Viom Networks Limited vs Videocon Telecommunications ...
2016 Latest Caselaw 5985 Del

*       IN THE HIGH COURT OF DELHI AT NEW DELHI

%                        Order delivered on: 15th September, 2016

+                    ARB. P. No.346/2016

        VIOM NETWORKS LIMITED                           ..... Petitioner
                     Through         Mr.Amar Gupta, Adv. with
                                     Mr.Manish K. Jha & Mr.Divyam
                                     Agarwal, Advs.

                         versus

        VIDEOCON TELECOMMUNICATIONS LIMITED    ..... Respondent
                      Through Mr.Sndeep S. Ladda, Adv. with
                              Mr.Soumik Ghosal & Mr.Devender
                              Singh, Advs.

        CORAM:
        HON'BLE MR.JUSTICE MANMOHAN SINGH

MANMOHAN SINGH, J. (ORAL)

1. The petitioner has filed the abovementioned petition under Section 11(6) of the Arbitration and Conciliation Act, 1996 for appointment of an Arbitrator on behalf of the respondent, in the arbitration initiated by the petitioner vide its letter dated 21st April, 2016 for resolving the disputes and differences that have arisen under the Agreements between the parties and as mentioned in the present petition. The prayer is also made to appoint an Arbitrator who would act as the Presiding Arbitrator, in the event that the Arbitrator nominated by the petitioner and the Arbitrator appointed by this Court on behalf of the respondent fail to agree upon the name of the third arbitrator within a time frame as fixed by this Court.

2. The relevant dates and events are referred as under:-

(i) On 1st November, 2008, a Passive Infrastructure Sharing Agreement ("QTIL MSA") was entered into between Quippo Telecom Infrastructure Ltd. ("QTIL") and Datacom Solutions Private Ltd. (now Videocon Telecommunication Limited) for providing passive telecom infrastructure facilities and services all over India.

(ii) On 14th August, 2009, the Wireless-TT Info Services Limited (WTTIL) entered into a Master Infrastructure Provisioning Agreement with the respondent for providing passive telecom infrastructure facilities and services all over India including at specific circle/s as may be specified in the agreement ("WTTIL MSA").

(iii) In 2010, QTIL merged their passive infrastructure businesses with WTTIL vide a scheme of arrangement under Sections 391-394 of the Companies Act, 1956. Subsequently, the name of WTTIL was changed to Viom Networks Limited, the Petitioner herein.

(iv) On 20th May, 2010 WTTIL MSA was amended by way of an Addendum Agreement ("Addendum-WTTIL MSA"), by which Quadrant Televentures Limited ("QTL") was included as a Party under the WTTIL MSA along with subsequent amendments. The QTIL MSA was also amended by way of an Addendum Agreement dated 22nd January, 2009 and 20th May, 2010 ("Addendum-QTIL MSA"), by which QTL was included as a Party the QTIL MSA along with subsequent amendments.

(v) Thereafter, the parties decided to have a single Agreement between the petitioner and the respondent. But pending

execution of single Agreement, the parties decided to amend WTTIL MSA and QTIL MSA vide an addendum dated 27th December, 2010 executed between the petitioner, respondent and QTL ("Addendum").

(vi) In December, 2011, the total recoverable outstanding from the respondent accumulated to Rs.65.27 Crores. The respondent approached the petitioner with a request to change certain terms and conditions of QTIL MSA, WTIIL MSA, Addendum and TFCITL MSA (Collectively called as "Agreement") and flexibility in payment of all outstanding dues.

(vii) On 12th December, 2011, the petitioner and respondent, alongwith VINL, QTIL, and WTIIL entered into a Memorandum of Understanding ("MOU") to change a few of the terms and conditions of the aforesaid Agreement including the payment terms and terms relating to power and fuel costs. The respondent acknowledges the outstanding amount.

(viii) Thereafter, on 12th September, 2013, the parties executed a Supplementary Agreement for resolving the outstanding issues between the parties. The respondent acknowledged an outstanding amount of Rs.70.88 crores on account of IP Fees and bills for power and fuel reimbursement.

(ix) By letter dated 27th November, 2015, the respondent communicated that it would shut down its mobile operations in Gujarat service area with effect from midnight of 26th December, 2015. The respondent further requested the petitioner to immediately stop monthly billing for the sites

and allow the respondent to remove its telecommunication equipment without imposing any exit penalty.

(x) The Petitioner received another letter of the same date from the respondent suggesting for revision of the agreed extended lock-in period and proposed the lock-in period to be revised to 23 months.

