Karnataka High Court
Express Publications (Madurai) ... vs Sonata Information Technology Limited on 16 August, 2022
Author: Suraj Govindaraj
Bench: Suraj Govindaraj
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CMP No. 559 of 2021
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 16TH DAY OF AUGUST, 2022
BEFORE
THE HON'BLE MR JUSTICE SURAJ GOVINDARAJ
CIVIL MISC. PETITION NO. 559 OF 2021
BETWEEN:
EXPRESS PUBLICATIONS (MADURAI) PRIVATE
LIMITED
HAVING ITS REGISTERED OFFICE AT
EXPRESS GARDENS
NO.29, 2ND MAIN ROAD
AMBATTUR INDUSTRIAL ESTATE
CHENNAI-600058
REPRESENTED BY ITS AUTHORISED SIGNATORY
MR. P. SURESH KUMAR
...PETITIONER
(BY SRI. MANMOHAN P N, ADVOCATE)
AND:
SONATA INFORMATION TECHNOLOGY LIMITED
HAVING ITS REGISTERED OFFICE AT
NO.208, TV INDUSTRIAL ESTATE
K. AHIRE MARG WORLI
MUMBAI-400030
Digitally signed by
POORNIMA
SHIVANNA
ALSO HAVING CORPORATE OFFICE AT
Location: HIGH
COURT OF
NO.1/4, APS TRUST BUILDING
KARNATAKA
1ST, FLOOR, BULL TEMPLE ROAD
NR COLONY
BANGALORE-560019
REPRESENTED BY ITS DIRECTOR.
...RESPONDENT
(BY SRI B.G.GAURAV MANDAPPA, ADVOCATE FOR
SRI GEORGE JOSEPH, ADVOCATE)
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CMP No. 559 of 2021
THIS CIVIL MISC. PETITION UNDER SEC.11(5) OF THE
ARBITRATION AND CONCILIATION ACT 1996, PRAYING THIS
HON'BLE COURT TO APPOINT AN ARBITRATOR AS PER CLAUSE
(U) OF THE STATEMENT OF WORK/AGREEMENT DATED
30/03/2020 (PRODUCED AS ANNEXURE-A) AND PASS SUCH
OTHER ORDERS AS DEEMED FIT IN THE FACTS AND
CIRCUMSTANCES OF THE CASE IN THE INTEREST OF JUSTICE
AND EQUITY.
THIS PETITION COMING ON FOR ADMISSION, THIS DAY,
THE COURT MADE THE FOLLOWING:
ORDER
1. The petitioner is before this court seeking for the following relief:-
"Wherefore it is prayed that this Hon'ble Court may be pleased to appoint an arbitrator as per Clause (u) of the Statement of Work/Agreement dated 30.03.2020 (produced as Annexure-"A") and pass such other orders as deemed fit in the facts and circumstances of the case in the interest of justice and equity."
2. The petitioner claims to be a newspaper publishing company, who had entered into two separate agreements with the respondent for providing software solutions and services. Under one of the agreements, the respondent was required to provide -3- CMP No. 559 of 2021 Adobe licenses and services and under the another agreement dated 30.03.2020, the respondent was required to provide Oracle Data Base Support.
3. Alleging that the petitioner had not made payment towards the Adobe license, the respondent vide its email dated 29.01.2021, stopped support for Oracle Data Base Services. In this background, the petitioner had called upon the respondent to resolve the dispute amicably which did not resolve and as such, the petitioner had invoked the arbitration clause under the work order dated 30.03.2020 more particularly, clause 'U' thereof, which is reproduced hereunder for easy reference:-
"Dispute Resolution: The Parties shall communicate in good faith to attempt to resolve all misunderstandings or disputes between them. However, in the event the Parties are unable to resolve a matter between them, it shall be resolved by a binding arbitration, which shall be held in accordance with The Arbitration and Conciliation Act, 196 ("Act"). Any controversy or claim arising out of or -4- CMP No. 559 of 2021 relating to this SOW shall be finally determined by a sole arbitrator mutually appointed by the Parties. In the event the Parties are unable to agree upon the sole arbitrator, the arbitrator shall be appointed in accordance with the provisions of the Act. The venue for arbitration shall be Bangalore. Subject to the above, the competent courts in Bangalore shall have exclusive jurisdiction to settle any disputes arising out of this SOW."
