Karnataka High Court
M/S Gdbh And R Pvt Ltd vs M/S Air Avenue Suites on 23 September, 2022
Author: Suraj Govindaraj
Bench: Suraj Govindaraj
-1-
CMP No. 512 of 2022
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 23RD DAY OF SEPTEMBER, 2022
BEFORE
THE HON'BLE MR JUSTICE SURAJ GOVINDARAJ
CMP NO. 512 OF 2022
BETWEEN:
M/S GDBH & R PVT LTD
A COMPANY INCORPORATED UNDER THE
COMPANIES ACT 1956,
REPRESENTED BY ITS MANAGING DIRECTOR
MR GIRIYAPPA DAYANAND
HAVING ITS CORPORATE OFFICE AT NO 3,
KUMARA KRUPA ROAD, MADHAVANAGAR
BANGALORE 560001
...PETITIONER
(BY SRI. NISCHAL DEV B R.,ADVOCATE)
AND:
1. M/S AIR AVENUE SUITES
PARTNERSHIP FIRM,
NATAKKAL HOUSE, MAJBAL KASARGOD,
KERALA 671323,
REP. BY ITS MANAGING PARATNERS
PLACE OF BUSINESS AT
Digitally signed by
POORNIMA AIR AVENUE HOTEL
SHIVANNA A-17, A 18, 6TH MAIN ROAD,
Location: HIGH KEMPEGOWDA INTERNATIONAL AIRPORT ROAD,
COURT OF
KARNATAKA NEAR VIVA TOYATA SHOWROOM
CHANDRAMOULESHWARA NAGAR
HUNSAMARANAHALLI,
BENGALURU KARNATAKA 562157
2. MR MOHAMMED HANIFIDDIN KUNHI
AGED MAJOR,
PROPRIETOR OF M/S AIR AVENUE SUITES
HAVING OFFICE AT NATAKKAL HOUSE
MAJBAL KASARGOD
KERALA 671323,
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CMP No. 512 of 2022
PLACE OF BUSINESS AT
AIR AVENUE HOTEL
A-17, A 18, 6TH MAIN ROAD,
KEMPEGOWDA INTERNATIONAL AIRPORT ROAD,
NEAR VIVA TOYATA SHOWROOM
CHANDRAMOULESHWARA NAGAR
HUNSAMARANAHALLI,
BENGALURU KARNATAKA 562157
3. MR UDYAWAR KHADAR AZEEZ
AGED MAJOR
M/S AIR AVENUE SUITES
NATAKKAL HOUSE, MAJBAL KASARGOD
KERALA 671323,
...RESPONDENTS
(VIDE ORDER DATED 2.9.22 R1 & R3 H/S;
BY SRI. NARAJJI DEEPAK. ADVOCATE FOR R2)
THIS CMP IS FILED UNDER SEC.11(6) OF THE ARBITRATION
AND CONCILIATION ACT 1996, PRAYING TO APPOINT A SOLE
ARBITRATOR FOR REFERENCE OF THE DISPUTES ARISING OUT OF
OR RELATING TO THE HOTEL OPERATING AGREEMENT 18/05/2020
ENTERED BETWEEN THE RESPONDENT IN FAVOUR OF THE
PETITIONER PURSUANT TO ARTICLE XXVII OF THE AGREEMENT.
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:
a. Appoint a Sole Arbitrator for reference of the disputes arising out of or relating to the Hotel Operating Agreement 18.05.2020 entered between the Respondent in favour of the Petitioner pursuant to Article XXVII of the Agreement.-3- CMP No. 512 of 2022
b. Pass such other order or orders as this Hon'ble Court deems fit in the facts and circumstances of the case in the interest of justice and equity.
