IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 10TH DAY OF OCTOBER, 2019 BEFORE THE HON’BLE MR. JUSTICE B. VEERAPPA CIVIL MISCELLANEOUS PETITION NO.110/2017 BETWEEN:
M/s. ABB India Ltd., A Company under the Companies Act 1956, 2nd Floor, East Wing, Khanija Bhavan, Race Course Road, Bangalore – 560 001.
Now having its Regd. Office at 21st Floor, World Trade Center, Brigade Gateway, No.26/1, Dr.Rajakumar Road, Malleshwaram West, Bengaluru – 560 555.
Represented by Mr.Rejoy Raj, Asst. Vice President – Legal.
…Petitioner (By Sri Keerti Kumar D Naik, Adv.) AND:
M/s. R.N.Gupta Engineering Company Pvt. Ltd., 45, Bhangwadi Shopping Arcade, Kalbadevi Road, Mumbai – 400 002.
Now having its Registered Office At:
Orchid Road Mall, Unit No.223, 1st Floor, Royal Palm Estate, Aarey Road, Goregaon East, Mumbai – 400 065.
Represented by its Managing Director.
... Respondent (M/s. R.N.Gupta Engineering Company Pvt. Ltd., (Respondent) is served through paper publication vide order dated 26.09.2019) ***** This Civil Miscellaneous Petition is filed under Section 11(6)(a) of the Arbitration and Conciliation Act, 1996, praying to (a) appoint an arbitrator being nominee of the respondent (second arbitrator) to enter into reference of the disputes between the petitioner and the respondents arising out of agreement dated 22.03.2012 titled the ‘Third Party Channel Agreement’ at Annexure A and etc., This Civil Miscellaneous Petition coming on for Admission, this day, the Court made the following:
O R D E R The petitioner filed the present Civil Miscellaneous Petition under the provisions of Section 11(6)(a) of the Arbitration and Conciliation Act, 1996, for appointment of an arbitrator in terms of clause 14 of the agreement dated 22.03.2012 entered into between the parties.
2. The petitioner is a company having its registered Office at Bengaluru, engaged in the business of power and automation technologies and supply of various electrical products to various customers. On 22.03.2012, the respondent entered into a ‘Third Party Channel Agreement’ for the purpose of sales, support, service and engineering network of Third Party Channel Companies for the petitioner’s range of standard and engineered products. In terms of the said agreement, the respondent issued various purchase orders to the petitioner for supply of electrical equipments including the electrical induction motors of various capacities. The petitioner duly supplied the said goods as ordered by the respondent and issued its invoices for a total value of Rs.78,17,054.70 paise. As per the agreed terms of the third party channel agreement, the respondent was required to pay to the petitioner each of the invoice values within 45 days of such invoices and not later than 90 days from the date of each invoice. The agreement provided that, upon failure to make such payment within the agreed period of 90 days, would render the respondent liable for termination of the agreement at the option of the petitioner. Despite this fact, the respondent failed and neglected to make payment and after continuous follow up by the petitioner, the respondent vide its letter dated 22nd July, 2014, assured the petitioner that it would make payment of an amount of approximately Rs.8,00,000/- to Rs.10,00,000/- by the end of August, 2014 and would make payment of 50% of the balance outstanding amount by the end of October, 2014 and clear the total outstanding amount within December, 2014. The outstanding amount remained unpaid and the petitioner issued a demand notice dated 10.09.2015 demanding payment of the outstanding amount. The same was duly served on the respondent.
3. It is further contended, as per clause 14 read with para 2 on page 8 of Annexure-II (General Terms and Conditions for Sale), the parties have agreed to refer any disputes concerning the agreement to be settled by arbitration at Bangalore. In spite of repeated demand made by the petitioner, respondent has not complied. Therefore, the petitioner issued arbitral notice dated 13.07.2016. The respondent refused to receive the legal notice. Hence, the petitioner is before this Court for the relief sought for.
4. The respondent is served and unrepresented.
5. I have heard the learned counsel for the petitioner.
6. Sri. Keerti Kumar D.Naik, learned counsel for the petitioner, reiterating the averments made in the civil miscellaneous petition, contended that there is no dispute with regard to Third Party Channel Agreement dated 22.03.2012 entered into between the parties and there exists Arbitral Clause 14 as per the said agreement. The petitioner issued arbitral notice dated 13.07.2016. The respondent refused to receive the same. Therefore, he sought to allow the civil miscellaneous petition.
7. Having heard the learned counsel for the petitioner, it is undisputed fact that the petitioner and the respondent entered into Third Party Channel Agreement dated 22.03.2012 for the purpose of sales, support, service and engineering network of Third Party Channel Companies for the petitioner’s range of standard and engineered products. According to the petitioner, the petitioner has duly supplied the electrical equipments including the electrical induction motors of various capacities to the respondent and issued invoices for a total value of Rs.78,17,054.70 paise. In spite of repeated demands, the respondent failed to make payments. Even the last arbitral notice dated 13.07.2016 issued to him was returned unserved with a postal shara ‘not known’.
8. In view of the above, the Civil Miscellaneous Petition is allowed. Hon’ble Justice Sri. A.J.Sadashiva, former Judge of this Court is appointed as sole arbitrator to adjudicate the dispute between the parties, in terms of Clause 14 of the Third Party Channel Agreement dated 22.03.2012, entered into between the parties.
The Registry is hereby directed to send a copy of this order to the Hon’ble Justice Sri A.J.Sadashiva, former Judge of this Court as well as to the respondent and the Arbitration Centre for reference forthwith.
Sd/- JUDGE Mgn/-