Madras High Court

Tvs Motor Company Limited vs M/S.Ashwa Motors on 22 March, 2022

Arb.O.P (Com.Div.) No. 69 of 2022

IN THE HIGH COURT OF JUDICATURE AT MADRAS

DATED : 22.03.2022

CORAM

THE HON'BLE MR. JUSTICE M.SUNDAR

Arb.O.P (Com.Div.) No. 69 of 2022

TVS Motor Company Limited
Rep. by its Asst. General Manager- Legal K.Pradeep
Regd. Off. at "Chaitanya", No.12
Khader Nawaz Khan Road
Nungambakkam
Chennai - 600 006 ... Petitioner

Vs.

1. M/s.Ashwa Motors
A partnership firm
No.311, Ring Road
Banashankari, 3rd Stage
Bangalore - 560 085
Karnataka
2. Balachandra A Yadalam
Partner - Ashwa Motors
No.492, 1st Main Road
39th Cross Road, 8th Block
Jayanagar, Bangalore - 560 070

3.Sumana Y B
Partner - Ashwa Motors
No.492, 1st Main Road
39th Cross Road, 8th Block
Jayanagar, Bangalore - 560 070

1/8

https://www.mhc.tn.gov.in/judis
Arb.O.P (Com.Div.) No. 69 of 2022

4. Nikhil B. Yadalam
Partner - Ashwa Motors
No.492, 1st Main Road
39th Cross Road, 8th Block
Jayanagar, Bangalore - 560 070

5. Pranav B. Yadalam
Partner - Ashwa Motors
No.492, 1st Main Road
39th Cross Road, 8th Block
Jayanagar, Bangalore - 560 070 ... Respondents

Arbitration Original Petition filed under Section 11(5) of the
Arbitration and Conciliation Act, 1996 to appoint an arbitrator from the
panel of nominees suggested by the petitioner to the respondents vide notice
dated 16.12.2020, in accordance with Clause 27 of the Authorised Main
Dealership Agreement dated 01.04.2018 or such other person as deemed fit
by this Court, to adjudicate upon the disputes that have arisen between the
parties in relation to the Agreement as outlined in the Notice of Dispute
dated 28.08.2020 and letter dated 16.12.2020.

For Petitioner : Mr.N.Surya Narayanan

ORDER

Read this in conjunction with and in continuation of earlier

proceedings made by this Court on 22.02.2022 and 08.03.2022, which read

as follows:

'Proceedings made on 22.02.2022 Captioned 'Arbitration Original Petition' [hereinafter 'Arb OP' for the sake of convenience and clarity] has been presented in

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this Court on 16.11.2021 under Section 11(5) of 'The Arbitration and Conciliation Act, 1996 (Act 26 of 1996)', which shall hereinafter be referred to as 'A and C Act' for the sake of brevity.

2. Mr.Vishnu Mohan, learned counsel for petitioner who is before this Virtual Court submits that the nucleus of the captioned Arb OP is an 'agreement captioned AUTHORIZED MAIN DEALERSHIP AGREEMENT dated 01.04.2018' [hereinafter 'said agreement' for the sake of convenience and clarity]. Learned counsel submits that said agreement is between the petitioner- Company and first respondent-Firm. Learned counsel also submits that respondents 2 to 5 in the captioned Arb OP are partners in the first respondent-Firm.

3. It is further submitted that Clause Nos. 26 and 27 (at page Nos.25 and 26 of typed set of papers) of said agreement captioned 'GOVERNING LAW AND JURISDICTION' and 'DISPUTE RESOLUTION' respectively constitute the 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.

4. Learned counsel submits that said agreement ran into rough weather, disputes arose i.e., arbitrable disputes resulting in a trigger notice dated 16.12.2020 (page No.47 of typed set of papers). Adverting to track consignment record, this Court is informed that the trigger notice has been served on the noticees (respondents in captioned Arb OP) on 17.12.2020 but it did not evoke any response for 30 days necessitating the presentation of

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captioned Arb OP in this Court on 16.11.2021.

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

6. Issue notice to all five respondents returnable in a fortnight i.e., returnable by 08.03.2022. Private notice permitted. Private notice through all electronic modes of communications (subject to proof being demonstrated) also permitted.

7. List on 08.03.2022.' 'Proceedings made on 08.03.2022 Read this in conjunction with and in continuation of earlier proceedings made in the previous listing on 22.02.2022.

2. Adverting to aforementioned earlier proceedings, Mr.N.Surya Narayanan, learned counsel submits that Affidavit of Service has since been filed vide Diary No.7053. The same has been placed before this Court. Registry to show the names of served respondents in the next listing.

3. To be noted, learned counsel for petitioner submits that post notice in captioned OP, the respondents have approached the petitioner regarding the possibility of out of Court settlement and that is also being explored.

List a fortnight hence. List on 22.03.2022.'

2. Mr.N.Surya Narayanan, learned counsel for sole petitioner, adverts

to the Affidavit of Service referred to in the earlier proceedings made in the

previous listing on 08.03.2022. This Court is informed that respondents

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have not chosen to enter appearance through any counsel. There is no

representation either. This means that the respondents have not chosen to

come before this Court and dispute the existence of arbitration agreement.

3. Captioned Arb.OP being a petition under Section 11 of 'The

Arbitration and Conciliation Act, 1996 (Act No.26 of 1996)' which shall

hereinafter be referred to as 'A and C Act' for the sake of brevity, legal

perimeter is largely drawn by sub-section (6A) thereat. This is Mayavati

Trading principle being ratio laid down by Hon'ble Supreme Court in

Mayavati Trading Private Limited Vs. Pradyuat Deb Burman reported in

(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

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judgment in Duro Felguera SA.' (underlining made by this Court to supply emphasis and highlight)

4. The above takes us to Duro Felguera principle i.e., ratio in Duro

Felguera, S.A. versus Gangavaram Port Limited reported in (2017) 9

SCC 729 relevant paragraphs in Duro Felguera case law are paragraphs 47

and 59, which 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.' '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

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this intention as incorporated in Section 11 (6A) ought to be respected. '

5. As the respondents have not chosen to come before this Court and

dispute the existence of arbitration agreement, this Court proceeds to

dispose of captioned Arb.OP by appointing Mr.Suhrith Parthasarathy,

Advocate, having address for service at No.1, Jagathambal Colony, 2nd

Street, Royapettah, Chennai- 600 014 [Mob: 89397 17592, E-mail:

[email protected]] as sole arbitrator. Learned sole Arbitrator is requested

to enter upon reference, adjudicate qua the arbitrable disputes that have

arisen between the petitioner and respondents from and out of / touching

upon said agreement i.e., AUTHORIZED MAIN DEALERSHIP

AGREEMENT dated 01.04.2018 . The learned Arbitrator shall hold sittings

in the Madras High Court Arbitration and Conciliation Centre under the

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

Arbitration Proceedings Rules 2017 and the fee of the learned Arbitrator

shall be governed by Madras High Court Arbitration Centre (MHCAC)

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

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M.SUNDAR.J.,

gpa

6. Captioned Arb OP is disposed of in the aforesaid manner. There

shall be no order as to costs.

22.03.2022

Speaking/Non-speaking order Index : Yes / No gpa

Note:

The Registry is directed to communicate this order forthwith to

1. Mr.Suhrith Parthasarathy, No.1, Jagathambal Colony, 2nd Street, Royapettah, Chennai- 600 014 Mob: 89397 17592, E-mail: [email protected]

2. The Director Tamil Nadu Mediation Conciliation Centre

-cum- Ex-Officio Member Madras High Court, Arbitration Centre Chennai - 104.