THE HON’BLE SRI JUSTICE B.SESHASAYANA REDDY Arbitration Application No.90 of 2011 Date:20th December, 2011 Between: HLL Life Care Limited (formerly known as Hindustan Latex Limited), a company incorporated under the provisions of the Companies Act, 1956, having its registered office at Thiruvanthapuram, Kerala and Regional Office at # 3-5-816, Veenadhari Apartments, 4th Floor, Kong Kothi, Hyderabad, Rep. by its Company Secretary & Sr.Vice President (CAS) Mr.V.A.Sasidharan Nair. …Applicant A n d Andhra Pradesh State Aids Control Society, rep. by its Project Director, District Medical and Health Services Campus, Sultan Bazar, Kothi, Hyderabad. …Respondent *** THE HON’BLE SRI JUSTICE B.SESHASAYANA REDDY Arbitration Application No.90 of 2011 ORDER: This Arbitration Application has been taken out by HLL Life Care Limited under sub-sections (5) and (6) of Section 11 of the Arbitration and Conciliation Act, 1996, (for short, “the Act”), r/w.Para.3(i)[c] of Scheme for Appointment of Arbitrators, 1996, seeking appointment of an arbitrator for resolution of the disputes between the parties relatable to the Memorandum of Understanding, dated 01.09.2005. 2. Facts of the case, in brief, are: The applicant is engaged in multi diversified products in health care and manufacture and sale of contraceptives and Contraceptives Vending Machines. The respondent approached the applicant for installation of 500 Condom Vending Machines (CVMs) to be installed and maintained including refilling for social marketing at various places across Hyderabad and Secunderabad City. A Memorandum of Understanding, came to be entered into between the applicant and the respondent, on 01.09.2005, whereunder, the applicant was required to install and maintain 500 CVMs for a period of 3 years commencing from 01.09.2005 to 31.08.2008. The respondent agreed to pay 50% of the annual rent at the beginning of each year and the balance 50% of the annual rent at the end of the year. The respondent became due an amount of Rs.8,74,667/- as on 30.08.2008. The applicant issued a legal notice, dated 12.01.2010, calling upon the respondent to pay the outstanding amount of Rs.8,74,667/-. The respondent issued a reply stating that 50% balance amount for the remaining period from April, 2007 to September, 2008 has been stopped due to allegations of non- functioning of CVMs. The applicant issued reply denying the allegations. The respondent also failed to pay the charges for the period from October, 2008 to May, 2009, total Rs.3,40,278/-. The applicant has to get Rs.8,74,667/- + Rs.3,40,278/-, totaling to Rs.12,14,945/-. Thereby disputes arose between the applicant and the respondent. As per Clause 6 of the Memorandum of Understanding, dated 01.09.2005, disputes are required to be settled by taking recourse to the Act. The applicant invoked the arbitration clause in the Memorandum of Understanding and requested the respondent to refer the claims to the arbitrator. Hence, this application. 3. The respondent filed counter-affidavit disputing the claim of the applicant. However, existence of arbitration clause in the Memorandum of Understanding is not disputed. 4. Heard learned counsel appearing for the applicant and learned Government Pleader for Arbitration appearing for the respondent. 5. It is not in dispute that the applicant made a claim of Rs.12,14,945/- and the said claim has been repudiated by the respondent. It can be said that the disputes have arisen between the applicant and the respondent relatable to the Memorandum of Understanding, dated 01.09.2005. As per Clause 6 of the Memorandum of Understanding, disputes between the parties are required to be settled by taking recourse to the Act. Whatever defence the respondent has, it is at liberty to put forth the same before the Arbitrator. Since the existence of arbitration clause is not disputed by the respondent, rightly so, there cannot be any impediment in appointing the arbitrator for resolution of the disputes between the applicant and the respondent relatable to the Memorandum of Understanding, dated 01.09.2005. 6. Accordingly, the Arbitration Application is allowed. Sri C.Subbarami Reddy, Retd. District Judge, is appointed as an arbitrator for resolution of the disputes between the applicant and the respondent, relatable to the Memorandum of Understanding, dated 01.09.2005. He shall fix his own fee. No order as to costs. ______________________ B.SESHASAYANA REDDY, J. Date:20th December, 2011. cs THE HON’BLE SRI JUSTICE B.SESHASAYANA REDDY Arbitration Application No.90 of 2011 Date:20th December, 2011