M/S Link Transport Co v. M/S Arch Pharma Labs Ltd

IN THE HIGH COURT FOR THE STATE OF TELANGANA

AT HYDERABAD WEDNESDAY ,THE SECOND DAY OF DECEMBER TWO THOUSAND AND TWENTY PRESENT THE HONOURABLE SRI JUSTICE A.RAJASHEKER REDDY ARBITRATION APPLICATION NO: 59 OF 2020 Between:

lr//s Link Transport Co, Represented by its Proprietor, Mr. Rami Reddy, S/o Narasimha Reddy, Aged 55, Plot No.45, Road. No.0B, rd Phase, SVCIE, Balanagar, Hyderabads00037 ...APPL|CANT AND M/s Arch Pharma Labs Ltd, Sy No. 323, Gundlamachunoor, Hatnoora Mandal, Sangareddy District Telangana - 502319 ...RESPONDENT Arbitration Application Under Section 11 ( 5) & ( 6) of Arbitration and Conciliation Act '1 996 R/w. Scheme for Appointment of Arbitrator , 1996 praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to appoint a Sole Arbitrator for the purpose of adjudication of the disputes that have arisen between the Petitioner and the Respondent under Agreement Dt1610412012 and renewed latest on 2010112017 for settlement of accounts and to determine the amount receivable by the petitioners from the Respondents and other incidental reliefs.

Counsel for the Applicant :SRl V. SEETHARAMA AVADHANI Counsel forthe Respondent: SRI D. NARENDAR NAIK The Court made the following: ORDER

HON'BLE SRI JUSTICE A.RAJASHEKER REDDY Arbitration Application No.59 of 2020 ORDER:

This application is filed under Section 11(5) & (6) of the Arbitration and Conciliation Act, 1996 (for short'the Act'), seeking to appoint an arbitrator for adjudication of disputes between the petitioner and the respondent by virtue of Clause 24 of the agreement daled 20.01 .2017 .

2. The brief facts of the case are that the applicant and the respondent had entered into Staff Buses Agreement dated 16.04.2012 and the same was renewed on 20.01 .2017 and thereafter, the respondent had stopped paying the bills and as such, the applicant issued notice dated 14.10.2019 invoking the arbitration clause. lt is further stated that though said notice was served on the respondent, there was no response from it. Hence, the present application is filed.

3. The respondent filed counter-affidavit stating that notice daled 14.10.2019 issued by the applicant was in the form of a demand notice for payment of certain amounts allegedly due by the respondent and it is not a notice invoking arbitration under Section 21 of the Act and that the applicant failed to issue notice invoking arbitration clause. lt is further stated that as per clause 24 of lhe agreement, if both parties failed to settle the dispute amicably, the dispute shall be referred to arbitration, but the applicant has bypassed the statutory pre-condition as well as the !

contractual pre-condition and hence, the arbitration application is not maintaina ble.

4.

Learned counsel for the applicant submits that as the respondent has not submitted any reply to the notice dated 14.'10.2019 disputing the

) ARR, J Arb.Appl.No.59 of 2020 existence of arbitration clause and even in the counter-affidavit also, there ls no dispute with regard to existence of arbitration clause, this application may be allowed by appointing an arbitrator.

5.

Learned counsel for the respondent submits that when there is no invocation of arbitration clause, the present application is not maintainable. He also submits that the petitioner has not made any effort for amicable settlement, and as such, the application is liable to be dismissed. 6.

A reading of notice daled 14.10.2019 goes to show that the applicant has demanded the respondent to pay a sum of Rs.20,09,108/- towards arrears within 7 days, reservlng right to initiate arbitration proceedings as per clause 24 of lhe agreement dated 20.01 .2017, and that even according to the applicant, no further notice was issued and as such, there is no invocation of arbitration clause and even there is no demand made by the applicant for amicable settlement.

7.

ln view of the above, this Court is of the opinion that the arbitration application is premature and accordingly, the Arbitration Application is dismissed. However, this order will not prevent the applicant from invoking the arbitration clause by following due process as envisaged under Clause 24 o'f lhe agreement.

B. As a sequel thereto, miscellaneous applications, if any, pending in the Arbitration Application shall stand dismissed. Sd/-M.SANTHI VARDHANI JOINT REGBTRAR xi -.- SECTISN OFFICER //TRUE COPY// To

1. One CC to SRl. V SEETHARAMA AVADHANI Advocate [OPUC]

2. One CC to SRl. D NARENDAR NAIK Advocate [OPUC]

3. Two CD Copies 4$\ >-

HIGH COURT ARRJ DATED:0211212020 BE SI4 ( 22 DEC M o z a'

-t * c P,AT

ORDER

ARBITRATION APPLICATION No.59 of 2020 DISMISSING THE ARBITRATION APPLICATION.

/,r'\ t\) ^rzo ,N$"