IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 1ST DAY OF AUGUST, 2019 BEFORE THE HON’BLE MR.JUSTICE B.VEERAPPA CIVIL MISCELLANEOUS PETITION No.126/2019 BETWEEN:
MOBME WIRELESS SOLUTIONS LIMITED HAVING ITS REGISTERED OFFICE AT 67/2355, V-ONE PLAZA OLD RAILWAY STATION NEAR INCOME TAX OFFICE, COCHIN ERNAKULAM, KERALA-682018 REP. BY ITS CHIEF EXECUTIVE OFFICER Mr. MANU JOSEPH SCARIA [PRESENT ADDRESS]. ...PETITIONER (BY SRI THOMAS VELLAPALLY, ADV.) AND:
BHASH SOFTWARE LABS PRIVATE LIMITED HAVING ITS REGISTERED OFFICE AT DOOR No.267-A, KILPAUK GARDEN ROAD KILPAUK, CHENNAI-600010 [PRESENT ADDRESS] ALSO AT:
#99, 4TH CROSS ROAD 5TH BLOCK, KORAMANGALA BENGALURU-560095. …RESPONDENT (RESPONDENT IS SERVED BUT UNREPRESENTED) THIS C.M.P. IS FILED UNDER SECTION 11[5] AND [6] OF THE ARBITRATION AND CONCILIATION ACT, 1996, PRAYING TO CONSTITUTE AN ABRITRAL TRIBUNAL BY APPOINTMENT OF A SOLE ARBITRATOR FOR THE ADJUDICATION OF THE DISPUTE BETWEEN THE PARTIES IN ACCORDANCE WITH CLAUSE-15 OF THE SERVICE LEVEL AGREEMENT DATED JANUARY 3, 2015 [ANNEXURE-A]; AND ETC., THIS C.M.P. COMING ON FOR ADMISSION THIS DAY, THE COURT MADE THE FOLLOWING:
O R D E R When the matter came up before this Court on 25.07.2019, none appeared for the respondent, who is served and unrepresented. In order to give one more opportunity, the matter was posted to next week. Today also, respondent is served but unrepresented.
2. The petitioner has filed the present Civil Miscellaneous Petition under the provisions of Sections 11(5) and (6) of the Arbitration and Conciliation Act, 1996 to appoint a sole arbitrator to adjudicate the dispute in terms of Clause 15 of Service Level Agreement dated 03.01.2015 entered into between the parties.
3. It is the case of the petitioner that the petitioner is a registered telemarketer engaged in the business of providing various customized products and services, using mobile communications technology which includes providing bulk SMS delivery solutions through SMS push services. The respondent had approached the petitioner to provide bulk SMS delivery solution services through SMS push services and the petitioner agreed to provide the services to the respondent. Accordingly, the Service Level Agreement dated 03.01.2015 came to be executed between the petitioner and the respondent containing the arbitration clause also.
4. It is further contended that the petitioner in order to provide services in terms of the agreement, raised various invoices on the respondent for its services at the rates fixed in terms of the agreement. However, the respondent failed to settle the invoices as per Annexure – B rendered by the petitioner for the period from 01.01.2015 to 29.02.2016 and as on 01.03.2016, there was an outstanding amount of Rs.75,76,380/- due to the petitioner. It is further case of the petitioner that the respondent vide Annexure – C/ledger statement from 01.04.2015 to 30.06.2016 acknowledged its liability of Rs.75,76,380/- to the petitioner and agreed to clear the full outstanding amount by paying Rs.12,00,000/- every month commencing from March, 2016 till the entire outstanding amounts were cleared. It is further case of the petitioner that the respondent has paid a sum of Rs.29,00,000/- on 14.03.2016 but failed in its commitment to clear the entire outstanding and therefore the petitioner issued legal notice on 25.08.2016 calling upon the respondent to pay entire outstanding due of Rs.49,54,156/-. The respondent raised false and frivolous contentions and raised a dispute regarding deficiency of service for the first time. Thereafter, the petitioner filed rejoinder refuting the claim of the respondent.
5. It is further case of the petitioner that as per Annexure – G dated 27.02.2017, demand notice under the relevant provisions of the Insolvency and Bankruptcy Code, 2016 came to be issued and on failure of the respondent in making payment of the amount demanded, the petitioner filed a petition under the IBC before the National Company Law Tribunal. The matter came to be admitted, against which the respondent preferred an appeal before the National Company Law Appellate Tribunal which was allowed by Annexure – J. Aggrieved by the same, the petitioner approached the Hon’ble Supreme Court and the Supreme Court dismissed the Civil Appeal No.17300/2017 on 10.11.2017. Therefore, the petitioner was forced to issue notice to respondent in terms of Clause 15 of the Service Level Agreement entered into between the parties invoking the dispute resolution and nominated the former Judge of this Court as arbitrator. The respondent issued reply notice as per Annexure – N notifying its disagreement to the arbitrator nominated by the petitioner and suggested the name of former District Judge as sole arbitrator to adjudicate the dispute. Therefore, the petitioner is before this Court for the relief sought for.
