MISC. Petition No. 349 of 2024 · The High Court · 2017
Case Details
- 1 - NC: 2025:KHC:23416 CMP No. 349 of 2024 HC-KAR IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 1ST DAY OF JULY, 2025 BEFORE THE HON'BLE MR. JUSTICE ASHOK S.KINAGI CIVIL MISC. PETITION NO. 349 OF 2024 BETWEEN: 3M ELECTRO AND COMMUNICATION INDIA PVT. LTD., A COMPANY REGISTERED UNDER THE PROVISIONS OF THE COMPANIES ACT 1956, HAVING ITS REGISTERED OFFICE AT PRESENTLY AT WE WORK, PRESTIGE CENTRAL, 3RD FLOOR, 36 INFANTRY ROAD, BENGALURU - 560 001. REPRESENTED BY ITS AUTHORISED SIGNATORY MR. VIJAY SONI. (BY SRI. B PRAMOD, ADVOCATE) AND: M/S. CROSSWAYS VERTICAL SOLUTIONS PRIVATE LTD., A COMPANY REGISTERED UNDER THE, PROVISIONS OF THE COMPANIES ACT, 1956, HAVING ITS REGISTERED OFFICE AT, 411, ESSEL HOUSE, 10, ASAF ALI ROAD, NEW DELHI - 110 002. REPRESENTED BY ITS MANAGING DIRECTOR. …PETITIONER Digitally signed by SUNITHA K S Location: HIGH COURT OF KARNATAKA - 2 - NC: 2025:KHC:23416 CMP No. 349 of 2024 HC-KAR ALSO AT: CROSSWAYS VERTICAL SOLUTIONS PRIVATE LIMITED, B-01, BASEMENT, 984, POCKET C, IFC GHAZIPUR PAPER MARKET, DELHI - 110 096. ALSO AT, 405 FIE, 1ST FLOOR, OPPOSITE BAGGA LINK MOTOS, PATPARGANJ INDUSTRIAL AREA, NEW DELHI - 110 092. …RESPONDENT (SERVICE OF NOTICE TO RESPONDENT HELD SUFFICIENT VIDE ORDER DATED 06.06.2025) THIS CIVIL MISC. PETITION UNDER SECTION 11(6) OF THE ARBITRATION AND CONCILIATION ACT 1996, PRAYING TO 1. APPOINT A SOLE ARBITRATOR TO RESOLVE ALL THE DISPUTES AND DIFFERENCES BETWEEN THE PETITIONER AND THE RESPONDENT IN ACCORDANCE WITH THE ARBITRATION CLAUSE CONTAINED IN THE AGREEMENT DATED 16TH JULY 2017 ( ANNEXURE-A). THIS PETITION, COMING ON FOR ADMISSION, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:
Legal Reasoning
CORAM: HON'BLE MR. JUSTICE ASHOK S.KINAGI - 3 - NC: 2025:KHC:23416 CMP No. 349 of 2024 HC-KAR ORAL ORDER This Civil Miscellaneous Petition is filed under Section 11(6) of the Arbitration and Conciliation Act, 1996, seeking for the appointment of an Arbitrator to resolve the dispute and differences between the parties to the petition in terms of clause 15(g) contained in the agreement dated 16.05.2017 vide Annexure-A, as per the provisions of the Arbitration and Conciliation Act, 1996 and the Rules. 2. Brief facts, leading rise to the filing of this petition are as follows: The petitioner and respondent entered into an Authorized Distribution Agreement dated 16.05.2017 for Authorized Distributor, for selling, distributing, and marketing the company's “3M” brand products. The petitioner is engaged in the business of selling, and distributing products under the trade mark/name of "3M" brand products. The respondent is the Authorized Distributor of the petitioner, and was carrying out the - 4 - NC: 2025:KHC:23416 CMP No. 349 of 2024 HC-KAR business of distribution of the company's of “3M” brand products. The petitioner and the respondent entered into an Authorized Distribution Agreement dated 16.05.2017, whereby the petitioner has appointed the respondent as an Authorized Distributor. For every purchase made by the respondent from the petitioner, 60 days credit period was given to clear the invoices for the said purchase. 3. Pursuant to the agreement, the petitioner has delivered its products as per the demands of the respondent, from time to time. The petitioner has issued a notice dated 20.12.2023 vide Annexure-C whereby, the petitioner informed the respondent that he has not complied regarding the re-payment terms of the said agreement, and demanded a sum of Rs.29,69,328/- (Rupees Twenty-Nine Lakhs Sixty-Nine Thousand Three Hundred Twenty-Eight only). Though, the petitioner issued a demand notice, there was no response received from the respondent. The petitioner was constrained to issue an arbitration notice on 23.02.2024 vide Annexure-D invoking - 5 - NC: 2025:KHC:23416 CMP No. 349 of 2024 HC-KAR an arbitration clause. The respondent did not reply to the arbitration notice. Hence, this petition. 4. A Notice was issued to the respondent. Despite service of the notice, the respondent remained unrepresented. 5. Heard the arguments of learned counsel for the petitioner. 