Esgee Enterprises vs International Cycle Gears
2001 Latest Caselaw 1487 Del

JUDGMENT

V.S. Aggarwal, J.

1. There was an agreement between the parties dated 21st May, 1986. It contained an arbitration clause. The disputes had arisen and the arbitrator had been appointed by the Indian Council of Arbitration. The arbitrator had given the award to which objections have been filed by the petitioner, which is a partnership concern. It is asserted that the petitioner is engaged in the business of import/export and the marketing of goods. The petitioner had met the representative of the respondent at the International Cycle show in New York. In pursuance of the meeting and the discussion at New York the respondent had addressed a letter dated 22nd April, 1986 to the claimant/petitioner. It offered the sole agency to the petitioner for U.S. market with this understanding that respondent would not sell their product directly to the customer. The petitioner had accepted the proposal. The agreement was drawn between the parties and it was duly signed.

2. It is asserted that respondent in its letter of 21st May, 1986 suggested the names of various parties and quoted the price at which the products of the respondent was to be sold. After receipt of the letter of 24th April, 1986 with the prices from the respondent and signing of the agreement the petitioner sent a telex on 3rd June, 1986 regarding reduction of the prices. The respondent sent to the petitioner a proforma invoice whereby the petitioner intended to import free freewheels initially for $ 10,125/- in order to stock them in its warehouse and resell the customers as ordered, 90 days credit was allowable. When petitioner contacted potential buyers by personal visits he was informed by (1) Bicycle Corporation of America Allentown, PA; (2) The Murray Ohio Manufacturing Co. Brentwood, TN; (3) Ross Bicycles, Inc. Allentown PA; Kent International, Kearney, NJ Procycle Inc., Because, Que; (4) The Excel Group of USA, Franklin Park, II Roadmaster, Kent WA; (5) Columbia Manufacturing Co. Westfield, MA and others that they qualify the supplier, by in bulk, have their own financial and other agreements to import various bicycle components in bulk saving transportation costs from shipyard to agents warehouse. In this manner the buyers realised substantial saving and, therefore, they insisted on direct imports. This was the outcome of the discussion of the petitioner.

3. Petitioner after receipt of certain letters asked the respondent to keep the prices at such level means to make the task more difficult in creating the market for the product of the respondent. The respondent instead of considering the same again vide letter dated 5th August, 1986 stated that the price of 6 speed in US $ 2.00 which is quoted after signing of the agency agreement just to create the hindrance in the smooth working of the agreement. Subsequently which dispute arose the respondent cancelled the agreement and in accordance with the arbitration clause the matter was referred to the arbitrator. The award is stated to the illegal asserting that arbitrator has misconducted himself. It is alleged that the arbitrator is wrong in holding that the cancellation of the agency agreement was valid. It was also wrong in rejecting the claim of the petitioner of 5% commission on the transaction done at focus India Expo Fair held between 24th to 27th February, 1987. Petitioner's claim is that earlier there was no market of the product of the respondent, the petitioner with all its efforts, personal visits, telephonic calls convinced the customers for the products of the respondent. There was good scope for their products in U.S.A. The arbitrator was wrong in rejecting the claim of 5% commission. It is also asserted that the arbitrator failed to consider the claim pertaining to the expenses incurred of Rs. 1,04,926/- in generating business in U.S.A. for the respondent.

4. Notice was issued but there was no appearance on behalf of the respondent. The evidence was led by the petitioner by way of the affidavit.

5. It is a settled principle of law that the arbitrator is a domestic tribunal and ordinarily his findings have to be binding on the parties unless he misconduct himself in terms that principle of natural justice are not followed or comes to a finding which is total erroneous and there can be no other view that is possible or any other legal misconduct which may not be possible to be summarised. The Court ordinarily will not sit as a Court of appeal to reappraise the said findings.

6. Perusal of the award passed by the arbitrator reveals that the arbitrator had gone into the facts and had come to a particular conclusion. Each of the claim of the petitioner has been gone into except claim No. 1. These are findings of facts and proved reasons have been given it cannot even be termed, therefore, that the award is unreasoned. The arbitrator came to the conclusion that the petitioner was not entitled to 5% commission and further that the contract was validly terminated. To this extent keeping in view the aforesaid reasoning this Court will not interfere.

7. However, learned counsel for the petitioner pointed that there is no finding recorded with respect to claim No. 1.

8. Claim No. 1 the petitioner had stated that it had incurred expenses in generating business in United States of America and Canada. The expenses claimed was Rs. 1,04,926/-. In this regard the arbitrator has not recorded any finding. It is necessary and imperative that findings should be recorded on each of the claim but once a finding is not recorded necessarily on that count the matter would require remission/remand.

9. To that extent only the petition is allowed and it is directed that the arbitrator will consider claim No. 1 afresh after issuing the notice to the parties. In case the arbitrator is not available Indian Council of Arbitration may appoint another arbitrator.