Bharat Petroleum Corporation Ltd vs K.K.Vilasini Amma
2021 Latest Caselaw 13187 Ker

               IN THE HIGH COURT OF KERALA AT ERNAKULAM
                                 PRESENT
            THE HONOURABLE MR. JUSTICE DEVAN RAMACHANDRAN
        THURSDAY, THE 24TH DAY OF JUNE 2021 / 3RD ASHADHA, 1943
                           AR NO. 6 OF 2020
PETITIONER:

            M/S.BHARAT PETROLEUM CORPORATION LTD.,
            HAVING ITS REGISTERED OFFICE AT MUMBAI AND HAVING ITS
            TERRITORY OFFICE AT KOCHI LPG - TERRITORY OFFICE
            AMBALAMUGAL, COCHIN-682302, REPRESENTED BY ITS
            TERRITORY MANAGER (LPG)

            BY ADVS.
            M.GOPIKRISHNAN NAMBIAR
            SRI.K.JOHN MATHAI
            SRI.JOSON MANAVALAN
            SRI.KURYAN THOMAS
            SRI.PAULOSE C. ABRAHAM
            SMT.ANN MARIA FRANCIS


RESPONDENTS:

    1       SMT.K.K.VILASINI AMMA,
            PROPRIETOR, M/S.SINI AGENCIES, 27/2574/L, 1ST FLOOR,
            ST.JOSEPH BUILDING VUVAJANASAMAJAM ROAD, KADAVANTHRA,
            KOCHI-682020.

    2       M/S.SINI AGENCIES,
            27/2574/L, 1ST FLOOR, ST.JOSEPH BUILDING, YUVAJANA
            SAMAJAM ROAD, KADAVANTRA, KOCHI-682020,
            REPRESENTED BY SMT.K.K.VILASINI AMMA PROPRIETOR.

            BY ADVS.
            SRI.B.ASHOK SHENOY
            SMT.C.G.PREETHA
            SRI.P.S.GIREESH
            SRI.RIYAL DEVASSY
            SRI.ARJUN R NAIK

THIS ARBITRATION REQUEST HAVING COME UP FOR ADMISSION               ON
24.06.2021, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:
 AR NO. 6 OF 2020
                                   -2-

                                ORDER

Dated this the 24th day of June, 2021

M/s.Bharath Petroleum Corporation Limited

('BPCL' for short), which is a company

incorporated under the provisions of the Indian

Companies Act, 1956, has filed this request

praying that a competent Arbitrator be appointed

by this Court, under the provisions of Section 11

of the Arbitration and Conciliation Act, 1996, for

resolution of the disputes arisen between them and

the respondents.

2. According to the petitioner, Annexure-A

agreement had been entered into with the

respondents and that on account of various

misdemeanors on the part of the latter, large

amounts of money have been lost to them. They say

that they, therefore, notified the respondents of

their liability through Annexure-J, specifically

indicating of the intention to initiate action AR NO. 6 OF 2020

under the Arbitration and Conciliation Act, 1996,

but that respondents have chosen not to respond to

the said notice in any manner. The petitioner,

therefore, submits that they have no other option

but to approach this Court, invoking Clause 38(a)

of Annexure-A agreement, for appointment of a sole

Arbitrator.

3. I have heard Smt.Ann Maria Francis -

learned Standing Counsel appearing for the

petitioner and Sri.Ashok Shenoy appearing on

behalf of the respondents.

4. Smt.Ann Maria Francis submitted that even

though Clause 38(a) of Annexure-A provides that

sole Arbitrator shall be the Director (Marketing)

of the petitioner or a person to be nominated by

the Director (Marketing), her client is not

insisting on the same because they are aware that

position of law has not been altered on account of

the subsequent amendments to the Arbitration and AR NO. 6 OF 2020

Conciliation Act. She submitted that, therefore,

her client beseeches this Court to appoint a

competent Arbitrator on the strength of the said

Clause.

5. Sri.Ashok Shenoy - learned counsel

appearing for the respondents, submitted that

since Clause 38(a) of Annexure-A agreement

provides that only the Director (Marketing) of the

petitioner - Corporation or a person nominated by

the Director (Marketing) shall be the sole

Arbitrator, said Clause looses its forensic worth,

going by the judgments of the Hon'ble Supreme

Court in Newton Engineering and Chemicals Ltd. v.

Indian Oil Corporation Ltd. and Others [2013 (4)

SCC 44] and TRF Ltd. v. Energo Engineering

Projects Ltd. [2017 (8) SCC 377]. He submitted

that, when the Clause provides that only a

particular person can be appointed as the sole

Arbitrator, and when such person is interested AR NO. 6 OF 2020

with the cause impelled, it ceases to have effect

in view of the declarations of the Hon'ble Supreme

Court. He thus argues that this Arbitration

Request is not maintainable.

6. After contending as afore, Sri.Ashok

Shenoy conceded that, since Clause 38(a) of

Annexure-A provides for the mechanism of

arbitration for resolution of the disputes between

the parties, his client does not stand in the way

of a suitable Arbitrator being appointed by this

Court, provided his clients are given liberty to

raise these issues also before the said Authority.