(xi) On 7th December, 2015, the petitioner informed the respondent of its consistent default and demanded Rs.159.02 Crores plus applicable taxes, on account of loss of revenue; Lock in charges/Exit fee of Rs.78.34 Crores plus applicable taxes on account of premature exit from sites in Gujarat; Outstanding Monthly Fee and other charges, amounting to Rs.91.40 Crores; Rs.30.34 Crores on account of waiver of interest; Payment of interest amount of Rs.21.60 Crores accrued till April 2013 and interest @ 18% p.a. from the date on which the sums were due till the date of actual payment.

(xii) This Court vide its order directed the respondent to deposit the claim amount if the spectrum is sold to any third party.

(xiii) By letter dated 11th April, 2016, the petitioner asked the respondent to pay for the IP fee for the month of March 2016. In reply to the said letter, the respondent without denying their liability, simply stated that since the matter is subjudice, they will not make any payments.

2.1 It is stated by the petitioner that as per the mechanism for resolution of dispute provided under Clause 17.1 and 17.2 of the Wireless-TT Info Services Limited ("WTTIL") Master Infrastructure

Provisioning Agreement, the parties agreed that the disputes will have to be referred to Sole Arbitrator mutually appointed by the parties.

2.2 Accordingly, the petitioner had proposed the name of Ms. Justice Usha Mehra, Former Judge of this Court, B-57, Defense Colony, Delhi-110024, to act as an Arbitrator and adjudicate upon the disputes under the Agreements. The respondent in its reply to the arbitration notice has not consented to the name of Ms. Justice Usha Mehra to act as sole Arbitrator. Since, the respondent is not agreeable to the appointment of the said arbitrator as sole Arbitrator, Mrs. Justice Usha Mehra shall be treated as the nominee of the petitioner to the Arbitral Tribunal consisting of three Arbitrators as provided under the WTTIL Master Infrastructure Provisioning Agreement.

2.3 Since there is a continuous liability on account of non-payment of monthly fee and accumulated interest, under these circumstances, the petitioner was constrained to invoke the arbitration agreement on 21st April 2016 for settlement of the disputes under the two Master Infrastructure Provisioning Agreements as per dispute resolution clause provided in the WTTIL MSA.

3. The petitioner states that till the filing of the present petition, which is more than thirty days (30) days from the date of notice of invocation of arbitration calling upon the respondent to nominate their Arbitrator, it has not received any communication from the respondent appointing their nominee Arbitrator.

4. Learned counsel for the petitioner states that there is a valid and binding arbitration agreement between the parties. It is just, necessary and equitable that this Court may appoint an arbitrator on behalf of the respondent on the Arbitral Tribunal consisting of three

Arbitrators for adjudication of the disputes/claims as stated in the present petition and other claims, disputes or differences as may be submitted by the petitioner before the Tribunal.

5. Notice of this petition was issued to the respondent. Time was also given to the respondent to file the reply. However, the reply was not filed. Further time is sought. The request is opposed by the petitioner.

6. The only contention of the respondent is that the disputes between the parties are to be decided by the TDSAT and not under the Arbitration Act. When it was pointed out to him that the similar issue has already been decided by another Bench in Viom Networks Ltd. v. S-Tel & Ors., reported in AIR 2014 Del. 31, as well as by this Court in O.M.P.(I) (COMM.) No.95/2016 between the same parties vide judgment dated 14th September, 2016, counsel says that the respondent intend to contest the said decision, however, it is not denied by the counsel for the respondent that there is valid agreement executed between the parties which contains the arbitration clause.

7. I have heard the learned counsel for the parties. In case the averments made in the petition and the documents placed on the record are read in a meaningful manner, I am of the view that the prayer made in the above said petition is liable to be allowed. As far as the objection of the respondent is concerned, the respondent is at liberty to raise the same before the Arbitral Tribunal. There is no stay by any Court about the findings of two Courts, thus, there is no impediment to pass this order.

8. Accordingly, Dr. Justice M.K. Sharma, former Judge, Supreme Court of India (Mobile 9818000190) is appointed as an Arbitrator on behalf of the respondent. Both the Arbitrators, as appointed by the petitioner as well as by this Court, will mutually appoint a Presiding Arbitrator within one month. The Arbitral Tribunal shall adjudicate the disputes and differences that have arisen under the Agreements between the parties and as mentioned in the present petition. The parties are also allowed to file their respective claims and counter- claims before the Arbitral Tribunal.

9. The Arbitral Tribunal shall ensure the compliance of the provisions of Arbitration and Conciliation (Amendment) Act, 2015 before commencing the arbitration. The fee of the Arbitrators consisting the Arbitral Tribunal shall be in terms of the schedule of the amended Act.

10. The petition is accordingly disposed of.

11. Copy of this order be given dasti to the learned counsel for the parties and a copy thereof be delivered to the learned Arbitrators forthwith.

(MANMOHAN SINGH) JUDGE SEPTEMBER 15, 2016