Siemens Factoring Private Limited vs Abb India Limited
2025 Latest Caselaw 11463 Kant

Karnataka High Court

Siemens Factoring Private Limited vs Abb India Limited on 16 December, 2025

Author: Suraj Govindaraj

Bench: Suraj Govindaraj

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                                                         CMP No. 250 of 2023


                   HC-KAR




                   IN THE HIGH COURT OF KARNATAKA AT BENGALURU

                      DATED THIS THE 16TH DAY OF DECEMBER, 2025

                                            BEFORE
                      THE HON'BLE MR. JUSTICE SURAJ GOVINDARAJ
                            CIVIL MISC. PETITION NO. 250 OF 2023
                   BETWEEN

                   SIEMENS FACTORING PRIVATE LIMITED
                   PLOT NO 02, SECTOR NO 2
                   KHARGHAR NODE, NAVI MUMBAI
                   RAIGARH - 410210
                   REP BY ITS AUTHORISED SIGNATORY

                                                                 .... PETITIONER

                   (BY SRI PRAMOD NAIR, LEARNED SENIOR COUNSEL FOR
                   SRI. HANSI ZULFIQUAR AHMED NISAR AHMED., ADVOCATE)

                   AND

                   ABB INDIA LIMITED
                   HAVING ITS OFFICE AT DISHA,
Digitally signed   3RD FLOOR, PLOT NO 5 AND 6,
by SHWETHA
RAGHAVENDRA        2ND STAGE,
Location: HIGH     PEENYA INDUSTRIAL AREA IV, PEENYA,
COURT OF           BENGALURU - 560058
KARNATAKA
                   REP BY ITS MANAGING DIRECTOR



                                                              .... RESPONDENT

(BY SRI ARUN KUMAR, LEARNED SENIOR COUNSEL FOR SRI. KEERTI KUMAR D. NAIK., ADVOCATE)

THIS CMP IS FILED UNDER SECTION 11(5) OF THE ARBITRATION AND CONCILIATION ACT, 1996 PRAYING TO APPOINT MR. TUSHAR SHAH, ADVOCATE OR ANY OTHER JUDICIAL PERSON TO

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ACT AS AN ARBITRATOR FOR THE EFFICACIOUS AND SPEEDY RESOLUTION OF THE DISPUTES BETWEEN THE PARTIES AS PROVIDED UNDER CLAUSE 16 OF THE SAID AGREEMENT DATED 28TH JUNE 2021, VIDE ANNEXURE-A AND ETC.

THIS CMP COMING ON FOR ORDERS AND HAVING BEEN RESERVED FOR ORDERS ON 21.11.2025, THIS DAY, THE COURT PRONOUNCED THE FOLLOWING:

CORAM: HON'BLE MR. JUSTICE SURAJ GOVINDARAJ

CAV ORDER

1. The Petitioner is before this Court seeking for the

following reliefs:

"1. This Hon'ble Court be pleased to appoint Mr. Tushar Shah, Advocate or any other judicial person to act as an Arbitrator for the efficacious and speedy resolution of the disputes between the parties as provided under Clause 16 of the Said Agreement dated 28th June 2021, vide Annexure-A.

2. Pass any other order that this Hon'ble Court may deem fit in the interest of justice."

2. The Respondent, being in the business of automation

technology that manufactures market transformers,

had entered into a master rental agreement dated

28.06.2021 with Translab Equipment Solution Private

Limited ('Translab' for short) for providing parking

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services/deliverables and equipment at the

Respondent's location on a rental basis as per the

terms and conditions contained in the said

Agreement, which inter alia detailed the services to

be provided by Translab. There being various

services to be provided by Translab, the Respondent

was required to make payment of the amounts as

indicated in the rental schedule to the Agreement.

3. An amended agreement came to be executed on

09.07.2021, deleting Clause 12(ii) of the original

Agreement, which provided an option to the

Respondent to terminate the Agreement at any time,

either partially or only providing 90 days' notice to

Translab. Subsequent thereto, Clause 14 of the

Agreement providing for assignment, a term sheet

came to be issued by the Petitioner to Translab,

agreeing to take over the receivables of Translab,

with the obligations of delivering service continuing

to be with Translab.

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4. The said term sheet was forwarded to the

Respondent and the Respondent had accepted the

same wherein it is categorically stated that the

Petitioner as the assignee assumes none of the

obligations of Translab and/or the supplier of the

equipment, and the Respondent would continue to

retain all its rights and remedies under the master

rental Agreement against Translab and/or the

supplier of the equipment. It is only the amounts

receivable under the master rental Agreement which

are assigned to the Petitioner.

