Karnataka High Court
M/S Kar Care vs M/S 3 M India Limited on 30 June, 2022
Author: Suraj Govindaraj
Bench: Suraj Govindaraj
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CMP No. 163 of 2021
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 30TH DAY OF JUNE, 2022
BEFORE
THE HON'BLE MR JUSTICE SURAJ GOVINDARAJ
CIVIL MISC. PETITION NO. 163 OF 2021
BETWEEN:
M/S KAR CARE
A PARTNERSHIP FIRM AT
NO.1 AND 2, VAISHNAVI LAYOUT
VIDYARANYAPUA, BENGALURU-560097
REP. BY ITS MANAGING PARTNER
SRI. RAMAKRISHNA RAO. P
...PETITIONER
(BY SRI. BAPAT SAMPATH VINAYAKA RAO, ADVOCATE)
AND:
M/S 3M INDIA LIMITED
REGD. OFFICE: PLOT NO.48-51
ELECTRONICS CITY, HOSUR ROAD
BENGALURU-560100
ALSO AT:
CORPORATE OFFICE: CONCORDE BLOCK
UB CITY, 24, VITTALMALLYA ROAD
BENGALURU-560001
Digitally signed REP BY ITS MANAGING DIRECTOR
by POORNIMA
SHIVANNA ...RESPONDENT
Location: HIGH (BY SMT. USHA.L, ADVOCATE FOR
COURT OF
KARNATAKA SRI. SHUJATH AHMED, ADVOCATE)
THIS CMP IS FILED UNDER SECTION 11(5) OF THE
ARBITRATION AND CONCILIATION ACT, 1996, PRAYING TO APPOINT
A SOLE ARBITRATOR TO RESOLVE THE DISPUTES AND
OUTSTANDING ISSUES BETWEEN THE PARTIES IN ACCORDANCE
WITH THE PROVISIONS OF THE FRANCHISE AGREEMENT DATED
06/12/2018 AND IN ACCORDANCE WITH ARBITRATION AND
CONCILIATION ACT, 1996 IN THE INTEREST OF JUSTICE.
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CMP No. 163 of 2021
THIS CMP COMING ON FOR ADMISSION, THIS DAY THE
COURT MADE THE FOLLOWING:
ORDER
1. The petitioner is before this Court seeking for the following reliefs:
"To appoint a sole arbitrator to resolve the disputes and outstanding issues between the parties in accordance with the provisions of the Franchise Agreement dated 06/12/2018 and in accordance with Arbitration and Conciliation Act, 1996 in the interest of justice".
2. The petitioner claims that the petitioner had entered into an agreement dated 29.02.2016 with the respondent, which is governed by an arbitration clause in terms of Article 32 thereof, which is reproduced hereunder for easy reference:
Article 32 APPLICABLE LAW AND SETTLEMENT OF DISPUTES
1. This agreement and the rights and obligations of the Parties hereunder shall be construed and interpreted in accordance with Indian substantive and procedural laws, applicable to Agreements made and to be performed entirely therein.
2. The Parties shall attempt in good faith to resolve any dispute, difference or claim arising out of or in relation to this Agreement through mutual discussion. In case it is not resolved within 30 days from receipt of the written notice (setting out the -3- CMP No. 163 of 2021 dispute or claim) by the other part, the complaining party may issue a notice of reference, invoking settlement of such dispute through arbitration.
Arbitration: All disputes and differences arising between the parties hereto as also between the Franchisor and the Franchisee, including any dispute or difference in regard to the interpretation of any party against the other or in regard to the rights and obligations of any party or parties under this contract or otherwise save and except the day to day penalty as mentioned above shall be governed by the provisions of the Arbitration and Conciliation Act 1996 or its modifications thereof absolutely and fully, provided that the for any of the purposes under the said Act shall be the original jurisdiction of the Hon'ble High Court at Bangalore. Each of the parties will be entitled to nominate one person to act as an Arbitrator from its side. The arbitrators of the parties shall appoint a third Arbitrator or both parties may, after consultation and acceptance nominate sole arbitrator. All such arbitrator/s must be the resident of Bangalore region and the hearing must take place at Bangalore. English shall be the language of the arbitral proceedings.
3. In case of disputes with regard to nomination of arbitrators the matter shall only be referred to the Bangalore Court for appointment and/or nomination of an Arbitrator or Arbitrators and to no other Court or jurisdiction.
3. The disputes having been arisen, the petitioner had invoked the arbitration clause vide notice dated 21.12.2020 and nominated its arbitrator. Despite the same being served, no reply was received.
-4- CMP No. 163 of 2021Hence, the petitioner is before this Court seeking for the aforesaid reliefs.
4. Notice having been ordered, the respondent has entered appearance and filed its Statement of Objections contending that the agreement relied upon by the petitioner is superseded by another agreement dated 31.12.2018.
5. On enquiry whether there is any material difference from earlier agreement produced by the petitioner, learned counsel for the respondent fairly submits that there is no such difference as regards the arbitration clause but however submits that as regards the other clauses there may be slight differences. The arbitration clause in the agreement produced by the respondent dated 31.12.2018 at Article 32 reads as under:-
Article 32 APPLICABLE LAW AND SETTLEMENT OF DISPUTES
1. This agreement and the rights and obligations of the Parties hereunder shall be construed and interpreted in accordance with Indian substantive and procedural laws, applicable to Agreements -5- CMP No. 163 of 2021 made and to be performed entirely therein. Subject to Article 32(2), the courts at Bengaluru shall have the jurisdiction over disputes and differences arising out of this Agreement.
2. The Parties shall attempt in good faith to resolve any dispute, difference or claim arising out of or in relation to this Agreement through mutual discussion. In case it is not resolved within 30 days from receipt of the written notice (setting out the dispute or claim) by the other part, the complaining party may issue a notice of reference, invoking settlement of such dispute through arbitration.
Arbitration: All disputes and differences arising between the parties hereto as also between the Franchisor and the Franchisee, including any dispute or difference in regard to the existence, validity, interpretation, breach or termination of this Agreement), or in regard to any claim of one party against the other or in regard to the rights and obligations of any party or parties under this contract or otherwise shall be shall be referred to under the provisions of the Arbitration and Conciliation Act 1996 or its modifications thereof absolutely and fully. The parties hereby agree that all disputes shall be referred to the sole arbitrator to be nominated by Franchisor. The sole arbitrator shall have summary powers and shall be bound to give reasons for his holdings. The decision of arbitrator shall be final and binding on both the Parties. The seat and venue of Arbitration shall be Bangalore. English shall be the language of the arbitral proceedings. Nothing in this Article shall be construed as preventing either Party from seeing appropriate interim relief(s) in any competent court in Bangalore. It is made clear that Bangalore courts would have exclusive jurisdiction to entertain all petitions from either Party seeking appropriate interim relief(s) and challenge to the arbitral award.
6. In view of the above, she submits that an arbitrator could be appointed to arbitrate the dispute in terms -6- CMP No. 163 of 2021 of the agreement produced by the respondent leaving all the contentions open. Hence, I pass the following:
ORDER i. The petition is allowed.
ii. Sri.Rama Rao Kulkarni, retired District Judge of the District Judiciary of the State of Karnataka is appointed as a sole arbitrator to arbitrate the dispute between the parties under the aegis of the Arbitration Centre attached to this Court.
iii. Registry is directed to forward a copy of this order to Director, Arbitration Centre for doing the needful.
iv. There being similar other applications which are also filed and which have been allowed today, the said arbitrator to take up all the three matters together.
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JUDGE Prs*