Research › Search › Judgment

Madras High Court · body

2022 DIGILAW 96 (MAD)

T. S. Thamilan v. R. Sampathkumar

2022-01-10

SENTHILKUMAR RAMAMOORTHY

body2022
ORDER : Prayer: This petition is filed under Section 11(5) of the Arbitration and Conciliation Act, 1996 read with Clause 2 of the appointment of Arbitrator’s Scheme by the Chief Justice of Madras High Court’s Scheme, 1996, praying to (a) appoint an independent Sole Arbitrator to adjudicate all the disputes arising between the Petitioner and the Respondents pursuant to the MOU dated 01.09.2019; (b) directing the Respondents to pay the cost of this Petition; and (c) pass such further or other orders as this Court may deem fit and proper in the circumstances of the case. 1. This petition is filed under Section 11 of the Arbitration and Conciliation Act, 1996 seeking appointment of a sole arbitrator to adjudicate the dispute between the petitioner and the respondents. 2. The petitioner states that the Memorandum of Understanding dated 01.09.2019 was executed between the petitioner and the respondents herein. The said Memorandum of Understanding envisaged the admission of the petitioner herein as the Managing Partner of the firm, M/s. Balamurugan Transports. The petitioner relies upon clause 25 of the said MoU, which are set out below: “25. Dispute Resolution: 25.1 The following provisions apply if any dispute or difference arises between the Parties out of or in relation to this Agreement (The ‘Dispute’) 25.2 A Dispute will be deemed to arise when one party serves on the other party a notice stating the nature of the Dispute (a ‘Notice of Dispute’). 25.3 The parties hereto agree that they will use all reasonable efforts to resolve between themselves, any Disputes through negotiations. 25.4 Any Disputes and differences whatsoever arising under or in connection with this Agreement which could not be settled by parties through negotiations, after the period of thirty (30) Business Days from the service of the Notice of Dispute, shall be finally settled by arbitration in accordance with the Arbitration and Conciliation Act, 1996 by a sole arbitrator appointed by the Chairman and Managing Director of TVS-M. 25.4.1 all proceedings shall be conducted in English. 25.4.2 the venue of arbitration shall be Hosur, Tamil Nadu, India.” 3. According to the petitioner, disputes have been arisen between the petitioner and the respondent herein with regard to the reconstitution of the partnership firm, M/s. Balamurugan Transports, in accordance with clause 13 of the MoU. 4. The respondents have filed a counter affidavit. 25.4.2 the venue of arbitration shall be Hosur, Tamil Nadu, India.” 3. According to the petitioner, disputes have been arisen between the petitioner and the respondent herein with regard to the reconstitution of the partnership firm, M/s. Balamurugan Transports, in accordance with clause 13 of the MoU. 4. The respondents have filed a counter affidavit. In the counter affidavit, the respondents state that a criminal case has been registered against the petitioner in Crime No. 5 of 2021 under various provisions of the Indian Penal Code. In addition, the respondents state that the petitioner was required to pay a total sum of Rs. 18,50,00,000/- to the respondents. Out of the said sum, only a sum of Rs. 20 lakhs was paid. The present petition is opposed on these two grounds. 5. After the amendment to Section 11 of the Arbitration Act by Act 3 of 2016, the scope of inquiry under Section 11 is limited to whether there is an arbitration agreement between the parties and whether the dispute is manifestly non-arbitrable. In the case at hand, the parties admit that there is an arbitration agreement between them. Although the respondents assert that a criminal case has been registered against the petitioner in Crime No. 5 of 2021, the registration of such criminal case does not lead to the inference that the dispute between the parties is manifestly non-arbitrable. Therefore, the petitioner is entitled to succeed. 6. The arbitration clause provides for the appointment of a qualified advocate with at least 20 years experience. Accordingly, Arb. O.P. No. 218 of 2021 is allowed by appointing Mr. P.V. Balasubramaniam, Advocate, 111/1, Third Floor, Sai Darbar Apartments, 50, 2nd Main Road, R.A. Puram, Chennai-600028 (Mobile No. 9841041888) as the Sole Arbitrator. The Sole Arbitrator is directed to enter upon reference and adjudicate the dispute in accordance with law. It is open to the Sole Arbitrator to fix the fees and expenses in relation to the arbitral proceedings.