5. Alleging that the Respondent did not make payment

of the due amount, the Petitioner invoked the

Arbitration Clause under the master rental

Agreement, in terms of Clause 16 thereof, which is

reproduced hereunder for easy reference:

"16. Governing Law & Dispute Resolution: This Agreement shall be subject to the exclusive jurisdiction of the courts at Bengaluru and is governed by the laws of India. Any dispute or difference arising out of or in connection with this

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Agreement, which cannot be settled amicably within thirty (30) calendar days from the notification of such dispute by one Party to the other Party, shall be finally settled under the Indian Arbitration and Conciliation Act, 1996 and its amendments in effect by sole arbitrator appointed mutually by parties. The place of arbitration shall be Bengaluru, India. The language of the arbitration shall be English. The final award shall be binding Parties. Parties shall fully comply and adhere with the applicable anti- corruption laws and under this Agreement."

6. A notice came to be issued on 21.02.2023, invoking

the Arbitration Clause and nominating an Arbitrator.

The said notice was replied to by the Respondent,

stating that since there are only the receivables

which were assigned, the entire Agreement not

having been assigned, the arbitration agreement

cannot be said to have been assigned, and there is

no Arbitration agreement.

7. A detailed reply was also issued on 15.03.2023

stating that Translab had not commissioned and

handed over the project; without such a handover,

bills had been raised by Translab. There is complete

non-performance on the part of Translab.

Deficiencies having been pointed out in the work of

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Translab, Translab had not rectified them. Finally,

Translab has not complied with the obligation, the

Respondent claimed that the Agreement between the

Respondent and Translab had been terminated and

as such, there was no requirement to appoint an

Arbitrator. It is in that background that the Petitioner

had approached this Court seeking the aforesaid

reliefs.

8. Notice having been issued, the Respondent has

entered appearance and filed his statement of

objections.

9. Sri Pramod Nair, learned Senior Counsel appearing

for the Petitioner, would submit that;

9.1. There being an assignment of receivables under

the Agreement and the term sheet having been

endorsed by the Respondent, the arbitration

agreement would also be binding on the parties

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and as such, the Petitioner would be entitled to

invoke the Arbitration Clause.

9.2. His submission is that the receivables being

under the master rental Agreement, the

Arbitration Clause under the master rental

Agreement would enure to the benefit of the

Petitioner even though the Respondent claims

that the Agreement with the Translab has been

terminated. In view of the amended Agreement

deleting Clause 12 (ii), there is no right vested

with the Respondent to terminate the

Agreement; that issue is a matter of fact which

should be decided by an Arbitrator.

9.3. Respondent having availed of service from

Translab, emails had been issued by the

Petitioner to the Respondent, calling upon the

Respondent to make payment of the due

amounts, the amounts not having been paid,

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there is an arbitrable dispute between the

parties, which was not amicably settled within

30 days, and as such, the Petitioner has

invoked the Arbitration Clause.

9.4. He has referred to various decisions, namely

the decision in Lifeforce Cryobank Sciences

V. Cryoviva Biotech (P) Ltd.,1 the decision in

DLF Power Ltd., V. Mangalore Refinery &

Petrochemicals Ltd.,2 the decision in

Siemens Factoring Pvt. Ltd., V. Future

Enterprises Pvt. Ltd.,3 the decision in

Bestech India (P) Ltd., V. MGF

Developments Ltd.,4 and the decision in Cox

& Kings Ltd., V. SAP India (P) Ltd.5

9.5. The sum and substance of all those decisions

which have been relied upon by Sri Pramod

2024 SCC Online SC 3215

2016 SCC Online Bom 5069

Commercial Arbitration Application.No.174/2022

2009 SCC Online Delhi 698

(2024) 4 SCC 1

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Nair, learned Senior Counsel for the Petitioner

is to urge that there being an assignment of the

Agreement, the Arbitration Clause would also

stand assigned, and therefore, the Petitioner

would be entitled to invoke the Arbitration

Clause. I am not extracting the relevant

paragraphs of judgments due to the orders that

I propose to pass, so as not to bulk the record.

10. Sri Arun Kumar, learned Senior Counsel for the

Respondent, would submit that;

10.1. The Agreement between the Respondent and

Translab has been terminated on account of

Translab not having rendered any services.

Hence, the question of making payment of any

monies would not arise.

