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2007 DIGILAW 1386 (BOM)

Sisodiya Polymers v. Balkrishna Industries Ltd.

2007-09-21

S.B.DESHMUKH

body2007
JUDGMENT :- Heard learned counsel for the respective parties. 2. The petitioner, by this application, seeks an appointment of the sole arbitrator. The petition is filed on 9-1-2006. Copy of memorandum of understanding dated 7-3- 2003 is produced on record. According to the petitioner, this agreement is entered into between the parties at Mumbai. The petitioner is carrying the business of manufacturing of tyre, tubes and flaps at Aurangabad. Plant of the petitioner is situated at village Waluj, Aurangabad. The petitioner is also outsourcing from Bangalore, Silvasa and Kerala. It is further averred in the petition that the respondents have agreed to provide 4-5 kneaders, in due course time along with 1 or 2 suitable mills for the purpose of mixing of compound, remill on the basis of the job work. The petitioner performed their part by purchasing and installing required equipments, building shed etc. at their own costs in their premises, where sufficient space is available. According to the petitioner, the petitioner has complied with the terms .of the memorandum of understanding entered into between the parties on 7-3-2005. It is alleged that the respondents did not perform their part of the agreement. The respondents have not provided three new kneaders. According to the petitioner, the respondents have supplied two old kneaders of inferior quality, resulting into breakdown. According to the petitioner, the kneaders supplied by respondents have been rendered useless within eight days. The petitioner has also alleged short comings in the drive gear of the kneaders supplied by respondents to the petitioner. Notice was addressed to respondents on 25-10-2005, by which the petitioner sought an appointment of the Arbitrator for settlement of the dispute and also suggested name of Advocate Shri. D.S. Bharuka, to be the Sole Arbitrator. This notice has been replied by respondent No.1 By this communication dated 28-10-2005, contentions raised in the notice dated 25-10-2005 have been disputed by the respondents. According to respondents, agreement between the parties was entered into at Mumbai. Respondents by its communication dated 28-10-2005 disputed the name of Shri. D. S. Bharuka, Advocate as a Sole Arbitrator. However, no name of any Arbitrator was suggested by respondents. 3. On behalf of respondents, one Shri. Bharat Shantilal has filed affidavit in reply. It has been pointed out in the reply that name of Justice Zunzunwala (former Judge of the High Court) was suggested to be an Arbitrator between the parties. However, no name of any Arbitrator was suggested by respondents. 3. On behalf of respondents, one Shri. Bharat Shantilal has filed affidavit in reply. It has been pointed out in the reply that name of Justice Zunzunwala (former Judge of the High Court) was suggested to be an Arbitrator between the parties. It is referred in paragraph No.3 of the counter affidavit that application under Section 9 of the Arbitration and Conciliation Act, 1996 ("Act of 1996") was filed by the respondents, which is registered as MARJI 375 of 2005. Grievance is raised that the memorandum of understanding is entered into between the parties at Mumbai and head office of the respondents company is also situated at Mumbai. According to respondents, application should have been submitted at Mumbai or this application be transferred to Mumbai. 4. I have' gone through the memorandum of understanding (Annexure "A"). It is true that the memorandum of understanding has been executed between the parties at Mumbai on 7-3-2005. This memorandum of understanding makes a provision for appointment of Arbitrator in case of differences between the parties. Appointment of an Arbitrator is a matter, which can be dealt with in accordance with Section 11 of the Act of 1996. Section 11(5) of the said Act, which is relevant, is reproduced herein below:- “(5). Failing any agreement referred to in sub-section (2), in an arbitration with a sole arbitrator, if the parties fail to agree on the arbitrator within thirty days from receipt of a request by one party from the other party to so agree the appointment shall be made, upon request of a party, by the Chief Justice or any person or institution designated by him.” Thus, powers have been conferred upon the learned Chief Justice of the High court as the case on hand is concerned. This Court is designated by the learned Chief Justice to entertain and decide the application. In the case on hand, activity concerned, undisputedly, was being carried out at Aurangabad, though the agreement is entered into between the parties at Mumbai. In this view of the matter, in my opinion, this court has jurisdiction to entertain the application of the petitioner seeking appointment of an Arbitrator. 5. From the record, it is revealed that the petitioner had addressed a notice dated 25-10-2005 to respondents. This communication has been received by the respondents. In this view of the matter, in my opinion, this court has jurisdiction to entertain the application of the petitioner seeking appointment of an Arbitrator. 5. From the record, it is revealed that the petitioner had addressed a notice dated 25-10-2005 to respondents. This communication has been received by the respondents. Respondents had suggested name of the Arbitrator, by communication dated 14-12-2005. Having considered the material on record in my view, provision for appointment of Sole Arbitrator is made in the memorandum of understanding. Differences between the parties can be resolved by appointing an Arbitrator. Dispute between the parties cannot be said to be out of limitation and/or stale. Arbitral dispute, therefore, existed between the parties on the date of filing of the application. In my view present application can be favorably considered under section 11(6) of the Act of 1996. 6. I have considered the submissions of respective counsel in relation to appointment of Shri. Justice A.S. Bhate (Retired), as a Sole Arbitrator Shri. Bajaj, learned Advocate for respondents has no objection for his appointment. 7. In this view of the matter, petition is allowed. Shri. Justice A.S. Bhate (Former Judge of the Bombay High Court), “Snehgatha” Plot No.3, NS-4, N/4 Cidco, Aurangabad is appointed as a Sole Arbitrator to resolve the dispute/differences between the parties. Petitioner is directed to deposit Rs.25,000/- (Rs. Twenty Five Thousand only) in this court, within four weeks from today. Registry to issue appropriate writ to Arbitrator so appointed. Petition allowed.