Madras High Court

Varalakshmi Food Rep. By Its vs Aasife Biriyani Private Limited on 21 April, 2022

                                                          1

                                  IN THE HIGH COURT OF JUDICATURE AT MADRAS

                                                   DATE: 21.04.2022

                                                        CORAM

                                    THE HONOURABLE MR.JUSTICE M.SUNDAR

                                        Arb. O.P. (Com.Div.) No.131 of 2022


                     Varalakshmi Food rep. by its
                     Sole Proprietor
                     No.109/5B, 109/8C,
                     Monasakthi Nagar,
                     Pallipetai Village and Panchayat,
                     Maduranthagam Taluk,
                     Kancheepuram - 603 301.                                   ... Petitioner

                                                         Vs.

                     Aasife Biriyani Private Limited,
                     GLRS No.325, Door No.11/3Q,
                     Railway Station Road,
                     Azharkhana, Alandur, Chennai - 16.                       ... Respondent



                                  Petition filed under Section 11(5) of The Arbitration and
                     Conciliation Act, 1996 praying to appoint an arbitrator in terms of the
                     agreement dated 29.04.2018 to render an award by adjudicating upon
                     the disputes that have arisen between the petitioner and the
                     respondent.


                                  For Petitioner    : Ms.Pooja Jain

                                  For Respondent    : Mr.Ramesh Ganapathy
                                                      for M/s.Mission Legal (Law Firm)




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                                                                       2

                                                                  ORDER

This order will now dispose of captioned Arb OP.

2. This order has to be read in conjunction with and in

continuation of proceedings made by this Court in the first listing of the

captioned matter on 23.03.2022. The proceedings made on

23.03.2022 reads as follows:

Captioned 'Arbitration Original Petition' [hereinafter 'Arb OP' for the sake of convenience and clarity] has been presented in this Court on 17.04.2021 inter alia under Section 11(5) of 'The Arbitration and Conciliation Act, 1996 (Act No.26 of 1996)' [hereinafter 'A and C Act' for the sake of convenience and clarity].

2. Mr.Karthick Viswanath .G, learned counsel of M/s.Giridhar & Sai (Law Firm) on record for sole petitioner submits that the captioned Arb OP is predicated on clauses 10 and 11 captioned 'GOVERNING LAW' AND 'RESOLUTION OF DISPUTES' respectively in an agreement dated 29.04.2018 captioned 'FRANCHISEE AGREEMENT'. To be noted, this agreement dated 29.04.2018 shall hereinafter be referred to as 'primary contract' for the sake of convenience and clarity.

3. Aforementioned clauses 10 and 11 in primary contract read as follows:

'10) GOVERNING LAW

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This agreement shall be governed by the prevailing applicable laws of India and the jurisdiction for this agreement shall be High Court, Chennai, India.

11) RESOLUTION OF DISPUTES Any dispute, claim or difference that may arise between the parties hereto in regard to this agreement the carrying out of its terms and conditions and/or the interpretation thereof in any way whatsoever, shall be referred to the arbitration of a sole arbitrator, who shall be appointed by the Honourable Chief Justice by filing a petition under Section 11(5) of the Arbitration and Conciliation Act, 1996 the venue of arbitration shall be at Chennai. The award of arbitral tribunal shall be final and binding on both the parties. The arbitration shall be governed by the provisions of the Arbitration and Conciliation Act 1996 or its statutory modification in force for the time being.'

4. Learned counsel submits that the aforementioned clauses 10 and 11 in primary contract serve as arbitration agreement between the parties i.e., arbitration agreement within the meaning of Section 2(1)(b) read with Section 7 of A and C Act.

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5. Learned counsel points out that the petitioner and respondent in the captioned Arb OP are contracting parties qua primary contract. It is submitted that arbitrable disputes erupted between the petitioner and respondent qua primary contract leading to exchange of correspondence. Learned counsel submits that a procedure has been agreed for nomination of arbitrator qua arbitration agreement and procedure itself is approaching this Court under Section 11(5) of A and C Act and therefore, captioned Arb OP has been presented in this Court.

6. Prima facie case made out for issue of notice.

7. Issue notice to respondent returnable in a fortnight i.e., returnable by 06.04.2022. Private notice permitted.

8. List on 06.04.2022.

3. Thereafter, there were two listings on 06.04.2022 and on

18.04.2022 but it is not necessary to extract and reproduce those

proceedings as they are more procedural in nature.

4. The aforementioned 23.03.2022 proceedings shall be read

as an integral part and parcel of this order.

