IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 8th DAY OF AUGUST 2019 BEFORE THE HON'BLE Mr. JUSTICE B.VEERAPPA CIVIL MISCELLANEOUS PETITION NO.236/2019 BETWEEN:
PEARSON INDIA EDUCATION SERVICES PVT. LTD. (EARLIER KNOWN AS MANIPAL SCHOOL SERVICES PRIVATE LIMITED) A COMPANY INCORPORATED UNDER THE COMPANIES ACT 1956 AND HAVING ITS REGISTERED OFFICE AT 4TH FLOOR, SOFTWARE BLOCK, ELNET SOFTWARE CITY TS 140, BLOCK 2 AND 9 RAJIV GANDHI SALAI TARAMANI, CHENNAI - 600 113 HAVING ONE OF OFFICES AT GROUND FLOOR, “DIVYASHREE CHAMBERS”
A WING O SHAUGHNESSY ROAD LANGFORD TOWN BENGALURU - 560 025 REPRESENTED BY ITS SENIOR MANAGER-SCHOOL MANAGEMENT MR. ANUPAM ANURAG KERKETTA PETITIONER ( BY SRI. SHRIKARA P.K. FOR SRI. GANAPATHI HEGDE ADVOCATE FOR PETITIONER) AND:
SRI KRISHNA EDUCATION TRUST SHISHYA BEML PUBLIC SCHOOL DR.AMBEDKAR ROAD BEML TOWNSHIP NEW THIPPASANDRA BANGALORE - 560 075 REPRESENTED BY ITS MANAGING TRUSTEE RESPONDENT (BY SRI.BALA NIKIT FOR SRI. PRASHANTH POPAT, ADVOCATE FOR C/RESPONDENT) THIS CIVIL MISCELLANEOUS PETITION IS FILED UNDER SECTION 11(5) OF THE ARBITRATION AND CONCILIATION ACT, 1996 PRAYING TO APPOINT MR. S.SIDDALINGESH, RETIRED DISTRICT JUDGE, UNDER THE AEGIS OF THE ARBITRATION CENTRE - KARNATAKA (DOMESTIC AND INTERNATIONAL) BENGALURU, AS THE SOLE ARBITRATOR OR ANY OTHER SUITABLE PERSON FOR ADJUDICATION OF THE DISPUTES BETWEEN THE PARTIES, ARISING OUT OF THE MANAGEMENT AND NON- ACADEMIC SERVICES AGREEMENT DATED:31/08/2010 (ANNEXURE-A) AND ETC.
THIS PETITION COMING ON FOR ADMISSION, THIS DAY, THE COURT MADE THE FOLLOWING:-
O R D E R The present Civil Miscellaneous Petition is filed by the petitioner under the provisions of Section 11(5) of the Arbitration and Conciliation Act, 1996 for appointment of sole Arbitrator to adjudicate the dispute between the parties in terms of Clause-17 of the ‘Management and Non-Academic Services Agreement’ (‘MANAS’, for short) dated 31.08.2010 entered into between the parties.
2. It is the case of the petitioner that the petitioner is a Company specializing inter-alia in education support services. It is renowned for its services in the education industry across the world. In the year 2010, the respondent approached M/s. Manipal School Services Pvt. Ltd.,(‘MSSPL’, for short) and requested it to provide its expertise in management of the school with the best practices and the non- academic related services and facilities with a view to expand and enhance the value of the school run by the respondent. Pursuant to the request, the respondent entered into a MANAS dated 31.08.2010 under which MSSPL agreed to provide the requisite services of management expertise and non-academic related services and facilities on the terms and conditions set forth in the MANAS agreement.
