Karnataka High Court
M/S Atria Convergence Technologies Pvt ... vs M/S R G Network @ M/S Raghavendra Cable ... on 20 September, 2018
Author: Chief Justice
Bench: Dinesh Maheshwari
C.M.P.No.115/2011
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 20TH DAY OF SEPTEMBER, 2018
BEFORE
HON'BLE MR.JUSTICE DINESH MAHESHWARI, CHIEF JUSTICE
CIVIL MISCELLANEOUS PETITION NO. 115 OF 2011
BETWEEN:
1.M/s.Atria Convergence Technologies Pvt. Ltd.
A company registered under the provisions of
The Companies Act, 1956 having its office at
Trade Center, 4th Floor, No.29/4,
Race Course Road,
Bangalore-560 001
Represented by its Authorised Signatory
Mr.P.Kailasam
2.M/s.Atria Broadband Services Pvt. Ltd.
A company registered under the provisions of
The Companies Act, 1956 having its office at
Trade Center, 4th Floor, No.29/4,
Race Course Road,
Bangalore-560 001
Represented by its Authorised Signatory
Mr.P.Kailasam ... PETITIONERS
(By Sri.B. Vachan, Advocate)
AND:
M/s.R.G. Network @ M/s.Raghavendra Cable Vision,
No.20, Sweet Water Well Road,
Bhovi Colony, Nagashetty Halli,
Bangalore-560 094
Represented by Mr.N.M. Devaraj. ... RESPONDENT
(By Sri. Ravindranath.K., Advocate)
---
This Civil Miscellaneous Petition is filed under Sec.11(5) of
the Arbitration and Conciliation Act 1996, praying to appoint a sole
arbitrator to adjudicate the dispute between the petitioner and the
C.M.P.No.115/2011
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respondents arising under the MOU dated 27.06.2001 in the ends
of justice and equity.
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 petitioners have made the request for appointment of Arbitrator to adjudicate upon and decide all their disputes with the respondent, arising out of, and relating to, the Memorandum of Understanding ('MOU') dated 27.06.2001.
The petitioners are said to be engaged in the business of installing, operating and developing a cable television network, catering to the requirement of private home end- users and/or commercial establishments in the areas of multiple communications and entertainment services, including cable and satellite television, internet and allied services. The respondent is said to be a cable operator engaged in the business of distributing and networking cable TV signals in Nagashettyhalli and surrounding areas.
It is the case of the petitioners that they entered into MOU on 27.06.2001 with the respondent, pursuant to which, all the assets and business rights, goodwill and customer C.M.P.No.115/2011 -3- patronage, network connections, etc., but excluding all its liabilities were to be transferred to a new joint venture company at a pre-determined value, as laid out in the MOU. In the joint venture company, the petitioners were holding 51% of the paid up equity share capital and the respondent was holding 49%. As per the terms of the MOU, the petitioners paid a sum of Rs.4,60,650/- to the respondent towards the acquisition of 51% share in the value of the business of the respondent. In addition, the petitioners also paid Rs.3,40,000/- in September 2009 towards acquisition of additional points in the network. Apart from the said payments, the petitioners also paid Rs.1,00,000/- and Rs.50,000/- respectively through the cheques drawn on Andhra Bank and State Bank of India respectively. It is alleged that the respondent never came forward nor co-operated with the petitioners to form the joint venture company and periodically sought to evade his obligations under the MOU and tried to disconnect the signals of the petitioners while obtaining the same from a third party. In this regard, a police complaint was lodged by the petitioners against the respondent.
C.M.P.No.115/2011-4-
It is further submitted that in the year 2008, the respondent sought to repeat the same action. Whereupon, the petitioners filed A.A.No.342/2008 and obtained an interim order restraining the respondent or his agents from taking or obtaining link and or cable TV signals in any manner other than the signals or link of the petitioners. After this order, the petitioners and respondent mutually settled their differences and filed a compromise petition. It is the case of the petitioners that as per the terms of compromise, the terms of the MOU were reiterated and till date, the petitioners are acting in accordance with the MOU and the compromise deed but the respondent has failed to do the same and has not come forward to incorporate the joint venture company.
It is pointed out that the respondent has caused issuance of a legal notice dated 31.03.2011 terminating the MOU and further called upon the petitioners to pay damages to an extent of Rs.5,00,000/- failing which, the respondent has also threatened to initiate criminal proceedings against the petitioners.
It is submitted that since the respondent had failed to perform his obligations, the petitioners served legal notice to C.M.P.No.115/2011 -5- the respondent on 04.07.2011 invoking the arbitration clause suggesting the name of Sole Arbitrator to settle the disputes. Since the respondent did not agree for the same as per the agreement, the petitioners have filed the present petition seeking appointment of an independent Arbitrator to adjudicate upon the disputes between the parties.
Learned counsel for the respondent frankly submits that disputes do exist and hence, a Sole Arbitrator may be appointed to resolve the disputes between the parties.
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 11 in the MOU, reads as under:
"All disputes, controversies, or differences which may arise between the Parties, out of or in relation to or in connection with this Agreement, or for the breach thereof, shall be finally settled by arbitration in Bangalore and the arbitration shall be governed by the Arbitration and Conciliation Act, 1996 and Arbitration Conciliation Rules, 1996 or any statutory amendment or re-enactment thereof ."C.M.P.No.115/2011 -6-
From the material placed on record, it is evident that the petitioner issued notice proposing for appointment of Arbitrator. The respondents rejected the name of the Arbitrator suggested by the petitioner but 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.
Now, learned counsel for the parties have fairly agreed to the appointment of a Retired District Judge, namely, Sri G. Raghavendra Rao 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 Sri G. Raghavendra Rao, a Retired District Judge, to enter into the said reference and to act as an Arbitrator in the C.M.P.No.115/2011 -7- 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.
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 Sri. Raghavendra Rao, on the address available with the said Arbitration Centre, Bengaluru.
Sd/-
CHIEF JUSTICE alb/-