6. I have heard the learned counsel appearing for the petitioner.
7. Sri. Thomas Vellapally, learned counsel for the petitioner reiterating the averments made in the Civil Miscellaneous Petition contended that there is no dispute with regard to the Service Level Agreement dated 03.01.2015 entered into between the parties and the existence of arbitration clause. He would further contend that as per Annexure – M while issuing legal notice as contemplated under Section 7(5) of the Arbitration and Conciliation Act, 1996, the petitioner has nominated former Judge of this Court as Arbitrator. The same is disputed by the respondent vide Annexure – N dated 25.03.2019 and suggested the name of the former District Judge to be a sole arbitrator to resolve the dispute between the parties. Therefore, he would submit that in view of the admitted fact, there is no impediment for this Court to appoint an independent arbitrator. Accordingly, sought to allow the petition.
8. The respondent is served and unrepresented.
9. Having heard the learned counsel for the petitioner, a careful perusal of the Annexure – A /Service Level Agreement dated 03.01.2015 clearly indicates that the petitioner and respondent entered into the Service Level Agreement to provide service to the respondent. Accordingly, the petitioner raised various invoices as per Annexure – B from 01.01.2015 to 29.02.2016. According to the petitioner, the respondent has paid Rs.29,00,000/- on 14.03.2016. Still the respondent is due to a sum of Rs.49,54,156. It is also not in dispute that Clause 15 of the Service Level Agreement stipulates the dispute resolution between the parties, which reads as under:
“15. DISPUTE RESOLUTION:
In the event of any dispute or difference arising at any time between the Parties hereto as to the construction, meaning or effect of this Agreement or any clause or thing contained herein or the rights, duties, liabilities and obligations of the Parties hereto in relation to the Agreement or otherwise arising out of or in connection with this Agreement, the Parties shall first make full effort to settle the same amicably. In the event of a failure to settle the dispute amicably within 30 (thirty) days from the origin of the dispute (being counted from the date on which a notice of dispute containing the substance of the dispute is issued by one Party to the other), the same shall be referred to a single arbitrator to be appointed by the mutual consent of the Parties. All such Arbitration proceedings shall be held in Bangalore as per the Arbitration and Conciliation Act 1996 as amended from time to time.
However, this shall not apply to any interim/injunctive relief sought under this Agreement.”
10. It is also not in dispute that inspite of repeated requests, the respondent has not discharged its obligation as agreed. In terms of the Service Level Agreement, the petitioner issued legal notice of arbitration dated 22.02.2018, wherein he suggested name of former Judge of this court as his nominee to appoint as sole arbitrator. In response to the said notice, the respondent vide Annexure – N dated 25.03.2019 in categorical terms stated as under:-
“3. That due to unforeseen personal circumstances, Our Client was unable to continue the settlement discussions and wishes to inform You that they are still ready and willing to come forward to engage in mutually beneficial talk in order to bring closure to the present dispute.
4. That we are still willing to mediate and settle all dispute subject to You rescinding the impugned Notice. However, in the event You still wish to pursue and trigger Clause 15 of the Agreement, we dispute the appointment of Retd. Justice P. Chinnappa, retired judge of the Karnataka High Court and nominate Retd. Justice C.R. Benakanalli, retired District and Sessions Judge and former Presiding Officer of Debt Recovery Tribunal, Bangalore, having office at No.1319, 11th Main Road, Judicial Layout, G.K.V.K. Post, Bangalore-560 065 to act as Sole Arbitrator.”
11. It clearly indicates that there is no dispute with regard to existence of Service Level Agreement and existence of arbitration clause. Therefore, there is no impediment for this Court to appoint sole independent arbitrator to resolve the dispute between the parties.
12. In view of the above, the Civil Miscellaneous Petition is allowed. Sri. Ashok B. Hinchigeri, former Judge, High Court of Karnataka is appointed as sole independent arbitrator to resolve the dispute in terms of the clause 15 of the Service Level Agreement dated 03.01.2015 entered into between the parties.
13. The Registry is directed to send the copy of this order to Sri. Ashok B. Hinchigeri, former Judge, High Court of Karnataka, Arbitration Centre and the respondent for reference forthwith.
Sd/- JUDGE PMR