3. Subsequently, vide ‘Addendum to the Service Agreement dated 31.08.2010’ dated 14.08.2014 the parties have amended certain provisions of the MANAS agreement in terms of Clause-3.3 to 3.9, the petitioner was to take necessary steps to enhance the capacity of the school to around 2600 students from the then current capacity of 500 students. The petitioner was to advance to the respondent money to invest in the construction of additional buildings to enhance the capacity of the school or create additional facilities and petitioner was to deposit with the respondent a sum of Rs.1,50,00,000/- as and by way of an advance deposit. In the event of the agreement was terminated before the expiry of the term for whatever reason in accordance with the terms thereof, the respondent was to be liable to repay to the petitioner the entire outstanding advance amount. Compensation to be paid to the petitioner for the services provided was as per annexure-C to the agreement. Clause-11-term and termination-the agreement was to come into force from 31.08.2010 and was to be valid for a term of 26 years. Neither party was entitled to terminate the agreement for the term except for the reasons set out in Clause 11. The procedure for termination in the event of breach by either party of the terms of the agreement was set out in Clause 11.3. Clause 17-Arbitration-Any and all disputes that may arise under the Agreement was to be resolved by arbitration.
4. It is the case of the petitioner that pursuant to the above, the petitioner has been performing its obligations under the MANAS agreement to the satisfaction of the respondent, but respondent has not performed his obligation as contemplated. Though the respondent has failed to discharge his obligation, issued the letter dated 26.03.2019 to the petitioner wrongfully terminating the agreement dated 31.08.2010. Subsequently, the petitioner issued reply notice dated 17.05.2019 disputing the termination and invoking the arbitration agreement in the MANAS agreement. Hence, present petition is filed.
5. I have heard learned counsel for the parties to the lis.
6. Sri. Shrikara P., learned counsel for the petitioner reiterating the petition averments contended that there is no dispute between the parties with regard to the MANAS Agreement entered into between the parties on 31.08.2010 and existence of Clause 17- Arbitration. The petitioner has complied the provisions of Section 7(5) for issuing legal notice dated 17.05.2019 as per Annexure-J. The respondent has not disputed agreement and existence of arbitration clause in their reply. Therefore, he sought to allow the civil miscellaneous petition.
7. Per contra, Sri. Bala Nikit, learned counsel appearing for respondent contended that the respondent has not violated the terms and conditions of the MANAS. It is only the petitioner who has violated the same. Therefore, sought for dismissal of the petition.
8. Having heard the learned counsel for parties, it is an undisputed fact that the petitioner and the respondent entered into a Management and Non- Academic Services Agreement dated 31.08.2010. The Arbitration Clause entered into between the parties reads as under:
17. Arbitration:
“17.1 Any and all disputes that may arise hereunder shall be resolved by arbitration. The arbitration proceedings shall be conducted by a single arbitrator who shall be mutually appointed by the parties, failing which shall be appointed by the High Court of Karnataka. The arbitration shall be conducted in accordance with the provisions of the Arbitration and Conciliation Act, 1996. the venue for arbitration shall be Bangalore and the language for a arbitration shall be English.”
9. It is also not in dispute that the petitioner has complied the provisions of Section 7(5) of the Arbitration Clause by issuing legal notice. In the reply, the respondent specifically stated at paragraph-11 is as under:
“11. With respect to the Arbitrator nominated at Paragraph No.25 of your Reply, our client does not concur with the same. However, given the nature of the dispute, we request you to prevail upon your client to nominate a retired Judge of the High Court, be appointed as Arbitrator to adjudicate the dispute”.
10. For the reasons stated above, the Civil Miscellaneous Petition is allowed. Hon’ble Mr. Justice A.N.Venugopal Gowda, former Judge of this Court is appointed as a sole arbitrator to adjudicate the dispute in terms of clause-17 of the MANAS entered into between the parties dated 31.08.2010.
11. Registry is directed to send a copy of this order to Hon’ble Mr. Justice A.N.Venugopal Gowda, former Judge of this Court as well as to the Arbitration Centre, Bengaluru, forthwith, for reference.
Sd/- JUDGE JS/-