Delhi High Court
M/S Satyadhara Communications ... vs M/S Indiasign Pvt. Ltd. on 24 July, 2019
$~11
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ O.M.P. (COMM) 208/2018
Date of Decision : 24th July, 2019
M/S SATYADHARA COMMUNICATIONS PVT. LTD
..... Petitioner
Through: Mr.Abid Ali Beeran, Mr.P.M.
Haneef and Mr.Sarath
Janardhanan, Advs.
versus
M/S INDIASIGN PVT. LTD. ..... Respondent
Through: Mr.Gaurav Kejriwal and
Mr.Sujit Keshri, Advs.
CORAM:
HON'BLE MR. JUSTICE NAVIN CHAWLA
NAVIN CHAWLA, J. (Oral)
1. This petition under Section 34 of the Arbitration and
Conciliation Act, 1996 (hereinafter referred to as the 'Act') has been
filed by the petitioner challenging the Arbitral Award dated
08.04.2016 passed by the Sole Arbitrator adjudicating the disputes that
have arisen between the parties in relation to the Agreement dated NIL
executed between the parties whereby the respondent had granted the
use of its Teleport services on "INTELSAT, IS-17 Satellite" to the
petitioner.
OMP(COMM) No.208/2018 Page 1
2. The disputes between the parties arose out of alleged non-
payment of the charges for the use of such facility by the petitioner
primarily on account of the variations in the foreign exchange. The
respondent, claiming that an amount of Rs. 63,25,958/- remained
outstanding from the petitioner, suspended the services being provided
to the petitioner on 15.10.2014. The petitioner in return by an e-mail
dated 22.10.2014, terminated the Agreement, which led to the disputes
between the parties.
3. The learned counsel for the petitioner submits that in terms of
Clause 5.1 of the Agreement only the respondent has a right to
terminate the Agreement, that too, after giving one month's notice in
advance to the petitioner. The petitioner has no right to terminate the
Agreement. He further submits that in terms of Clause 10 of the
Agreement, which is the Arbitration Agreement between the parties,
only the disputes with regard to obligations of the parties upon
termination of the Agreement can be referred to arbitration. In the
present case, as the termination of the Agreement itself is invalid, the
Arbitrator has no jurisdiction to entertain the disputes.
4. I have considered the submissions made by the learned counsel
for the petitioner, however, I find no merit in the same. The petitioner
by its e-mail dated 22.10.2014 had clearly stated that it would no
longer be availing the services of the respondent and the e-mail be
treated as a termination of the Agreement. The respondent accepted
this termination of the Agreement and lodged its claim accordingly.
OMP(COMM) No.208/2018 Page 2
5. Even otherwise, Clause 10 of the Agreement, which is the
Arbitration Agreement between the parties, is reproduced
hereinunder:-
"10 ARBITRATION
In the event of any dispute or differences arising
between the parties hereto either touching upon the
subject matter of this agreement or the
interpretation thereof or in relation to the
obligations of the parties upon termination of this
agreement in respect of rights and liabilities of the
parties thereafter or in any way connected
therewith or in respect thereof it shall be referred
to the arbitration of sole arbitrator, the Managing
Director of Indiasign Pvt. Ltd, Hindi Bhawan New
Delhi, or any other office nominated by Managing
Director and it shall be deemed to be a reference
under the Indian Arbitrator & conciliation acts,
1996. All the arbitration proceedings shall be held
at New Delhi."
6. The above Arbitration Agreement is extremely wide and clearly
states that any disputes or differences arising between the parties and
touching upon the subject matter of the Agreement or in any way
connected therewith or in respect thereof shall be referred to
arbitration. Therefore, all disputes, including the validity of
termination or the demand raised by the respondent, for foreign
exchange fluctuation charges would clearly fall within the scope of the
OMP(COMM) No.208/2018 Page 3
Arbitration Agreement and the Arbitrator would have jurisdiction to
adjudicate thereon.
7. It is further contended by the learned counsel for the petitioner
that as the claim of the respondent was based on the variation in the
foreign currency value, the respondent was to produce the requisite
documents before the petitioner and later, before the Arbitrator in
proof of such variation and in support of its claim. Having failed to do
so, the Arbitrator has erred in awarding the amount claimed by the
respondent.
8. On the other hand, the learned counsel for the respondent
submits that the respondent had been regularly raising its invoices
based on the foreign exchange fluctuation. These invoices were not
disputed by the petitioner at any point of time. Before the Arbitrator
the only dispute raised was to the statement of account filed by the
respondent. The Arbitrator went into this issue and found that the
statement of account filed by the respondent was supported by the
documents, that is, invoices and the payments. The counsel for the
petitioner was unable to show any discrepancy therein before the
Arbitrator or even to this Court. He submits that even in the petition
filed before this Court, the petitioner had not raised any such
grievance against the Statement of Account.
