Karnataka High Court
M/S Abb India Ltd vs Wb Precision Engineering Solutions (P) ... on 7 December, 2018
Author: Chief Justice
Bench: Dinesh Maheshwari
C.M.P.No.139/2018
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 7TH DAY OF DECEMBER, 2018
BEFORE
HON'BLE MR.JUSTICE DINESH MAHESHWARI, CHIEF JUSTICE
CIVIL MISCELLANEOUS PETITION NO.139 OF 2018
BETWEEN:
M/S ABB INDIA LTD
(FORMERLY CALLED ABB LIMITED)
A COMPANY UNDER THE COMPANIES ACT 1956
2ND FLOOR, EAST WING, KHANIJA BHAVAN,
RACE COURSE ROAD,
BANGALORE - 560001.
NOW HAVING ITS REGD OFFICE
AT: 21ST FLOOR,
WORLD TRADE CENTRE,
BRIGADE GATEWAY, NO.26/1,
DR. RAJAKUMAR ROAD,
MALLESHWARAM WEST,
BENGALURU - 560555.
REPRESENTED BY MS. SUNEETHA .N
MANAGER - LEGAL
AGED ABOUT 37 YEARS,
... PETITIONER
(BY SRI KEERTIKUMAR D NAIK, ADVOCATE)
AND:
WB PRECISION ENGINEERING SOLUTIONS (P) LTD
A COMPANY UNDER THE COMPANIES ACT 1956,
REGISTERED OFFICE AT: 1B,
JATINDRANATH BASU SARANI
KOLKATA - 700004, WEST BENGAL
REPRESENTED BY ITS MANAGING DIRECTOR
... RESPONDENT
(RESPONDENT - SERVED)
---
C.M.P.No.139/2018
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THIS CIVIL MISC. PETITION IS FILED UNDER
SEC.11(6)(A) OF THE ARBITRATION AND CONCILIATION ACT
1996, PRAYING THIS HON'BLE COURT TO A) APPOINT THE
SECOND ARBITRATOR (NOMINEE OF THE RESPONDENT) TO
ENTER INTO REFERENCE OF THE DISPUTES BETWEEN THE
PETITIONER AND THE RESPONDENTS ARISING OUT OF
AGREEMENT DATED: 08/10/2013 TITLED THE 'THIRD PARTY
CHANNEL AGREEMENT' AT ANNEXURE A & ETC.
THIS PETITION COMING ON FOR ADMISSION THIS DAY,
THE COURT, MADE THE FOLLOWING:
ORDER
By way of this application under Section 11 of the Arbitration and Conciliation Act, 1996 ('the Act of 1996'), the petitioner has made the request for appointment of Arbitrator to adjudicate upon and decide all his disputes with the respondent, arising out of, and relating to, the Third Party Channel Agreement dated 08.10.2013 (Annexure A).
Put in brief, the relevant background aspects of the matter are that the petitioner -company, ABB India Limited (formerly ABB Limited), said to be engaged in the business of power and automation technologies and supplies various electrical products, had entered into a "Third Party Channel Agreement" on 08.10.2013 with the respondent -WB Precision Engineering Solutions (P) Limited, said to be C.M.P.No.139/2018 -3- engaged in the business of supply of Distributed Control Systems. The petitioner submits that as per the said agreement, the respondent agreed to sell the products and services of the petitioner in the specific territories; and pursuant to this agreement, various purchase orders were issued by the respondent for products/services of the petitioner, who in turn supplied the relevant materials and raised invoices, while maintaining a running account towards the same. The petitioner has stated the grievance that a sum of Rs.1,00,47,961.21 with applicable interest was due to be paid against the invoices so raised, but the respondent has failed to make payment to the petitioner despite several requests.
The petitioner has averred that for the respondent having failed to make the due payment, a notice dated 17.11.2017 was served in terms of the agreement, whereby the respondent was called upon to refer the dispute to arbitration. However, despite receiving the notice, the respondent has failed to take steps for appointment of arbitrator.
