Madras High Court
M/S.Rms Transports vs M/S.Bharat Petroleum Corporation ... on 18 November, 2025
Author: N. Anand Venkatesh
Bench: N. Anand Venkatesh
O.A.Nos.857, 858, 859 & 860 of 2025
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 18.11.2025
CORAM
THE HONOURABLE Mr.JUSTICE N. ANAND VENKATESH
O.A.Nos.857, 858, 859 & 860 of 2025
M/s.RMS Transports
Rep. by its Proprietor Mr.M.Selvaraj
3/148-D, RMS Complex
Trichy Road, Namakkal – 637 002 .. Applicant in O.A.Nos.857 &
858/2025
M/s.KMS Transports
Rep. by its Proprietor Mr.M.Subramanian,
20/3, KMS Complex
Thuraiyur Road
Namakkal – 637 001 .. Applicant in O.A.Nos.859 &
860/2025
Vs.
M/s.Bharat Petroleum Corporation Limited,
Rep.by its Chief Manager
(LPG Logistics) – South
No.1, Ranganathan Gardens
1/12
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O.A.Nos.857, 858, 859 & 860 of 2025
th
11 Main Road, Anna Nagar (W)
Chennai – 600 040 .. Respondent in all OAs
Original Applications filed under Order XIV Rules 1 and 8 of the
O.S.Rules read with Section 9(1)(ii)(d)&(e) of the Arbitration and Conciliation
Act, 1996, praying to grant an order of interim injunction restraining the
respondent from terminating the contract, blacklisting the applicants and vehicles
and forfeit the Bank Guarantee of Rs.7,50,000/- (Rupees Seven Lakhs and Fifty
Thousand only) pursuant to the show cause notices dated 22.07.2025, 29.07.2025,
21.07.2025 & 29.07.2025, respectively, in respect of the schedule mentioned
property in Judges Summons, until the dispute between the applicant and the
respondent is resolved through arbitration.
For Applicant in all OAs : Mr.D.Vairavamoorthy
For Respondent in all OAs : Mrs.Preeti Mohan
COMMON ORDER
All these applications have been filed under Section 9 of the Arbitration
and Conciliation Act, 1996, (in short “the Act”), seeking for an interim protection.
2.When these applications came up for hearing on 26.08.2025, this Court
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passed the following order :
“These applications have been filed under Section 9 of the
Arbitration and Conciliation Act, 1996, seeking for an order of interim injunction
to restrain the respondent from terminating the contract, blacklisting the
applicants and their
vehicles, and forfeiting the bank guarantee amount, pursuant to the show cause
notices dated 22.07.2025, 29.07.2025, 21.07.2025 and 29.07.2025 respectively
issued by the respondent, until the dispute between the parties is resolved through
arbitration.
2. The applicants are the contractors with the respondent. According
to the respondent, the applicants have violated the terms and conditions of the
contract by selling their transport vehicles, which are part of the contract,
without the permission of the respondent. However, according to the applicant,
the vehicles were sold only with the consent of the respondent.
3. The learned counsel for the applicants drew the attention of this
Court to the aforesaid show cause notices issued by the respondent and would
submit that the respondent themselves have admitted in the said show cause
notices that by email dated 22.04.2025, the applicant had intimated the
respondent that they have withdrawn the vehicles disclosed in the show cause
notices for operation of the respondent's services. Therefore, according to the
applicants, the contention of the respondent in the impugned show cause notices
is incorrect.
4. The learned counsel for the applicants also submits that the
respondent has arbitrarily threatened in the show cause notices that they will
beblacklisting the vehicles belonging to the applicants from oil industry, in which
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event, the applicants will be put to irreparable loss/hardship.
5. Insofar as the interim reliefs sought for in these applications
pertaining to termination of contract and forfeiture of bank guarantee are
concerned, the said reliefs cannot be granted by this Court at an exparte stage.
Only after the respondent enters appearance and files their counter affidavit, this
Court will be in a position to decide as to whether those reliefs can be granted in
favour of the applicants or not. The only exparte relief that can be granted in
favour of the applicants in these applications is in respect of blacklisting. If
blacklisting is done, the applicants will be put to irreparable loss/hardship and
their livelihood as well as their employees livelihood will be affected as it would
amount to a drastic action taken by the respondent.
6. Since the applicants have made out a prima-facie case with regard
to blacklisting, this Court is inclined to grant an order of interim injunction and
accordingly, there shall be an order of interim injunction restraining the
respondent from blacklisting the applicants and their vehicles, which are
disclosed in the aforesaid show cause notices, until further orders. However,
insofar as the interim reliefs sought for with regard to termination of the contract
and forfeiture of bank guarantee amount are concerned, this Court at the ex parte
stage is not inclined to grant an order of interim injunction as prayed for in these
applications.
Notice to the respondent through Court as well as privately
returnable by 23.09.2025.”
3.After service of notice to the respondent Corporation, the respondent
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Corporation entered appearance and filed counter.