6. Learned counsel for the petitioner submits that the petitioner and the respondent entered into an Authorized Distribution Agreement dated 16.05.2017, and the petitioner delivered its products to the respondent as per its demand from time to time, and the respondent is liable to pay a sum of Rs.29,69,328/- (Rupees Twenty- Nine Lakhs Sixty-Nine Thousand Three Hundred Twenty- Eight only). Despite the petitioner's request, the respondent did not pay the amount due. The petitioner invoked the arbitration clause by issuing a notice vide Annexure-D under Section 21 of the Act of 1996. The - 6 - NC: 2025:KHC:23416 CMP No. 349 of 2024 HC-KAR respondent did not reply. Hence, he submitted that there is an arbitration clause in the Authorized Distribution Agreement, and the dispute must be resolved through arbitration. Hence, he prays to allow the petition. 7. Perused the records, and considered the submissions of the learned counsel for the petitioner. 8. The point, that arises for consideration, is follows: "Whether the petitioner has made out a ground to refer the dispute to the Arbitrator in terms of clause 15(g) contained in the Authorized Distribution Agreement dated 16.05.2017 as per the provisions of the Arbitration and Conciliation Act, 1996 and the Rules?" 9. There is no dispute regarding the execution of an Authorized Distribution Agreement dated 16.05.2017, and the petitioner has appointed the respondent as an Authorized Distributor for selling, distributing, and - 7 - NC: 2025:KHC:23416 CMP No. 349 of 2024 HC-KAR marketing the company's “3M” brand products. The petitioner delivered its products as per the demand made by the respondent, from time to time. The respondent did not pay the amount due. The petitioner issued a notice dated 20.12.2023, vide Annexure-C calling upon the respondent to pay the outstanding dues. 10. Despite the service of a notice dated 20.12.2023, the respondent did not pay the outstanding dues. The petitioner issued a notice invoking an arbitration clause. 11. Perused the Authorized Distribution Agreement dated 16.05.2017, which provides an arbitration clause i.e., clause 15(g). 12. According to clause 15(g) of the Agreement, the parties shall attempt to resolve, through good faith and consultation, disputes arising in connection with this Agreement, and such consultation shall begin promptly after a Party has delivered to another party a written - 8 - NC: 2025:KHC:23416 CMP No. 349 of 2024 HC-KAR request for such consultation. Without prejudice to the provisions hereof, in the event of any dispute, difference, conflict or question arising between the Parties hereto relating to or concerning or arising out of this Agreement, the same shall be referred to arbitration, which shall be held in English and at Bangalore. Admittedly, the petitioner has invoked an arbitration clause by issuing a notice dated 23.02.2024, vide Annexure-D, proposing the name of an arbitrator. The said arbitration notice was served on the respondent. 13. Despite service of the notice, the respondent did not reply to the arbitration notice. Admittedly, the parties to the petition have executed an Authorized Distribution Agreement dated 16.05.2017, and the dispute has arisen between the parties to the petition and the same has to be resolved through arbitration, in view of the arbitration clause in the Authorized Distribution Agreement. Thus, the petitioner has made out a ground to refer the arbitral dispute to the arbitrator. - 9 - NC: 2025:KHC:23416 CMP No. 349 of 2024 HC-KAR In view of the above discussion, I answer the point for consideration in the affirmative. 14. Accordingly, I proceed to pass the following:
Decision
ORDER 1. The Civil Miscellaneous petition is allowed. 2. Smt. Premavati Munagole, District Judge (Retired) is nominated as the sole Arbitrator to resolve the dispute between the parties to the petition, in terms of clause 15(g) of the Authorized Distribution Agreement dated 16.05.2017 as per the provisions of the Arbitration and Conciliation Act, 1996 and the Rules. 3. The office is directed to communicate this order to the learned sole Arbitrator and the Arbitration and Conciliation Centre, Bengaluru. 4. Pending applications, if any, stands disposed of. Sd/- (ASHOK S.KINAGI) JUDGE PK List No.: 1 Sl No.: 16 CT: BHK