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5. The short forms and abbreviations used in 23.03.2022

proceedings shall continue to be used in the instant order also for the

sake of convenience and clarity.

6. In the hearing today, Ms.Pooja Jain of M/s.Giridhar and Sai

Associates (Law Firm) on behalf of sole petitioner and Mr.Ramesh

Ganapathy of M/s.Mission Legal (Law Firm) on behalf of lone

respondent are before this Court.

7. Both learned counsel submit that the crux and gravamen

of the matter has been correctly captured in the aforementioned

23.03.2022 proceedings i.e., crux and gravamen qua the issue and the

trajectory the matter has taken.

8. A legal drill under Section 11 of 'The Arbitration and

Conciliation Act, 1996 (Act No.26 of 1996)' [hereinafter 'A and C Act'

for the sake of convenience and clarity] has to be performed within the

legal landscape sketched by the statutory perimeter qua sub-section

(6A) of Section 11. This principle has been laid down by Hon'ble

Supreme Court in the oft-quoted Mayavati Trading case law i.e.,

Mayavati Trading Pvt. Ltd., Vs. Pradyuat Deb Burman reported in

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(2019) 8 SCC 714. Relevant paragraph in Mayavati Trading case

law is Paragraph 10 and the same reads as follows:

'10. This being the position, it is clear that the law prior to the 2015 Amendment that has been laid down by this Court, which would have included going into whether accord and satisfaction has taken place, has now been legislatively overruled. This being the position, it is difficult to agree with the reasoning contained in the aforesaid judgments, as Section 11(6-A) is confined to the examination of the existence of an arbitration agreement and is to be understood in the narrow sense as has been laid down in the judgment in Duro Felguera SA.'

9. Aforementioned paragraph 10 of Mayavati Trading case

law takes this Court to Duro Felguera case law i.e., Duro Felguera

Vs. Gangavaram Port Ltd., reported in (2017) 9 SCC 729, relevant

paragraphs in Duro Felguera are paragraphs 47, 59 and the same

read as follows:

'47. What is the effects of the change introduced by the Arbitration and Conciliation (Amendment) Act, 2015 (hereinafter referred to as 'the 2015 Amendment' ) with particular reference to Section 11(6) and the newly added Section 11(6-A) of the Arbitration and Conciliation Act, 1996, (hereinafter referred to as “the 1996 Act”) is the crucial question arising for consideration in this case.'

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'59. The scope of the power under Section 11 (6) of the 1996 Act was considerably wide in view of the decisions in SBP and Co. (supra) and Boghara Polyfab (supra). This position continued till the amendment brought about in 2015. After the amendment, all that the Courts need to see is whether an arbitration agreement exists - nothing more, nothing less. The legislative policy and purpose is essentially to minimize the Court’s intervention at the stage of appointing the arbitrator and this intention as incorporated in Section 11 (6A) ought to be respected. '

10. Though there is serious disputation, contestation between

the petitioner and respondent regarding the arbitrable disputes that

have arisen, there is no disputation or disagreement about the

existence of the arbitration agreement. Therefore, this Court proceeds

to appoint a sole arbitrator.

11. Ms.Gladys Rosette C.Daniel, Advocate, III Floor, YMCA

Building, No.223, NSC Bose Road, Chennai - 600 001 (Mobile

No.9789980909) is appointed as sole arbitrator. Learned sole

arbitrator is requested to enter upon reference, adjudicate the disputes

that have arisen between petitioner and respondent qua primary

contract (franchise agreement dated 29.04.2018). The arbitration shall

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be conducted in the Arbitration and Conciliation Centre under the aegis

of this Court (MHCAC) in accordance with the Madras High Court

Arbitration Proceedings Rules, 2017 and Hon'ble Arbitrator's fee shall

be as per Madras High Court Arbitration Centre (MHCAC)

(Administrative Cost and Arbitrator's Fees), Rules 2017.

12. Captioned Arb OP is disposed of in the aforesaid manner.

There shall be no order as to costs.

21.04.2022

mmi/nsa

P.S.: Registry to communicate a copy of this order to

1. Ms.Gladys Rosette C.Daniel, Advocate, III Floor, YMCA Building, No.223, NSC Bose Road, Chennai - 600 001.

2. The Director, Tamil Nadu Mediation and Conciliation Centre, cum-Ex Officio Member Madras High Court Arbitration Centre, Madras High Court, Chennai-600 104.

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M.SUNDAR,J.,

mmi

Arb. O.P. (Com.Div.) No.131 of 2022

21.04.2022

https://www.mhc.tn.gov.in/judis