4.When the applications came up for hearing on 11.11.2025, it was
informed to this Court by the learned counsel for the respondent Corporation that
insofar as the issue regarding the termination of contract, the same may not
survive, in view of the fact that the respondent Corporation has engaged the
services of the applicant for a further period up to 28.02.2026. In view of this
development, the respondent Corporation also does not intend to invoke the bank
guarantee.
5.The learned counsel further submitted that, even, if the parties are
referred to the Arbitral Tribunal, it will only be the respondent Corporation, who
will be the claimant in this case. The only other issue will be the justification for
the respondent Corporation to blacklist the applicant and which has been injuncted
by this Court.
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O.A.Nos.857, 858, 859 & 860 of 2025
6.When the matter was taken up for hearing today, the relevant
arbitration clause was brought to the notice of this Court and for proper
appreciation, the same is extracted hereunder :
“39. ARBITRATION :
Any dispute or difference whatsoever arising out of or in connection
with this Agreement including any question regarding its existence, validity,
construction, interpretation, application, meaning, scope, operation or effect of
this contract or termination thereof shall be referred to and finally resoled through
arbitration as per the procedure mentioned herein below:
(a)The dispute or difference shall, in any event, be referred only to a Sole
Arbitrator
(b)The appointment and arbitration proceedings shall be conducted in accordance
with SCOPE forum of Arbitration Rules for the time being in force or
as amended from time to time
(c)The seat of arbitration shall be at Chennai
(d)The proceedings shall be conducted in English language
The cost of the proceedings shall be equally borne by the parties, unless otherwise
directed by the Sole Arbitrator.”
7.Learned counsel for the respondent Corporation submitted that the
Standard Conference Of Public Enterprises (SCOPE) is a forum which consists of
a panel of reputed arbitrators. Hence, the applicant is bound by the relevant clause
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in the agreement, where the applicant agreed for appointment and conducting of
arbitral proceedings in accordance with the SCOPE forum.
8.Per contra, learned counsel for the applicant submitted that such
unilateral forum that is prescribed by the respondent Corporation, will not bind the
applicant and hence, requested this Court to appoint a sole Arbitrator, so that the
dispute can be referred to the sole Arbitrator.
9.In the considered view of this Court, if this Court has to recognize
SCOPE forum and send the parties to that forum for enabling that forum to appoint
an Arbitrator, necessary orders must be passed by the Hon’ble Chief Justice by
recognizing SCOPE forum as an institution under Section 11(6) of the Act read
with Rule 3 of the Appointment of Arbitrator by the Chief Justice of Madras High
Court Scheme, 1996. Admittedly, this has not taken place and therefore, this Court
cannot recognize SCOPE forum and send the parties for resolving the dispute
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before the Arbitrator appointed by the said forum. Under such circumstances,
providing such a forum by the respondent will not bind the applicant, unless the
applicant agrees to go before the SCOPE forum and enable the forum to appoint an
Arbitrator to resolve the dispute. If the applicant is not agreeable to the same, such
clauses in the contract becomes impermissible, in the light of the judgment of the
Apex Court in Central Organisation for Railway Electrification Vs. ECI SPIC
SMO MCML (JV) a Joint Venture Company reported in (2025)4 SCC 641.
10.When this Court expressed its mind, the learned counsel for the
respondent Corporation submitted that this Court can appoint a sole Arbitrator and
refer the dispute between the parties. Learned counsel submitted that there are
totally two agreements between two different parties and in both cases, it will only
be the respondent Corporation, who will be the claimant. Insofar as the applicant
is concerned, they may also be claimants/counter claimants, since they have to
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necessarily challenge their blacklisting done by the respondent Corporation.
11.In view of the above, this Court appoints Mr.K.Ashok Kumar,
Advocate (E.No.56/2005), having office at Chamber No.453, Madras High
Court, Chennai 600 104 (mobile No.94449 58093, e-mail :
[email protected]) as sole Arbitrator and the sole Arbitrator is
requested to adjudicate the arbitral disputes that had arisen between the parties and
render arbitral award by holding sittings in the 'Madras High Court Arbitration
Centre under the aegis of this Court' (MHCAC) as per Madras High Court
Arbitration Proceedings Rules, 2017 and fee of the sole Arbitrator shall be in
accordance with the Madras High Court Arbitration Centre (MHCAC)
(Administrative Cost and Arbitrator's Fees) Rules, 2017.
12.The interim order already passed by this Court shall continue, till the
first sitting of the Arbitral Tribunal. Thereafter, it is left open to the parties to seek
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for continuance/modification/vacating the interim order, which will be dealt with
by the Arbitral Tribunal, in accordance with Section 17 of the Act.
All these applications are disposed of in the above terms.
18.11.2025
gya
Index : Yes/No
Neutral Citation : Yes/No
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O.A.Nos.857, 858, 859 & 860 of 2025
To
The Chief Manager
M/s.Bharat Petroleum Corporation Limited
(LPG Logistics) – South
No.1, Ranganathan Gardens
th
11 Main Road, Anna Nagar (W)
Chennai 600 040
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O.A.Nos.857, 858, 859 & 860 of 2025
N. ANAND VENKATESH, J.
gya
O.A.Nos.857, 858, 859 & 860 of 2025
18.11.2025
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