C.M.P.No.139/2018-4-
The petitioner has referred to the arbitration clauses contained in the agreement and the appendices thereto and has submitted that for the respondent having failed to nominate the Arbitrator as per the agreement, this Court may appoint an independent Arbitrator to adjudicate upon the disputes between the parties.
Despite service, nobody has appeared for the respondent.
Heard the learned counsel for the petitioner and examined the record.
The limited aspect required to be considered in this application is as to whether there exists an arbitration agreement between the parties?
In fact, the existence of an arbitration agreement in this matter is apparent on the face of the record. The arbitration agreement is contained in various clauses of the said agreement dated 08.10.2013. In the principal part of the agreement, the dispute resolution is provided as under: C.M.P.No.139/2018 -5-
"14. DISPUTES AND APPLICABLE LAW 14.1 The AGREEMENT shall be governed by the substantive laws of India excluding its conflict of laws provisions.
14.2 All disputes arising out of or in connection with the AGREEMENT shall be finally settled under the Rules of Arbitration as per the Arbitration and Conciliation Act, 1996. The language of the proceedings and of the award shall be English. The decision of the arbitrators shall be final and binding upon both parties, and neither party shall seek recourse to a law court or other authority to appeal for revisions of the decision. However, ABB shall not be prevented from seeking an injunction or other interim remedy in a competent court of the country where its rights under the AGREEMENT are infringed."
Further, it is provided in the "General Terms and Conditions for Sale" as appended to the agreement that:
"14. ARBITRATION In case of any breach of contract/ disputes/differences arising under or in connection with this agreement, which can not be settled by friendly negotiation and agreement amongst the parties, this offer a subjected to the standard arbitration clause in accordance with the provisions of the arbitration and conciliation act 1996. The venue of arbitration proceedings shall be Bangalore, India. The parties shall equally share the cost of the arbitration."C.M.P.No.139/2018 -6-
Moreover, in Appendix III to the agreement, the parties have provided as under:
"12. This Agreement shall be governed by and interpreted in accordance with substantive Indian law. All disputes arising out of or in connection with this Agreement shall be finally settled under the Arbitration and Conciliation Act, 1996, by single arbitrator appointed by ABB. The venue of arbitration shall be at Bangalore, and the language of arbitration shall be English. The decision of the arbitrator shall be final and binding on both parties. "
From the material placed on record, it is evident that the petitioner issued notice proposing for appointment of Arbitrator, but the respondent did not take steps for appointment of Arbitrator as required by the aforesaid arbitration agreement between the parties.
When the parties stand at conflict and the disputes do exist, which have not been resolved; and for the reason of failure of the procedure for appointment of Arbitrator, it is just and proper that an independent arbitrator be appointed to adjudicate upon and decide the disputes between the parties, including their claims, counter-claims and objections. C.M.P.No.139/2018 -7-
Learned counsel for the petitioner has agreed to the appointment of Hon'ble Shri Justice Ajit J. Gunjal, Former High Court Judge, to act as an Arbitrator to resolve the disputes between the parties under the provisions of the Act of 1996, as per the Rules governing the Arbitration Centre at Bengaluru.
Accordingly, this petition is disposed of by appointing Hon'ble Shri Justice Ajit J. Gunjal, Former High Court Judge, to enter into the reference and to act as an Arbitrator in the present case in the Arbitration Centre, Bengaluru, as per the Rules governing the said Arbitration Centre.
In the interest of justice, it is made clear that the Arbitrator shall adjudicate upon and decide all the disputes between the parties including their claims, counter-claims and objections relating to the agreement in question. The requirements of the Arbitration and Conciliation Act, 1996, [as amended by the Arbitration and Conciliation (Amendment) Act, 2015], shall be complied with by all the concerned.
Needless to observe that all the questions arising between the parties in this matter shall remain open for determination in the arbitration proceedings. C.M.P.No.139/2018 -8-
A copy of this order be sent to the Arbitration Centre, Khanija Bhavan, Bengaluru, for proceeding further in the matter on administrative side and also to Hon'ble Shri Justice Ajit J. Gunjal, on the address available with the said Arbitration Centre, Bengaluru.
Sd/-
CHIEF JUSTICE ca/bkv