TMI Blog2023 (1) TMI 1352X X X X Extracts X X X X X X X X Extracts X X X X ..... ner has failed to follow the procedure as envisaged in Clause 13.4 of the Agreement which stipulates the parties to undergo a consultation before invoking arbitration. This argument also does not hold water for the simple reason that there is no specific procedure for consultation and so long as the parties were corresponding with each other about their disputes and a Notice was given for invoking arbitration, the pre-requisite of consultation is essentially met. It may be observed that it is not a case where there are no arbitrable disputes. The parties may have approached NCLT or other Forums but the scope of adjudication before each of these Fora is independent and merely because the petitioner had approached Competition Commission of India or is a corporate debtor in the proceedings before the NCLT, cannot be held to be a bar to raise the disputes for adjudication by way of arbitration. Considering that there is a valid Arbitration Agreement between the parties and in the light of the facts and discussions, Hon'ble Mr. Justice Manmohan Sarin, Retired Chief Justice (Jammu Kashmir High Court), Mobile No. 9818000210, is hereby appointed as the Sole Arbitrator to adjudicate the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... BMW vehicles outside Gujarat thereby causing irreparable loss and injury to the petitioner. The respondent No. 1 has failed to give count of the vehicles sold outside Gujarat to Gujarat customers. The respondent No. 2 is allegedly claiming to have paid the purported outstanding dues of the petitioner towards respondent No. 1 pursuant to the DPFA which allowed the petitioner to make payments for the cars sold by respondent No. 1 in a deferred manner, the financial assistance of which was agreed to be provided by respondent No. 2. 7. The petitioner has stated that the respondent No. 2 has filed an Insolvency Petition bearing No. CP(IB) No. 161/2017 in and around November, 2017 against the petitioner before the National Company Law Tribunal, Ahmedabad (hereinafter referred to as NCLT ) which was admitted on 04th June, 2020 leading to the commencement of the Corporate Insolvency Resolution Process (hereinafter referred to as 'CIRP'). 8. Since the petitioner is a corporate debtor before the NCLT, it has to be considered whether a petition under Section 11(6) of the A C Act, 1996 can be entertained when the Petitioner is under CIRP. The same was under consideration in the judgmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent Nos. 1 and 2 vide Letters dated 07th August, 2018 and 09th August, 2018 respectively have refused to refer the disputes to arbitration and the petitioner has also been making an endeavours to arrive at an amicable settlement, but all the attempts went in vain. 13. A prayer has, therefore, been made that Arbitrator be appointed to adjudicate the disputes between the parties. 14. The respondent No. 2 in its Reply has asserted that there is no pending dispute between the petitioner and the respondent No. 2 for adjudication by the Arbitral Tribunal in terms of various Agreements. It is asserted that the loans extended to the petitioner by the respondent No. 2 have already been recalled and on account of default in repayment of overdues, an Insolvency Petition has already been filed before the NCLT, Ahmedabad which is pending adjudication. 15. It is submitted that various objections had been taken by the petitioner before the NCLT, Ahmedabad, but all have been dismissed, and the petitioner has been admitted into insolvency, by observing that there was a clear admission of debts and default. Aside from this, in the petition under Section 9 of A C Act, 1996 filed by the petitioner, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r submitted that the respondent No. 2 is a licensed Non-Banking Financial Company and provides wide range of financial services/facilities to car dealers and customers. Admittedly, two Financing Facility Agreements were entered into between the petitioner and the respondent No. 2, namely, FFA dated 15th November, 2010 and the WCDFA dated 28th June, 2014. 23. It is submitted that in terms of FFA, the petitioner was given a working capital limit to be utilized in a cycle of one year as per the needs and requirements of the petitioner. 24. The scope of FFA and WCDFA were therefore, distinct and were executed on different dates. The Arbitration Clause in both the Agreements is also separate and distinct. Moreover, the Arbitration Clauses in the two Agreements between the petitioner and the respondent No. 1 and those with the respondent No. 2 are different in respect of the seat of arbitration as well as constitution of the Arbitral Tribunal. 25. It is further asserted that while the petitioner is seeking a composite referral to arbitration for adjudication of all the disputes with respondent Nos. 1 and 2 respectively, this is not permissible as there is no tripartite Agreement between ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... merit and is liable to be dismissed. 