Karnataka High Court
Plivo Communications Private Limited vs Arvind Eshwarlal on 21 July, 2022
Author: S.R.Krishna Kumar
Bench: S.R.Krishna Kumar
1
IN THE HIGH COURT OF KARNATAKA, BENGALURU
DATED THIS THE 21st DAY OF JULY, 2022
BEFORE
THE HON'BLE MR.JUSTICE S.R.KRISHNA KUMAR
CIVIL MISCELLANEOUS PETITION NO.171 OF 2020
BETWEEN:
PLIVO COMMUNICATIONS PRIVATE LIMITED
A PRIVATE COMPANY LIMITED BY SHARES
HAVING ITS REGISTRED OFFICE AT:
2ND FLOOR, BLOCK B, EAST WING
77 TOWN CENTRE, VARTHUR HOBLI
BENGALURU EAST TALUK,
BENGALURU - 560 037
REPRESENTED BY ITS AUTHORIZED REPRESENTATIVE
MR. VENU INDURTHI.
...PETITIONER
(BY SRI. PRADEEP NAYAK, ADVOCATE)
AND:
ARVIND ESHWARLAL
AGED ABOUT 45 YEARS
106, RAHEJA MANSION
13 MILTON STREET, COOKE TOWN
BENGALURU - 560 005.
...RESPONDENT
(BY SRI. A.M.SHODHAN BABU, ADVOCATE)
THIS C.M.P. IS FILED UNDER SECTION 11(5) OF THE
ARBITRATION AND CONCILIATION ACT 1996, PRAYING TO
APPOINT A SOLE ARBITRATOR TO ARBITRATE THE DISPUTES
RAISED BY THE PETITIONER AGAINST THE RESPONDENT IN
RESEPCT OF THE SEVERAL BREACHES OF THE NDA
COMMITTED BY THE RESPONDENT, IN ACCORDINGLY WITH
THE ARBITRATION AGREEMENT CONTAINED AT CLAUSE 12 OF
THE NON DISCLOSURE AND NON COMPETE AGREEMENT
DATED: 27TH NOVEMBER 2017 PRODUCED AS ANNEXURE-A AND
ETC.
2
THIS C.M.P. COMING ON FOR ADMISSION THIS DAY, THE
COURT MADE THE FOLLOWING:-
ORDER
The present petition under Section 11 of the Arbitration and Conciliation Act, 1996, has been filed by the petitioners-company against the respondent seeking appointment of an Arbitrator in pursuance of Arbitration Clause of the Non-Disclosure and Non-Compete Agreement dated 27.11.2017 vide Annexure-A.
2. Clause-12 of the said Agreement, which contains an Arbitration clause, reads as under:-
"12. The Employee and the Company agree to negotiate in good faith to resolve any dispute between them regarding this Agreement. Either of them may invoke arbitration proceedings for the resolution of the disputes and differences which shall be finally settled under the Arbitration and Conciliation Act, 1996. The arbitration panel shall consist of 3 (three) arbitrators, 1(one) to be appointed by the Employee and the other by the Company. The third arbitrator shall be appointed by the 2(two) arbitrators appointed by the parties as stated in the foregoing sentence. The place of arbitration shall be Bangalore, India and the arbitration proceedings shall be conducted in English".3
3. The material on record discloses that since the dispute arose between the parties in relation to the aforesaid Agreement dated 27.11.2017 containing the aforesaid arbitration agreement at Clause No.12, on 27.10.2018 and 31.05.2019, the petitioner invoked the aforesaid arbitration clause and issued notices to the respondent putting forth various claims and contentions and nominating and appointing a sole arbitrator and calling upon the respondent to give his concurrence / consent to refer the dispute to arbitration.
4. The respondent sent a reply dated 08.06.2019, to which the petitioner sent a reply dated 07.08.2019, to which, the respondent sent one more further reply dated 19.09.2019 through their lawyers disputing and denying the claims and contentions of the petitioner and informing him that they do not concur with the nominee-arbitrator appointed by the petitioner and calling upon him to concur and give consent to the arbitrator appointed and nominated by the respondent. The said exchange of notices and replies also indicate that there are allegations and counter 4 allegations made by both parties against each other, which have been disputed and denied by both of them.