He added to his submissions by saying that there

is an adscititious issue involved, namely that

petitioner has not invoked Clause 38(a) of the

agreement in the manner as it is contractually

prescribed. He, therefore, pleaded that if this

Court is inclined to appoint a sole Arbitrator,

the issue relating to the manner of working Clause AR NO. 6 OF 2020

38(a)of Annexure-A be also left open.

7. In reply, Smt.Ann Maria Francis - learned

Standing Counsel appearing for the petitioner,

submitted that even going by the judgments afore

cited by the respondents, Clause 38(a) of

Annexure-A agreement does not loose its legal

standing, though it may be possible for the

respondents to assert that the person named

therein cannot be appointed as the Arbitrator. She

argued that merely because a particular officer of

the petitioner - Company has been designated as

the sole Arbitrator - which has, in fact, been

done before the amendment to the Arbitration Act

had come into force - the respondents cannot

maintain that the arbitration Clause itself is

rendered otiose. She, therefore, reiteratingly

prayed that this Arbitration Request be allowed.

8. When I evaluate the afore dialectical

submissions made on behalf of the rival parties, AR NO. 6 OF 2020

it is apodictic that there is hardly any contest

between them that disputes are required to be

resolved. The only contention of the respondents

is that Clause 38(a) of Annexure-A agreement is no

longer legally standing and that initiation of

arbitration has not been properly done by the

petitioner.

9. The afore issues are certainly those which

can be raised by the rival parties before the

Arbitrator himself; and, in any event of the

matter, as I have already indicated above, the

only request of the respondents is that such

issues be also left open to be decided and

evaluated by the Arbitrator appropriately.

10. It is, therefore, indubitable that

the parties are not in dissonance with respect to

the appointment of an Arbitrator, but only as to

the aspects which he must consider. This presents

no difficulty to this Court because, the afore AR NO. 6 OF 2020

issues projected by the respondents can also be

considered by the Arbitrator and order that it be

so done, for which they are left open to be

pursued appropriately.

In summation:

(a) I nominate "Sri.Antony P.S., Retired

District Judge, Pazhampilly House, Near Thottiyil

Temple, Padamugal, Kakkanad P.O., Kochi-682 030."

as the sole Arbitrator to adjudicate and resolve

the disputes and differences between the parties

to this case arising from Annexure-A agreement.

(b) The Registry is directed to communicate

a copy of this order to the learned Arbitrator

within a period of one week from today and to

obtain a Statement of Disclosure from him/her

under Section 11(8) read with Section 12(1) of the

Arbitration and Conciliation Act, 1996.

(c) Once the Disclosure Statement is

obtained from the learned Arbitrator, the Registry AR NO. 6 OF 2020

shall release the certified copy of this order,

with a copy of the said statement appended to it,

retaining the original of the same on the files of

this case.

(d) The fees of the Arbitrator shall be

governed by the fourth Schedule of the Arbitration

and Conciliation Act, 1996.

(e) The parties to this case are ad idem

that they will share the arbitration costs and

fees equally and it is so recorded.

(f) In order to enable the Arbitrator to

commence the proceedings without delay, I direct

the parties to mark appearance before him/her at

10 A.M. on 15.07.2021.

This Arbitration Request is thus allowed.

Sd/-

DEVAN RAMACHANDRAN JUDGE akv AR NO. 6 OF 2020

APPENDIX OF AR 6/2020

PETITIONER'S/S ANNEXURES

ANNEXURE A TRUE COPY OF THE DISTRIBUTORSHIP AGREEMENT DATED 03.01.2011 ENTERED INTO BETWEEN THE PETITIONER AND THE RESPONDENTS

ANNEXURE B TRUE COPY OF THE OFFICE COPY OF THE SHOW-

CAUSE NOTICE DATED 6.11.2014 ISSUED BY THE PETITIONER TO THE RESPONDENTS

ANNEXURE C TRUE COPY OF THE SPEAKING ORDER ISSUED ON 23.05.2015 ISSUED BY THE PETITIONER TO THE RESPONDENTS

ANNEXURE D TRUE COPY OF THE LETTER DATED 25.09.2015 SENT BY THE RESPONDENTS REQUESTING THE PETITIONERS TO TRANSFER THEIR CUSTOMERS TO NEIGHBOURING DISTRIBUTORSHIP

ANNEXURE E TRUE COPY OF THE RESIGNATION LETTER DATED 02.04.2016

ANNEXURE F TRUE COPY OF THE LETTER ISSUED BY THE PETITIONER COMMUNICATING SHORTAGE OF EQUIPMENTS AND IMPOSING A PENALTY OF RS.24,35,100/- DATED 29.11.2016

ANNEXURE G TRUE COPY OF THE DETAILS OF THE DUES PAYABLE BY THE RESPONDENTS TO THE PETITIONER DATED 01.12.2016

ANNEXURE H TRUE COPY OF THE LETTER DATED 15.12.2016 SENT BY THE RESPONDENT TO THE PETITIONER

ANNEXURE I A TRUE COPY OF THE COMMUNICATION DATED 15.12.2016 ISSUED BY THE PETITIONER TO THE RESPONDENT

ANNEXURE J TRUE COPY OF THE LETTER DATED 22.08.2019 ISSUED BY THE PETITIONER TO THE RESPONDENTS