Delhi High Court
Empathy vs Mrs. Jyoti Abrol And Anr. on 26 October, 2004
Author: R Jain
Bench: R Jain
JUDGMENT
R.C. Jain, J.
1. The defendants have moved this application under Section 8 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'The Act') praying that the suit filed by the plaintiff may be dismissed and disputes between the parties be referred to the arbitration in terms of clause 15 of the Partnership Deed dated 8.4.2003.
2. M/s Empathy claiming itself to be a partnership firm situated at A-1/118, Safdarjang Enclave, New Delhi has filed a suit for permanent and mandatory injunction, passing off, damages and rendition of accounts, delivery up etc with the averments and allegations that the firm was constituted with the defendants on 26.6.2001 for dealing in the business of physical health and body care. The firm had applied for registration of the trade mark 'Empathy' vide registration No.1083235 dated 26.2.2002 and again on 24.1.2004 The plaintiff firm has made huge investment in the said business by purchasing several costly machines. It is alleged that certain disputes/differences have arisen between the parties in relation to the said trade mark 'Empathy' etc and the defendants have also not paid the entire price of the machines and equipment.
3. The defendants being summoned have filed the present application under Section 8 of the Act as also an application under Order 7 Rule 11 CPC for rejection of the plaint on the ground that the suit filed on behalf of the unregistered partnership firm is not maintainable.
4. In the case in hand, the existence of arbitration agreement between the parties as contained in clause 15 of the partnership deed is not disputed. The said clause reads as under:
''That any dispute or difference which may arise between the partners or their legal representatives with regard to continuation, meaning or affect of this deed or any part thereof or any matter whatsoever related to the firm, shall be referred to arbitraion as per Arbitration Act, if not mutually settled.''
5. The existence of disputes/differences between the parties is also accepted and, therefore, in terms of Section 8 of the Act, the proceedings in the present suit cannot be continued and the disputes/differences between the parties are liable to be referred to arbitration. In the case of Hindustan Petroleum Corporation Ltd. Vs. Pinkcity Midway Petroleums, , the Supreme Court has unequivocally held that if in an agreement between the parties before the Civil Court, there is a clause for rbitration, it is mandatory for the Civil Court to refer the disputes to an Arbitrator. The Apex Court also dealt with a question as to what would be the role of a Civil Court when an argument is raised that such an arbitration clause does not apply to the facts of the case in hand. The Hon'ble Supreme Court repelled the contention that since the applicability of the arbitration clause to the facts of the case goes to the root of jurisdiction of the reference to arbitration, this question will have to the decided by the Civil Court before referring the matter to arbitration even in cases where an arbitration clause admittedly exists. The Court ruled that Section 16 of the Arbitration and Conciliation Act, 1996 makes it clear that if there is any objection as to the applicability of the arbitration clause to the facts of the case, the same will have to be raised before the Arbitral Tribunal concerned.
6. Bearing in mind the settled legal proposition and the factual position that the existence of arbitration agreement and that of the disputes is accepted by the parties, this Court is of the considered opinion that the application under Section 8 of the Act deserves to be allowed and the suit is liable to be dismissed.
7. In the result, the application under Section 8 of the Act is hereby allowed. Mrs.Kanwal Inder, retired District and Sessions Judge, Delhi (R/o D-1/106, Rabinder Nagar, New Delhi, Tel:22303971) is appointed as the sole arbitrator to settle the disputes differences between the parties including those referred to in the present petition and any counter-claim which might be raised on behalf of the defendants. The arbitrator shall enter upon the reference and render the award as expeditiously as it may be practicable. The arbitrator shall be paid a fees of Rs.50,000/-, to be paid in equal proportion by the plaintiff and the two defendants. The parties are directed to appear before the arbitrator on 5th November, 2004 at 4.00 P.M. A copy of the order be orwarded to the named arbitrator forthwith.