5. Subsequently, the parties have not only failed to resolve their disputes but they have also not reached any consensus / agreement for appointment of an arbitrator and as such, the petitioner is before this Court by way of the present petition.
6. In addition to reiterating the various contentions urged in the petition and referring to the documents on record, learned counsel for the petitioner submits that the dispute between the parties deserves to be referred to arbitration.
7. Per contra, in addition to reiterating the various contentions urged in the statement of objections and referring to the material on record, learned counsel for the respondent submits that the dispute is not arbitrable, since the right to reputation of the respondent which is one of the subject matter of dispute is a right in rem, which is not capable of being referred to arbitration. It is also contended 5 that there are criminal proceedings pending between the parties and the dispute is not arbitrable. It is further contended that the correspondence between the parties also indicate that the dispute raised by the petitioner is not arbitrable. It is therefore contended that the present petition is not maintainable and that the same is liable to be dismissed. In support of his contentions, learned counsel relied upon the following decisions:-
(i) Vidya Drolia & Ors. Vs. Durga Trading Corporation - (2021) 2 SCC 1;
(ii) Gartside vs.Outram - 26 L.J. Ch.133; 3 Jur (N.S.) 40;
(iii) Sukanya Holdings Pvt. Ltd., vs. Jayesh H.Pandya & Anr. - (2003) 5 SCC 531;
(iv) India Household and Healthcare Ltd., vs. LG Household and Healthcare Ltd., - (2007) 5 SCC 510.
8. In view of the aforesaid facts and circumstances, though several contentions have been urged by both sides in support of their respective claims, in the light of the judgments of the Apex Court in the case of Vidya Drolia and others Vs. Durga Trading Corporation
- (2021) 2 SCC 1, and in the case of Bharat Sanchar 6 Nigam Limited vs. Nortel Networks India (P) Ltd., - 2021 (5) SCC 738, since there are various contentious issues and disputed questions that arise for consideration between the parties, I am of the considered opinion that the matter deserves to be referred to arbitration by leaving open all contentions and by issuing necessary directions to the arbitral tribunal.
9. Under these circumstances, without expressing any opinion on the merits / demerits of the rival contentions, I deem it just and appropriate to allow this petition by referring the dispute between the parties to arbitration by appointing Hon'ble Shri.Justice V. Jagannathan, Former Judge of this Court, to act as the sole Arbitrator to resolve the dispute between the parties under the provisions of the Arbitration and Conciliation Act, 1996, as per the Rules governing the Arbitration and Conciliation Centre (Domestic & International) at Bengaluru.
10. In the result, I pass the following:-
ORDER
(i) Petition is hereby allowed.7
(ii) Hon'ble Shri.Justice V. Jagannathan, Former Judge of this Court, is hereby appointed as the sole Arbitrator to resolve the dispute between the parties as per the Rules governing the Arbitration and Conciliation Centre (Domestic & International) at Bengaluru.
(iii) All rival claims, contentions, etc., of both parties including contentions relating to maintainability, arbitrability, jurisdiction, limitation, stamp duty, etc., are left/kept open to be decided by the Arbitral Tribunal and no opinion is expressed on the same.
(iv) Since the issues / questions regarding arbitrability, maintainability and jurisdiction has been seriously urged by the respondent, Arbitral Tribunal is hereby directed to decide the said issues / questions as preliminary issues and pass appropriate orders on the same before proceeding further in the matter.
(v) A copy of this order be sent forthwith to the Arbitration and Conciliation Centre (Domestic & International), Khanija Bhavan, Bengaluru, for proceeding further and also to Hon'ble Shri. Justice V. Jagannathan, 8 Former Judge of this Court to the address available with the said Centre.
(vi) Registry is directed to return all original documents produced by any of the parties after obtaining photostat copies of the same.
Sd/-
JUDGE SV/SRL