31. Written Submissions perused and Submissions heard. 32. The petitioner, Parsoli Motors Works Pvt. Ltd. has filed the present petition under Section 11 of the Arbitration Conciliation Act, 1996 for appointment of an Arbitrator in respect of four Contracts, the details of which are as under : (i) Dealership Agreement dated 14.01.2015 executed between Petitioner and Respondent No. 1; (ii) Deferred Payment Facility Agreement (DPFA) dated 15.11.2010 executed between petitioner and respondent No. 1; (iii) Floor plan Financing Agreement (FPFA) dated 15.11.2010 executed between petitioner and respondent No. 2; and (iv) Working Capital Demand Credit Facility Agreement(WCDCFA) dated 28.06.2014 executed between petitioner and respondent No. 2. 33. The Dealership Agreement dated 14th January, 2015 read with renewal letter dated 19th January, 2017 with respondent No. 1 BMW India Pvt. Ltd was essentially to sell BMW cars and its parts and to use BMW brand logo and name in the territory of Gujarat. In addition, the Deferred Payment Facility Agreement with respondent No. 1was to avail an evolving credit line in order to purchase BMW India's cars and othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the parties to appoint a sole arbitrator. (ii) The place of arbitration under the Dealership Agreement is Delhi while the place of arbitration under the Deferred Payment Facility Agreement is Gurgaon. In the two Agreements with respondent No. 2 the place of arbitration was to be determined by respondent No. 2 (iii) The Dealership Agreement requires the parties to comply with a pre-arbitral Consultation Procedure before invoking arbitration. 37. It is argued that since the mechanism and the place of arbitration has been envisaged differently under the four Agreements, they all cannot be subjected to the same procedure or to the same arbitration. In this regard it may be observed that while the Supreme Court in Indian Oil Corporation Ltd. vs. Raja Transport Pvt. Ltd. (2009) 8 SCC 520 had opined that while considering an application under Section 11(6) of the Act, the procedure for appointment of an Arbitrator as prescribed in the Agreement be given effect to and the Court ought not to appoint an independent Arbitrator without resorting to the inbuilt mechanism as agreed between the parties. Yet at the same time, the Supreme Court in Deep Trading Company vs. Indian Oil Corporation Or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice and even a non-signatory party may also be referred for arbitration. The group of Companies doctrine was invoked to bind the non-signatory affiliates if the circumstances demonstrate that the mutual intention of the parties was to bind both the signatory as well as non-signatory parties. 40. In the present case, this Court need not devolve into this aspect any further since the petitioner itself has made an alternate prayer that though one petition under Section 11 of the Act has been filed, the Arbitrator may be appointed separately for the four Agreements. 41. The respondent had also taken a connected objection that one Notice of Invocation of Arbitration dated 18thJuly, 2018 had been sent by the petition, which did not define the disputes specifically. 42. The standard of compliance under section 21 of the Act came for consideration in Prasar Bharti vs. M/s Multi Channel (India) Ltd. 2005 (Supp) Arb. LR 245, where the Notice of Invocation under Section 21 was addressed to Director General who is the appointing body, and a copy was endorsed to the respondent. It was observed that the object of giving a Notice of Invocation is essentially to put the other party to Notice that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ayed by Supreme Court of India vide Order dated 13th April, 2022 in CA No. 2721/2022. 47. In this context, it may be observed that it is not a case where there are no arbitrable disputes. The parties may have approached NCLT or other Forums but the scope of adjudication before each of these Fora is independent and merely because the petitioner had approached Competition Commission of India or is a corporate debtor in the proceedings before the NCLT, cannot be held to be a bar to raise the disputes for adjudication by way of arbitration. 48. Considering that there is a valid Arbitration Agreement between the parties and in the light of the facts and discussions, Hon'ble Mr. Justice Manmohan Sarin, Retired Chief Justice (Jammu Kashmir High Court), Mobile No. 9818000210, is hereby appointed as the Sole Arbitrator to adjudicate the disputes between the parties. 49. The parties are at liberty to raise their respective objections before the Arbitrator. 50. This is subject to the Arbitrator making necessary disclosure as under Section 12(1) of A C Act, 1996 and not being ineligible under Section 12(5) of the A C Act, 1996. 51. The fees of the learned Arbitrator would be fixed in accor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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