Future Uday Communication Pvt. ... vs Bennett Coleman & Co. Ltd.
2014 Latest Caselaw 5686 Del

$~19
*       IN THE HIGH COURT OF DELHI AT NEW DELHI
+       ARB.P. 561/2014
        FUTURE UDAY COMMUNICATION PVT LTD ..... Petitioner
                               Through: Mr. Alok Krishna Agarwal, Ms.
                               Ritwika Nanda, Ms. Mamta Tiwari and Ms. L.
                               Gangmei, Advocates

                               versus

        BENNETT COLEMAN & CO LTD                  ..... Respondent
                    Through: Mr. K. Datta, Mr. Ashish Verma and
                    Mr. Rahul Malhotra, Advocates

        CORAM:
        HON'BLE MR. JUSTICE RAJIV SHAKDHER
                     ORDER

% 12.11.2014

1. This is a petition filed under Section 11 of the Arbitration and Conciliation Act, 1996 (in short the Act).

2. To put it in nutshell, by this petition, a prayer is made for appointment of an arbitrator to adjudicate disputes between the parties herein. Without getting into fine details, what is not disputed before me, is that, the petitioner, in response to the legal notice issued on 09.09.2014, by the respondent, for triggering appointment of an arbitrator, in terms of clause F of its various invoices, raised on the petitioner, for the services rendered for publishing advertisements in its newspaper; broadly, took the stand that there is no arbitration agreement as between them. 2.1 This reply of the petitioner is dated 24.09.2014. In this

context, it must be stated that the petitioner in the very same reply also took the stand that it did not agree to the "nomination and appointment" of the arbitrator chosen by the respondent. 2.2 It is when, the arbitrator, so appointed by the respondent, vide communication dated 21.10.2014, sought to enter upon reference that this petition, was moved.

2.3 The petitioner has, as a matter of fact, in its reply dated 24.09.2014, broadly, sought to articulate that it was infact appointed as an agent of an entity by the name of Rapid Nutrition Pvt. Ltd., which in turn is the subsidiary of Rapid Nutrition Pvt. Ltd., an Australian entity.

2.4 It is, therefore, the case of the petitioner that only upon receipt of payments from its principal, would it be in a position to defray the invoices raised by the respondent. 2.5 It is in this context, that a conciliatory meeting was held under the aegis of the Indian Newspapers Society (in short I.N.S.), which is reflected in the document appended at page 56 of the compilation of documents filed with the petition. This document is dated 19.02.2013. The document is reflective of the fact that, a tripartite agreement, was arrived at between the petitioner, Rapid Nutrition Pvt. Ltd. and the I.N.S. Notably, the respondent was not a party to this agreement. It is, however, the contention of the petitioner that INS represented the interest of the respondent.

3. Be that as it may, the said document has two parts of it. The first part is indicative of the fact that upon receipt of the sum indicated therein by the petitioner from Rapid Nutrition Pvt. Ltd.,

the very same sum would be transmitted to the respondent. The timeline fixed for the said transaction was 25.02.2013. 3.1 The second part of the tripartite agreement was that INS would take action against the client /agency if the deadline was not met. Furthermore, Rapid Nutrition Pvt. Ltd. was debarred from advertising in India.

4. Admittedly, the petitioner having not received the amounts indicated in the document dated 19.02.2013 (which was crystallized at Rs.1.5 Crores approximately) could not, in turn, pay the respondent.

5. It is in this background that the respondent triggered the arbitration agreement and appointed an arbitrator in the matter.

6. Aggrieved by this action of the respondent, as indicated above, this petition has been moved.

7. Mr. Aggarwal in support of his petition says that while the petitioner took the stand that there was no arbitration agreement obtaining between the parties, it notably, in the alternative, asserted that procedure encapsulated in clause 'F' of various invoices was not followed.

7.1 Mr. Aggarwal says that clause F of the invoice(s) which contains the arbitration clause gives the respondent only a right to nominate an arbitrator and if, for some reason the petitioner were, not to agree with the nominee so chosen, it could then, approach the court under Section 11 of the Act for appointment of an arbitrator.

7.2 It is, therefore, Mr. Aggarwal's contention that because of

reasons articulated in the petition, it is not in agreement with the respondent's choice of the arbitrator.

8. De hors the aforesaid, what is clear is that, with the institution of the present petition, the petitioner conceded to the fact that there is an arbitration agreement in existence which would bind the parties herein.

8.1 The other submission, which is a submission made in the alternative, and relates to the right of the petitioner to maintain a petition under Section 11 of the Act if, it did not agree with the nominee of the respondent, according to me, is not articulated in the instant petition. This fact is apparent upon a bare perusal of the averments made in the petition. The averments made in paragraph 10, broadly, suggest that the petitioner is aggrieved by the nomination and appointment of the nominee so chosen by the respondent.

8.2 There are assertions in the very same paragraph, as regards the impartiality or neutrality of the nominee. There is also a suggestion that the nominee is on good terms with the legal advisors of the respondent herein. A similar apprehension is articulated in paragraphs 18 and 19 of the petition. 8.3 There is no assertion to the effect that the respondent's right under the arbitration agreement is, only to nominate, and if, the petitioner was not to agree with the nomination then, the court, would be the proper forum for seeking an appointment of the arbitrator.

9. The averments made in the petition clearly seem to suggest

that it is in substance a petition under Section 12 of the Act, and not, one, under Section 11 of the Act. Therefore, in my view, this petition is not maintainable. It is accordingly dismissed.

10. The petitioner will, however be, at liberty, if it is so advised, to move an appropriate petition for agitating the issue of purported bias of the arbitrator, appointed in the matter. The parties shall though, bear their own costs.

RAJIV SHAKDHER, J NOVEMBER 12, 2014 yg