Karnataka High Court
Pellagic Food Ingredients Private ... vs Oceanic Edibles International Limited on 9 October, 2018
Equivalent citations: AIRONLINE 2018 KAR 1222
Author: Chief Justice
Bench: Dinesh Maheshwari
C.M.P.No.300/2016
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 9TH DAY OF OCTOBER, 2018
BEFORE
HON'BLE MR.JUSTICE DINESH MAHESHWARI, CHIEF JUSTICE
CIVIL MISCELLANEOUS PETITION NO.300 OF 2016
BETWEEN:
PELLAGIC FOOD INGREDIENTS PRIVATE LIMITED
(A COMPANY INCORPORATED UNDER THE
COMPANIES ACT, 1956)
HAVING ITS REGISTERED OFFICE AT:
A BLOCK, AECS LAYOUT, KUDU GATE
NEAR CHAITANYA SCHOOL
BANGALORE - 560 068
REPRESENTED BY ITS MANAGING DIRECTOR
MR. RAMAKANT MISHRA
... PETITIONER
(BY SRI GOUTAMADITYA S., ADVOCATE)
AND:
OCEANIC EDIBLES INTERNATIONAL LIMITED
(A COMPANY INCORPORATED UNDER THE
COMPANIES ACT, 1956)
HAVING ITS CORPORATE OFFICE AT:
WELLINGTON ESTATE, ETHIRAJ SALAI,
EGMORE
CHENNAI - 600 008
AND
FACTORY AT:
OCEANIC EDIBLES INTERNATIONAL LIMITED
PUDUKUPPAM VILLAGE, MANDAVA POST
MARKKNAM, TINDIVANAM TK
VILLUPURAM DISTRICT
TAMILNADU - 604 303.
... RESPONDENT
(BY SRI PRASHANTH P.N., ADVOCATE-ABSENT)
C.M.P.No.300/2016
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THIS CIVIL MISCELLANEOUS PETITION IS FILED
UNDER SECTION 11(4)(a) OF THE ARBITRATION AND
CONCILIATION ACT 1996 R/W RULE 2 OF THE APPOINTMENT
OF ARBITRATORS BY THE CHIEF JUSTICE OF KARNATAKA
HIGH COURT SCHEME, 1996, PRAYING THIS HON'BLE COURT
TO A. APPOINTING HON'BLE MR. JUSTICE JAGANNATHAN
(RETD.) AS SOLE ARBITRATOR TO ADJUDICATE THE
DISPUTES BETWEEN THE PARTIES AND ETC.
THIS PETITION COMING ON FOR ADMISSION THIS DAY,
THE COURT, MADE THE FOLLOWING:
ORDER
None present for the respondent though the matter has been called out twice over. On the last occasion also, i.e., on 25.09.2018, nobody was present. There appears no reason to keep this petition pending any further.
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 its disputes with the respondent, arising out of, and relating to, the Memorandum of Agreement dated 24.05.2016.
The petitioner-Company is carrying on the business of marketing and exporting various food and fruit products. The petitioner approached the respondent to process Totapuri C.M.P.No.300/2016 -3- Mango dices for being marketed and exported to its customers all over the world. The respondent assured that it was possessing the necessary equipments, machinery and expertise to process the same; and accordingly, the aforesaid agreement dated 24.05.2016 was executed between them. It is contended that the respondent delayed the process of unloading the mangoes supplied by the petitioner and further insisted on rejections amounting to 20% to 30% of the fruits during production. Since the season was drawing to a close and there was loss in business due to the delays caused by the respondent, the petitioner gave concession to the respondent for procuring the mangoes on its own and a further concession for processing the rejections into Mango pulp. Despite such concessions, the respondent did not take steps to procure mangoes between 14.06.2016 to 23.06.2016 and failed to fulfill its contractual obligations.
It is further contended that the respondent did not meet with the requirements of the petitioner regarding quantity and quality of the finished goods. Despite these lapses, the respondent raised invoice dated 08.07.2016, which the C.M.P.No.300/2016 -4- petitioner refused to clear. On the other hand, the petitioner caused a legal notice dated 06.09.2016 stating that it has incurred huge loss in procuring the material required at a higher rate from other vendors in order to supply the finished goods to its customers and therefore, made a demand for a sum of Rs.74,24,778.80/- along with interest failing which, arbitration clause would be invoked. Since the respondent did not respond to the said notice, the petitioner caused another legal notice dated 18.10.2016 invoking the arbitration clause and suggesting the name of Sole Arbitrator to settle the disputes between the parties.
It is submitted that the respondent having failed to respond to the said notice also and having failed to nominate the Arbitrator as per the agreement, this Court may appoint an independent Arbitrator to adjudicate upon the dispute between the parties.
Heard learned counsel for the petitioner and examined the record.
C.M.P.No.300/2016-5-
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 arbitration agreement in this matter is apparent on the face of the record. The arbitration clause, being Clause 5 in the agreement, reads as under:
"The two parties shall amicably settle the disputes arising during the performance of the contract. Should no settlement of disputes or such difference of opinion be made amicably, then the disputes and difference of opinion shall be settled under the jurisdiction of Bangalore, Karnataka in accordance with its Arbitration Rules. The decision of the said arbitration shall be final and binding upon 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 C.M.P.No.300/2016 -6- adjudicate upon and decide the disputes between the parties, including their claims, counter claims and objections.
Learned counsel for the petitioner has agreed to the appointment of a Former Judge of this Court, namely, Hon'ble Shri Justice Subhash B.Adi 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 Subhash B.Adi, a Former Judge of this Court, to enter into the said 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 C.M.P.No.300/2016 -7- 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.
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 Subhash B.Adi, on the address available with the said Arbitration Centre, Bengaluru.
Sd/-
CHIEF JUSTICE ca