleting Clause 12(ii) of the original Agreement, which provided an option to the Respondent to terminate the Agreement at any time, either partially or only providing 90 days' notice to Translab. Subsequent thereto, Clause 14 of the Agreement providing for assignment, a term sheet came to be issued by the Petitioner to Translab, agreeing to take over the receivables of Translab, with the obligations of delivering service continuing to be with Translab.
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NC: 2025:KHC:53608 CMP No. 250 of 2023 HC-KAR
4. The said term sheet was forwarded to the Respondent and the Respondent had accepted the same wherein it is categorically stated that the Petitioner as the assignee assumes none of the obligations of Translab and/or the supplier of the equipment, and the Respondent would continue to retain all its rights and remedies under the master rental Agreement against Translab and/or the supplier of the equipment. It is only the amounts receivable under the master rental Agreement which are assigned to the Petitioner.
5. Alleging that the Respondent did not make payment of the due amount, the Petitioner invoked the Arbitration Clause under the master rental Agreement, in terms of Clause 16 thereof, which is reproduced hereunder for easy reference:
"16. Governing Law & Dispute Resolution: This Agreement shall be subject to the exclusive jurisdiction of the courts at Bengaluru and is governed by the laws of India. Any dispute or difference arising out of or in connection with this -5- NC: 2025:KHC:53608 CMP No. 250 of 2023 HC-KAR Agreement, which cannot be settled amicably within thirty (30) calendar days from the notification of such dispute by one Party to the other Party, shall be finally settled under the Indian Arbitration and Conciliation Act, 1996 and its amendments in effect by sole arbitrator appointed mutually by parties. The place of arbitration shall be Bengaluru, India. The language of the arbitration shall be English. The final award shall be binding Parties. Parties shall fully comply and adhere with the applicable anti- corruption laws and under this Agreement."
6. A notice came to be issued on 21.02.2023, invoking the Arbitration Clause and nominating an Arbitrator. The said notice was replied to by the Respondent, stating that since there are only the receivables which were assigned, the entire Agreement not having been assigned, the arbitration agreement cannot be said to have been assigned, and there is no Arbitration agreement.
7. A detailed reply was also issued on 15.03.2023 stating that Translab had not commissioned and handed over the project; without such a handover, bills had been raised by Translab. There is complete non-performance on the part of Translab. Deficiencies having been pointed out in the work of -6- NC: 2025:KHC:53608 CMP No. 250 of 2023 HC-KAR Translab, Translab had not rectified them. Finally, Translab has not complied with the obligation, the Respondent claimed that the Agreement between the Respondent and Translab had been terminated and as such, there was no requirement to appoint an Arbitrator. It is in that background that the Petitioner had approached this Court seeking the aforesaid reliefs.
8. Notice having been issued, the Respondent has entered appearance and filed his statement of objections.
9. Sri Pramod Nair, learned Senior Counsel appearing for the Petitioner, would submit that; 9.1. There being an assignment of receivables under the Agreement and the term sheet having been endorsed by the Respondent, the arbitration agreement would also be binding on the parties -7- NC: 2025:KHC:53608 CMP No. 250 of 2023 HC-KAR and as such, the Petitioner would be entitled to invoke the Arbitration Clause.
9.2. His submission is that the receivables being under the master rental Agreement, the Arbitration Clause under the master rental Agreement would enure to the benefit of the Petitioner even though the Respondent claims that the Agreement with the Translab has been terminated. In view of the amended Agreement deleting Clause 12 (ii), there is no right vested with the Respondent to terminate the Agreement; that issue is a matter of fact which should be decided by an Arbitrator. 9.3. Respondent having availed of service from Translab, emails had been issued by the Petitioner to the Respondent, calling upon the Respondent to make payment of the due amounts, the amounts not having been paid, -8- NC: 2025:KHC:53608 CMP No. 250 of 2023 HC-KAR there is an arbitrable dispute between the parties, which was not amicably settled within 30 days, and as such, the Petitioner has invoked the Arbitration Clause. 9.4. He has referred to various decisions, namely the decision in Lifeforce Cryobank Sciences V. Cryoviva Biotech (P) Ltd.,1 the decision in DLF Power Ltd., V. Mangalore Refinery & Petrochemicals Ltd.,2 the decision in Siemens Factoring Pvt. Ltd., V. Future Enterprises Pvt. Ltd.,3 the decision in Bestech India (P) Ltd., V. MGF Developments Ltd.,4 and the decision in Cox & Kings Ltd., V. SAP India (P) Ltd.5 9.5. The sum and substance of all those decisions which have been relied upon by Sri Pramod 1 2024 SCC Online SC 3215 2 2016 SCC Online Bom 5069 3 Commercial Arbitration Application.No.174/2022 4 2009 SCC Online Delhi 698 5 (2024) 4 SCC 1 -9- NC: 2025:KHC:53608 CMP No. 250 of 2023 HC-KAR Nair, learned Senior Counsel for the Petitioner is to urge that there being an assignment of the Agreement, the Arbitration Clause would also stand assigned, and therefore, the Petitioner would be entitled to invoke the Arbitration Clause. I am not extracting the relevant paragraphs of judgments due to the orders that I propose to pass, so as not to bulk the record.
