IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 31ST DAY OF OCTOBER 2019 BEFORE THE HON'BLE Mr. JUSTICE B.VEERAPPA CIVIL MISCELLANEOUS PETITION No.242/2018 BETWEEN:
JUSTBOOKS SOLUTIONS PRIVATE LIMITED #972/1, 13TH CROSS, 16TH MAIN, BANASHANKARI 2ND STAGE, BENGALURU-560 070 REP. BY AUTHORISED SIGNATORY Mr. SRIDHAR RAJARAM. PETITIONER (BY Ms. ABMITA A. DESHPANDE, ADVOCATE FOR SRI UDAY SHANKAR R.M., ADVOCATE) AND RAGARIHA VENTURES, ‘JUSTBOOKS’, 2628, 1ST FLOOR, 27TH MAIN ROAD, SECTOR 1 HSR LAYOUT, BENGALURU – 560 102 REP. BY PROPRIETOR, MS. G. RAMYA. RESPONDENT ( BY SRI S. VIVEKANANDA, ADVOCATE) THIS CIVIL MISCELLANEOUS PETITION IS FILED UNDER SECTION 11(5) AND 11(6) OF THE ARBITRATION AND CONCILIATION ACT, 1996 PRAYING TO APPOINT A COMPETENT PERSON AT KARNATAKA ARBITRATION CENTRE AS AN ARBITRATOR TO ARBITRATE THE DISPUTE BETWEEN THE PARTIES AT THE KARNATAKA ARBITRATION CENTRE, AS PER CLAUSE 14.9 OF 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(5) of the Arbitration and Conciliation Act, 1996, (hereinafter referred to as ‘the Act’, for brevity) for appointment of sole Arbitrator to adjudicate the dispute between the parties in terms of Clause No. 14.9 of the Franchise Agreement dated 01.09.2015 entered into between the parties.
2. It is the case of the petitioner that the respondent entered into Franchise Agreement with M/s. Strata Retail and Technology Services Pvt. Ltd. on 01.09.2015. The business of M/s. Strata Retail and Technology Services Private Limited under the brand name ‘JustBooks’ was transferred to the petitioner by virtue of Business Transfer Agreement dated 21.11.2016. The petitioner intimated the respondent with regard to acquisition of the said business vide letter dated 01.12.2016. On 14.05.2018, the petitioner terminated the Franchise Agreement with the respondent. The petitioner issued legal notice to the respondent on 23.06.2018 invoking the provisions of the arbitration clause in the Franchise Agreement. The respondent has not replied to the said notice. Therefore, the petitioner is before this Court for the relief sought for.
3. The respondent has not filed objections.
4. I have heard the learned counsel for the parties to the lis.
5. Ms. Abmita A. Deshpande, learned counsel for the petitioner, reiterating the averments made in the Civil Miscellaneous Petition contended that there is no dispute with regard to the existence of the Franchise Agreement dated 01.09.2015 between the parties. The respondent has duly signed the said agreement. Clause No.14.9 of the Franchise Agreement stipulates that the dispute between the parties has to be referred to Arbitrator. The petitioner has issued legal notice as contemplated under the provisions of Section 11(5) of the Act. Therefore, she sought to allow the Civil Miscellaneous Petition.
6. Per contra, Sri Vivekananda, learned counsel for the respondent, strongly opposed the contentions raised by the learned counsel for the petitioner. It is contended that it is the petitioner, who violated the terms and conditions of the Franchise Agreement dated 01.09.2015 and not the respondent. Therefore, he sought to dismiss the Civil Miscellaneous Petition.
7. Having heard the learned counsel for the parties, it is an undisputed fact that the petitioner entered into Franchise Agreement dated 01.09.2015 with the respondent and both the parties have duly signed the document as contemplated under Section 7 of the Act. It is also not in dispute that there exists arbitration clause No.14.9 in the Franchise Agreement dated 01.09.2015, which reads as under:
“Governing Law and Dispute Resolution. This Agreement shall be governed by and construed in accordance with the laws of India. All disputes and differences arising between the Franchisor and the Franchisee including any dispute or differences in regard to the interpretation of any provision or term or the meaning thereof shall be referred to and resolved by arbitration under the Arbitration and Conciliation Act, 1996, as amended from time to time. Only a sole arbitrator will be appointed with the consultation of both the Parties and the arbitrator appointed shall pass a reasoned award which shall be binding upon the Parties. All such arbitration proceedings shall be conducted in English language and conducted at Bangalore. Notwithstanding the provisions of this Article, the Parties hereby submit to the exclusive jurisdiction of the Bangalore courts of competent jurisdiction insofar as it relates to obtaining any injunctive or equitable relief from such Bangalore court of competent jurisdiction.”
8. It is also not in dispute that the petitioner has complied with the provisions of Section 11(5) of the Act by issuing legal notice dated 23.06.2018 to the respondent. The same was not replied by the respondent. In view of the above, there is no impediment for this Court to appoint sole Arbitrator to adjudicate the dispute between the parties.
9. For the reasons stated above, the Civil Miscellaneous Petition is allowed. Sri B.S. Sappannavar, former District Judge, is appointed as sole Arbitrator to adjudicate the dispute in terms of clause No.14.9 of the Franchise Agreement dated 01.09.2015 entered into between the parties.
10. Registry is directed to send a copy of this order to Sri B.S. Sappannavar, former District Judge and Arbitration Centre, Bengaluru, for reference forthwith.
Sd/- JUDGE sma