Karnataka High Court
M/S A O Smith India Water Products ... vs Guargaon Water Solutions on 6 October, 2023
Author: B M Shyam Prasad
Bench: B M Shyam Prasad
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NC: 2023:KHC:36209
CMP No. 755 of 2022
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 6TH DAY OF OCTOBER, 2023
BEFORE
THE HON'BLE MR JUSTICE B M SHYAM PRASAD
CIVIL MISC. PETITION NO. 755 OF 2022
BETWEEN:
M/S A O SMITH INDIA WATER
PRODUCTS PRIVATE LIMITED
A COMPANY REGISTERED UNDER
THE COMPANIES ACT 1956,
HAVING ITS REGISTERED OFFICE
AT PLOT NO.300,
KIADB INDUSTRIAL AREA PHASE-II,
HAROHALLI, KANAKAPURA TALUK,
RAMANAGARA DISTRICT-562112
KARNATAKA
REP BY ITS AUTHORIZED SIGNATORY
BRINDA T.B.
...PETITIONER
(BY SRI. AJAY J NANDALIKE.,ADVOCATE)
Digitally
signed by AND:
NARASIMHA
MURTHY
VANAMALA GUARGAON WATER SOLUTIONS
Location:
HIGH G 42, PALAM VIHAR EXTENSION,
COURT OF
KARNATAKA OM VIHAR ROAD,
DHARAM COLONY, NEAR R K TOWER,
GURGAON, HARYANA-122017
REPRESENTED BY
MR SACHIN KUMAR SINGH.
...RESPONDENT
(VIDE ORDER DATED 05.09.2023 SERVICE OF NOTICE
TO THE RESPONDENT IS HELD SUFFICIENT)
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NC: 2023:KHC:36209
CMP No. 755 of 2022
THIS CIVIL MISC. PETITION IS FILED UNDER
SEC.11(6) OF THE ARBITRATION AND CONCILIATION
ACT 1996, PRAYING TO APPOINT THE SOLE
ARBITRATOR IN TERMS OF CLAUSE 21.2 OF THE
SERVICE AGREEMENT DATED 20/08/2018
(ANNEXURE-C) TO ADJUDICATE UPON THE DISPUTES
WHICH HAVE ARISEN BETWEEN THE PETITIONER AND
THE RESPONDENT.
THIS PETITION, COMING ON FOR ADMISSION,
THIS DAY, THE COURT MADE THE FOLLOWING:
ORDER
This petition is filed for the appointment of a sole arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996 [for short, 'the Arbitration Act'] relying upon the Services Agreement dated 20.08.2018 which contains the following agreement for arbitration:
"21.2. In case of any dispute or differences between AOS and the Service Provider relating to this Agreement, such dispute or differences shall be settled by arbitration under the Arbitration and Conciliation Act, 1996. The arbitration shall be referred to a single arbitrator appointed by the Service Provider from a list of 3 (three) individuals identified by AOS within a period of 30 (thirty) days from -3- NC: 2023:KHC:36209 CMP No. 755 of 2022 the date on which AOS notifies the Service Provider of such list of persons, failing which arbitrator shall be appointed by AOS ("Arbitrator"). The decision of the Arbitrator in this regard shall be final and binding on both parties."
2. The petitioner's case is that the initial contractual period of two years with the respondent is extended by another three years, and because of several complaints from the respondent's customers an audit was conducted which established certain deficiencies. Thereafter, the respondent has terminated the contract by E-mail on 04.06.2021, and the petitioner is entitled to recover a sum of Rs.33,00,000/- [excluding tax] towards the costs of spare parts and a sum of Rs.15,70,250/- as penalty for breach of contractual terms. The petitioner also contends that the legal notice dated 07.06.2022 is issued invoking the agreement for arbitration, and the respondent has caused reply as per Annexure-N [a translation of this reply is produced separately by -4- NC: 2023:KHC:36209 CMP No. 755 of 2022 the petitioner] without disputing the agreement for arbitration but justifying termination and denying the liability.
3. The learned counsel for the petitioner, relying upon these circumstances, argues that the petitioner has established the existence of the agreement, arbitrability of dispute and the failure of consensus as regards the appointment of a sole arbitrator. In fact, the learned counsel, relying upon the translation of reply canvassed by the respondent, submits that the respondent has not even referred to the petitioner's request for constitution of the arbitral tribunal.
4. The respondent, though served, remains absent. This Court must record that the notices sent in the regular course are returned either for insufficiency of address or that the addressee is not located. The notices sent by the petitioner's E-mail -5- NC: 2023:KHC:36209 CMP No. 755 of 2022 are deemed to be received by the respondent, and the petitioner, with the leave of this Court, has also served notice of the petition to the respondent by hand with the assistant of a learned member of the Bar at Gurugram and bailiff of the jurisdictional Court. It is obvious that the respondent does not propose to oppose the application. Hence, the following :
ORDER [a] The petition is allowed, and Sri.V.N.Ravindra, a retired District Judge, is appointed as the sole Arbitrator to enter reference of the dispute between the petitioner and respondents and conduct the proceeding at the Arbitration and Conciliation Centre (Domestic and International), Bengaluru according to the Rules governing the Arbitration and Conciliation Centre (Domestic and International), Bengaluru.-6-
NC: 2023:KHC:36209 CMP No. 755 of 2022 [b] The Registry is directed to communicate this order [through email] to the Arbitration and Conciliation Centre and Sri.V.N.Ravindra, a retired District Judge, Address: No.229, Balaji Layout, Vajarahalli, Bynapalya, Kanakapura Road, Bengaluru - 560 062 [ email: e-mail:
[email protected]], as required under the Appointment of Arbitrators by the Chief Justice of Karnataka High Court Scheme, 1996.
SD/-
JUDGE SA ct:sr