9. I have considered the submissions made by the learned counsels
for the parties. A reading of the Award clearly shows that before the
Arbitrator the plea raised by the petitioner was that the statement of
OMP(COMM) No.208/2018 Page 4
account filed by the respondent is incorrect. The Arbitrator considered
this issue at length and observed as under:-
"17. That after examining in detail all the documents,
bills and the statement of account filed by the
claimant, I made specific queries from the
respondent, to point out as to how the statement of
account or the bills of the claimant were incorrect,
as alleged by the respondent. The counsel for the
respondent failed to point out any error or
discrepancy in the statement of account. He had no
answers or explanation, when his attention was
drawn to the fact that regular and timely payments
were not made against each bill and in fact the
payments were made on account and after taking
into account all the payments made by the
respondent and all the bills raised by the claimant,
a sum of Rs. 63,25,958/- was outstanding against
the respondent. The respondent also admitted that
from 01.08.2013, in the bills raised by the claimant,
the amount of the differential amount, of foreign
exchange fluctuation on bandwidth charges was
also claimed in every bill as per the agreement
between the parties. The respondent has also
admitted this position by paying the monthly bill of
amount Rs. 7,70,000/- (including the differential
amount of foreign exchange variation), in para 5 of
the written statement and also in its E-mail dated
10.10.2014 to the respondent."
10. The counsel for the petitioner has relied upon paragraph 9, 18
and 19 to contend that the plea of lack of proof of foreign currency
OMP(COMM) No.208/2018 Page 5
fluctuation has been taken in the petition. These paragraphs are
reproduced hereinbelow:-
9. It is not true that as per clause the respondent was
liable to pay charges to the tune of Rs. 7,70,000/-
(Rupees Seven Lakh Seventy Thousand only) per
months for the proper service of uplinking by the
claimant company. In other words if proper service
is not rendered the claimant is not entitled to
receive the amount and the respondent is not liable
to pay the same. At the same time it is humbly
submitted that the respondent company has paid
the monthly charge without any fail, if a true and
correct account of the transaction is produced it
can be seen that the respondent was regular in
making monthly payments.
xxxxxx
18 The interest calculated, the amount awarded etc. is
arbitrary, unsustainable, unfounded and unjust in
every respect.
19. The award is not a speaking award at all. It does
not discuss about the admissibility of the
documents produced and the maintainability of the
claim at all. The award amount is unsustainable
and against the rules of equity and Justice."
OMP(COMM) No.208/2018 Page 6
11. I do not find the above paragraphs to be urging the plea which is
now being taken by the counsel for the petitioner. I, therefore, find no
merit in the objection raised by the petitioner.
12. Learned counsel for the petitioner lastly submitted that in terms
of Clause 5.2.4 of the Agreement, the petitioner is liable to pay for the
remaining period of the Contract only when there is a valid
termination of the Contract by the respondent. In the present case, as
the termination of the Contract was not valid, the petitioner was not
liable to pay such amount and the Arbitrator has erred in awarding this
amount in favour of the respondent.
13. As already observed earlier, it was the petitioner who had
terminated the Agreement by an e-mail dated 22.10.2014. The
Arbitrator has also considered this issue and has observed as under:-
"19. Claim of Rs. 30,80,000/-: That the respondent has
admitted the terms and conditions of the agreement
and is bound by the same. The claimant has
claimed monthly charges suspended the services w.
e. f. 15.10.2015. As per admitted terms and
conditions of the agreement, the claimant is entitled
for monthly charges even during the suspension
period. Also as per the admitted clause 5.2.4 the
respondent is liable to pay for the entire period of
the contract in case of termination. The respondent
has claimed that the claimant is not entitled for the
sum of Rs. 30,80,000/- for the period 01.11.2014 to
28.02.2015 as the contract was not validly
terminated by the claimant. However, the case of
the claimant in the claim petition and also during
OMP(COMM) No.208/2018 Page 7
the arguments is that the contract has been
terminated by the respondent vide its letter/Email
dated 22.10.2015 and hence the respondents are
liable to pay the monthly charges till 28.022015. It
is on record that the agreement was terminated by
the respondent on 22.10.2015 with immediate
effect. I hold that the claimants are entitled to the
claim of Rs. 30,80,000/- for the monthly charges
for the period 1.11.2014 to 28.02.2015."
14. I see no reason to disagree with the finding of the Arbitrator.
15. In view of the above I find no merit in the present petition and
the same is dismissed with cost quantified at Rs.25,000/-.
NAVIN CHAWLA, J
JULY 24, 2019/rv
OMP(COMM) No.208/2018 Page 8