10. Sri Arun Kumar, learned Senior Counsel for the Respondent, would submit that;
10.1. The Agreement between the Respondent and Translab has been terminated on account of Translab not having rendered any services. Hence, the question of making payment of any monies would not arise.
10.2. His submission is also that, only receivables which had been assigned, the entire Agreement has not been assigned, and therefore, the
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NC: 2025:KHC:53608 CMP No. 250 of 2023 HC-KAR Petitioner cannot claim assignment of the Arbitration Clause to invoke it. 10.3. He relies upon the decision of the Hon'ble Apex Court in Hindustan Petroleum Corporation Ltd., Vs. BCL Secure PRmises Pvt. Ltd.6, more particularly, para Nos.35 and 38 thereof, which are reproduced hereunder for easy reference:
"35. This does not mean that where the Referral Court finds prima facie a party is not a veritable party still the matter is left to the Arbitral Tribunal. To hold so, would relegate the Referral Court to the status of a monotonous automation. Further, to countenance such an extreme proposition would lead to disastrous consequences, where absolute strangers could walk into the Referral Court and contend that the matter has to perforce go to the Arbitral Tribunal for a decision on the veritable nature of the party. We are not prepared to accept such an extreme proposition.
38. Apart from the above, not only has the respondent not shown any consent for assignment as required under clause 3.17 of the tender document, nothing even prima facie has been shown to establish that there was any semblance of an intent to effect legal relationship between the respondent and the party originally granting the contract 6 Civil Appeal No.14647/2025
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NC: 2025:KHC:53608 CMP No. 250 of 2023 HC-KAR and/or to indicate that the respondent was a veritable party."
10.4. By relying on BCL Secure Premises case, his submission is that Section 11 Court would have to decide on whether a person is a party to an arbitration or not, and the same cannot be left to be decided by the Arbitral Tribunal in all the cases. Unless there is a legal relationship which is established, a party cannot be referred to an arbitration.
11. Heard Sri Pramod Nair, learned Senior Counsel for the Petitioner, Sri Arun Kumar, learned Senior Counsel for the Respondent and perused papers.
12. This is a peculiar case and would have to be decided on the facts of the matter. There can be no dispute about the principles laid down in the decisions relied upon by Sri Pramod Nair, learned Senior Counsel for the Petitioner. Admittedly, a master rental
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NC: 2025:KHC:53608 CMP No. 250 of 2023 HC-KAR agreement was entered into between Translab and Respondent. It is only the receivables under said Agreement which are assigned by Translab in favour of the Petitioner. The obligations under the Agreement for which the amounts were to be paid by the Respondent continue to be with that of Translab and/or the suppliers that is to say that without performance of the obligations by Translab, there will be no receivables required to be collected by the Petitioner.
13. The contention of the Respondent is that the Agreement has been terminated. The contention of the Petitioner is that the Agreement cannot be terminated. Be that as it may, the aspect of continuance of the services and/or whether the Agreement is terminable or not, cannot be for the Petitioner to contend inasmuch as what has been assigned is only the receivables and the service contract continued bwtween Translab and the
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NC: 2025:KHC:53608 CMP No. 250 of 2023 HC-KAR Respondent. Admittedly, Translab is not a party to these proceedings. No notice has been issued by Translab, nor has any action been taken by the Petitioner along with Translab. The said conduct, apart from being suspicious, only reinforces the situation that the Petitioner intends to claim payments for the works allegedly done by Translab, when the Respondent contends that Translab has not done those works, suffice it to say that without the Petitioner establishing that Translab has done the work, the question of the Petitioner claiming any amount should not arise.
14. Translab not being a party to these proceedings, I am of the considered opinion that in the absence of Translab, the Petitioner cannot claim any amounts or initiate any proceedings. More so, when the Agreement is alleged to have been terminated by the Respondent and Translab has not taken any action in relation thereto.
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15. The question of the Petitioner claiming that the Agreement cannot be terminated and continues to be enforced is not sustainable without Trabslab asserting that by challenging the termination, what is to be taken into consideration is that it is only the receivables which have been assigned to the Petitioner, the other parts of the Agreement have not been assigned. Without those parts of the Agreement being performed, there would be nothing for the Petitioner to receive by way of assignment.
16. These factors going to the root of the matter. Hence, I am of the considered opinion that these peculiar facts would require this Court to consider these aspects before appointment of an Arbitrator and if these aspects are considered, it would only result in an irresistible conclusion that without Translab, no arbitral proceedings can be maintained and no claim can be made by the Petitioner. For that reason, no arbitration notice having been issued to Translab,
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NC: 2025:KHC:53608 CMP No. 250 of 2023 HC-KAR requirement of Section 21 not having been complied with, Translab cannot be subsequently made a party to the arbitral proceedings. As such, the invocation of the arbitral clause only against the Respondent without Translab being a party cannot be sustained. In that background, I am of the opinion that no Arbitrator can be appointed, as such, the petition stands dismissed.
SD/-
(SURAJ GOVINDARAJ) JUDGE KTY List No.: 2 Sl No.: 1