10.2. His submission is also that, only receivables

which had been assigned, the entire Agreement

has not been assigned, and therefore, the

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Petitioner cannot claim assignment of the

Arbitration Clause to invoke it.

10.3. He relies upon the decision of the Hon'ble Apex

Court in Hindustan Petroleum Corporation

Ltd., Vs. BCL Secure PRmises Pvt. Ltd.6,

more particularly, para Nos.35 and 38 thereof,

which are reproduced hereunder for easy

reference:

"35. This does not mean that where the Referral Court finds prima facie a party is not a veritable party still the matter is left to the Arbitral Tribunal. To hold so, would relegate the Referral Court to the status of a monotonous automation. Further, to countenance such an extreme proposition would lead to disastrous consequences, where absolute strangers could walk into the Referral Court and contend that the matter has to perforce go to the Arbitral Tribunal for a decision on the veritable nature of the party. We are not prepared to accept such an extreme proposition.

38. Apart from the above, not only has the respondent not shown any consent for assignment as required under clause 3.17 of the tender document, nothing even prima facie has been shown to establish that there was any semblance of an intent to effect legal relationship between the respondent and the party originally granting the contract

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and/or to indicate that the respondent was a veritable party."

10.4. By relying on BCL Secure Premises case, his

submission is that Section 11 Court would have

to decide on whether a person is a party to an

arbitration or not, and the same cannot be left

to be decided by the Arbitral Tribunal in all the

cases. Unless there is a legal relationship which

is established, a party cannot be referred to an

arbitration.

11. Heard Sri Pramod Nair, learned Senior Counsel for

the Petitioner, Sri Arun Kumar, learned Senior

Counsel for the Respondent and perused papers.

12. This is a peculiar case and would have to be decided

on the facts of the matter. There can be no dispute

about the principles laid down in the decisions relied

upon by Sri Pramod Nair, learned Senior Counsel for

the Petitioner. Admittedly, a master rental

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agreement was entered into between Translab and

Respondent. It is only the receivables under said

Agreement which are assigned by Translab in favour

of the Petitioner. The obligations under the

Agreement for which the amounts were to be paid by

the Respondent continue to be with that of Translab

and/or the suppliers that is to say that without

performance of the obligations by Translab, there will

be no receivables required to be collected by the

Petitioner.

13. The contention of the Respondent is that the

Agreement has been terminated. The contention of

the Petitioner is that the Agreement cannot be

terminated. Be that as it may, the aspect of

continuance of the services and/or whether the

Agreement is terminable or not, cannot be for the

Petitioner to contend inasmuch as what has been

assigned is only the receivables and the service

contract continued bwtween Translab and the

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Respondent. Admittedly, Translab is not a party to

these proceedings. No notice has been issued by

Translab, nor has any action been taken by the

Petitioner along with Translab. The said conduct,

apart from being suspicious, only reinforces the

situation that the Petitioner intends to claim

payments for the works allegedly done by Translab,

when the Respondent contends that Translab has not

done those works, suffice it to say that without the

Petitioner establishing that Translab has done the

work, the question of the Petitioner claiming any

amount should not arise.

14. Translab not being a party to these proceedings, I

am of the considered opinion that in the absence of

Translab, the Petitioner cannot claim any amounts or

initiate any proceedings. More so, when the

Agreement is alleged to have been terminated by the

Respondent and Translab has not taken any action in

relation thereto.

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15. The question of the Petitioner claiming that the

Agreement cannot be terminated and continues to be

enforced is not sustainable without Trabslab

asserting that by challenging the termination, what is

to be taken into consideration is that it is only the

receivables which have been assigned to the

Petitioner, the other parts of the Agreement have not

been assigned. Without those parts of the Agreement

being performed, there would be nothing for the

Petitioner to receive by way of assignment.

16. These factors going to the root of the matter. Hence,

I am of the considered opinion that these peculiar

facts would require this Court to consider these

aspects before appointment of an Arbitrator and if

these aspects are considered, it would only result in

an irresistible conclusion that without Translab, no

arbitral proceedings can be maintained and no claim

can be made by the Petitioner. For that reason, no

arbitration notice having been issued to Translab,

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requirement of Section 21 not having been complied

with, Translab cannot be subsequently made a party

to the arbitral proceedings. As such, the invocation of

the arbitral clause only against the Respondent

without Translab being a party cannot be sustained.

In that background, I am of the opinion that no

Arbitrator can be appointed, as such, the petition

stands dismissed.

SD/-

(SURAJ GOVINDARAJ) JUDGE

KTY List No.: 2 Sl No.: 1