4. The petitioner, vide notice dated 07.11.2021, had provided a panel of three Arbitrators for the respondent to choose for arbitrating the dispute. However, the same was not concurred with by the respondent, as such, the petitioner is before this court.
5. Sri Manmohan.P.N, learned counsel appearing for the petitioner submits that:
5.1. It is on account the services relating to Oracle Data Base management not being provided, the petitioner incurred several losses and damages, which was the cause of notice dated -5- CMP No. 559 of 2021 07.11.2021, as such, the dispute is required to be referred to the arbitration.
5.2 As regards the alleged Adobe license dues, the respondent initiated proceedings under the Insolvency and Bankruptcy Code which is now pending before the NCLT which also could not be done due to the existence of the arbitration clause. As such, both the disputes are required to be referred to the arbitration.
6. Sri B.G.Gaurav Mandappa, learned counsel appearing for the respondent submits that:
6.1 The petitioner is seeking to club two different contracts and two different arbitration clauses, which is not permissible, inasmuch as there is a separate agreement relating to Adobe services and separate work order relating to Oracle Data Base services.
-6-CMP No. 559 of 2021 6.2 The dispute in the legal notice being that as regards Oracle Data Base Services, the question of referring the dispute as regards Adobe License fees would not arise.
7. Heard Sri Manmohan.P.N, learned counsel for the petitioner and Sri B.G.Gaurav Mandappa, learned counsel appearing for the respondent and perused the papers.
8. Admittedly, there are two agreements between the petitioner and the respondent, one as regards to the Adobe License and other as regards to the Oracle Data Base Services. The service as regards Adobe license has not been suspended, however, there is a claim made by the respondent as regards the payments due alleging that those payments were due, the services as regards the Oracle Data Base Services were suspended.
9. As regards the license fees due under the Adobe agreement, separate proceedings have been initiated by the respondent under the Insolvency and Bankruptcy Code.
-7-CMP No. 559 of 2021
10. The contention of Sri Manmohan.P.N, learned counsel for the petitioner is that by invoking the dues under the Adobe agreement, the performance of Oracle agreement has been suspended resulting in losses and damages to the petitioner. The petitioner, firstly, does not have any dispute or a claim insofar as Adobe agreement is concerned, inasmuch it is the respondent who has initiated proceedings under the Insolvency and Bankruptcy Code. If at all the petitioner is aggrieved by the same, the petitioner could file necessary proceedings under Section 8 of the Arbitration and Conciliation Act, 1996 seeking for reference of that matter to the arbitration. The dispute raised by the petitioner is only as regards the losses caused on account of suspension of Oracle Data Base Services agreement. The NCLT proceedings have been filed by the respondent. The respondent not having issued any arbitration notice and/or not being before this Court, the question of -8- CMP No. 559 of 2021 this Court being required to consider those disputes would not arise.
11. The same not being the subject matter of the present matter, this court is not expressing any opinion as regards the Adobe agreement. As regards the Oracle Data Base Services agreement, admittedly, there is a dispute between the parties as regards which notices and replies have been exchanged.
12. There being a dispute which is required to be resolved in terms of clause 'U' of the work order dated 30.03.2020, I am of the considered opinion that the same is required to be resolved by way of arbitration as agreed by the parties. In view thereof, I pass the following:-
ORDER
a) This petition is allowed-in-part.
b) Sri P.Krishna Bhat, A Former Judge of this court is appointed as a sole Arbitrator with the -9- CMP No. 559 of 2021 consent of both the counsel for the parties to arbitrate the dispute between the parties under the aegis of the Arbitration Centre attached to this court.
c) Registry is directed to communicate the above order to the Director, Arbitration Centre for doing the needful.
d) All contentions are left open.
Sd/-
JUDGE
KPS
List No.: 1 Sl No.: 17