2. The petitioner and respondents have entered into a Hotel Operating Agreement dated 18.05.2020 which is governed by an arbitration clause in terms of Article XXVII which is reproduced hereunder for easy reference:
ARTICLE XXVII Settlement of Disputes
1. If any controversy or dispute should arise between the parties in the performance interpretation, implementation and application of the Agreement, which involves accounting matters either party, may serve upon the other a written notice stating that such party desires to have controversy or dispute resolved by any arbitrator, who shall be a person qualified to act as auditor, under the provisions of the Companies Act 1956. If the parties cannot agree, within 15 days from the serving of such notice to the other party, upon the selection of such arbitrator, he shall be designated by the President of the of the Institute of Chartered Accountants of India, upon the request of either party. The decision and award of arbitrator, shall be final and binding upon both Owner and Operator, and shall not be subject to any appeal.
2. If any controversy or dispute should arise between the parties in the performance interpretation, implementation or application of this agreement, involving any matter, other than an accounting matter, the same shall be referred to a sole arbitrator in accordance with -4- CMP No. 512 of 2022 the provisions of the Indian Arbitration Act. The venue of the arbitration shall be at Bangalore.
3. Except any controversy of dispute arising under Article XIII of this agreement shall remain in full force and effect, pending, the Award in the arbitration proceedings, which award shall also determine whether and when termination is to become effective.
4. All disputes are subject to jurisdiction of Bangalore Courts. The parties hereby agree that any dispute or difference arising between them in relation to this agreement during its subsistence the Civil Courts situated in Bangalore to the complete exclusion of the Courts situated in any other place.
3. There being certain disputes between the parties, various correspondences were exchanged. Finally, the petitioner had invoked arbitration clause vide its notice dated 27.12.2021 and nominated its arbitrator. Despite the receipt of the same, respondents have not replied to the said notice. As such, the petitioner is before this Court seeking for the aforesaid reliefs.
4. Sri.Nischal Dev, learned counsel for the petitioner submits that the arbitration clause provides for an arbitrator to be appointed. Settlement dispute -5- CMP No. 512 of 2022 clause provides for an arbitrator to be appointed to resolve the dispute between the parties, as such, this Court could appoint an arbitrator.
5. Respondent No.2 having been served, has entered appearance through an advocate. However, the said advocate has not been appearing and this Court vide order dated 16.09.2022 had observed that if none were to appear today, the matter would be taken up for consideration in their absence. As such, the matter is taken up for consideration. Respondents No.1 and 3 having been served, service is held sufficient and they have not entered appearance.
6. Heard Sri.Nischal Dev, learned counsel for the petitioner. Perused papers.
7. The Arbitration clause which has been reproduced hereinabove provides for two different set of remedies. One where the accounting matters are in question, the concerned party has to approach the Institute of Chartered Accountants of India for appointment of an Arbitrator and the other where -6- CMP No. 512 of 2022 there are other disputes in the performance interpretation, implementation or application of the agreement, involving any matter, other than an accounting matter, the same shall be referred to a sole arbitrator in accordance with the provisions of the Indian Arbitration Act accounting matters are not involved, the arbitrator to be appointed in accordance with the Arbitration and Conciliation Act, 1996 ( for short 'A&C Act').
8. In the present case, the disputes are as regards recovery of money, as also the termination of the Hotel Operation Agreement. Therefore, it is not just an accounting matter but other matters are also involved. As such, this Court would have jurisdiction to appoint an Arbitrator in terms of Subclause (2) of Article 27 of the Hotel Operation Agreement.
9. In view thereof, I pass the following:
ORDER i. The petition is allowed. Sri.M.K.Shripathi, retired District Judge is appointed as a sole -7- CMP No. 512 of 2022 arbitrator to arbitrate the dispute between the parties.
ii. The arbitration to be carried out under the aegis of the Arbitration and Conciliation Centre, Bengaluru.
iii. Registry is directed to forward a copy of this order to the Director, Arbitration and Conciliation Centre.
iv. All contentions are left open.
Sd/-
JUDGE
LN
List No.: 2 Sl No.: 33