IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE K.P.BALACHANDRAN FRIDAY, THE 9TH JANUARY 2009 / 19TH POUSHA 1930 WP(C).No.35351 of 2008 (H) --------------------------------- PETITIONER: --------------- LEENA JOSE, W/O JOSE THOMAS, RESIDING AT G 245,PANAMPILLY NAGAR, KOCHI-682036. BY ADV. SRI.G.HARIHARAN SRI.PRAVEEN.H. RESPONDENTS: ------------------ 1. M/S STABLE MAGNET WIRE PRIVATE LTD, PLOT NO.4, COCHIN SPECIAL ECONOMIC ZONE, KOCHI-682037. 2. M/S ELMAG WIRES PRIVATE LTD,11/837, CHEMICAL INDUSTRIAL ESTATE, AROOR 688 534. 3. M/S SOLVAR WIRES PRIVATE LTD, (FORMERLY SOUTHERN ELECTROMAG PRIVATE LIMITED)11/538, CHEMICAL INDUSTRIAL ESTATE, AROOR-688534. 4. MR.JOSE THOMAS, RESIDING AT G 245, PANAMPILLY NAGAR, KOCHI-682036. 5. MR.JIMMY JOSE, RESIDING AT G 245, PANAMPILLY NAGAR, KOCHI-682036. 6. MR.BOBBY JOSE, RESIDING AT G 245, PANAMPILLY NAGAR, KOCHI-682036. ADV. SRI.JOSEPH KODIANTHARA FOR R1 SRI.MATHEWS K.UTHUPPACHAN FOR R1 SRI.TERRY V.JAMES FOR R1 SRI.SREEJITH S.NAIR FOR R2,3,5,6 THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 09/01/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No.35351 of 2008 (H) APPENDIX PETITIONER'S EXTS:- EXT.P1:- TRUE COPY OF THE AGREEMENT DT.30/03/07 BETWEEN THE FIRST RESPONDENT AND 2ND RESPONDENT. EXT.P2:- TRUE COPY OF LETTER DT.09/06/08 SENT BY THE FIRST RESPONDENT TO THE PETITIONER AND RESPONDENTS 2 TO 6. EXT.P3:- TRUE COPY OF THE COMMUNICATION DT.18/06/08 SENT BY THE 5TH RESPONDENT ON BEHALF OF RESPONDENTS 2 TO 6 ADDRESSING THE 1ST RESPONDENT. EXT.P4:- TRUE COPY OF THE COMMUNICATION DT.03/07/08. EXT.P5:- TRUE COPY OF THE COMMUNICATION DT.22/07/08. EXT.P6:- TRUE COPY OF COMMUNICATION DT.08/08/08. EXT.P7:- TRUE COPY OF THE COMMUNICATION DT.18/08/08. EXT.P8:- TRUE COPY OF THE CLAIM STATEMENT FILED BY THE FIRST RESPONDENT BEFORE THE ARBITRAL TRIBUNAL. RESPONDENTS' EXT:- R1(A):- TRUE COPY OF JUDGMENT DT.09/06/08 PASSED BY THIS HON. COURT IN ARB. APPEAL NO.13/08. ................... K.P.BALACHANDRAN, J. ------------------------------------------------ W. P. C. No.35351 of 2008 ------------------------------------------------ Dated this the 9th day of January, 2009 JUDGMENT Heard counsel on both sides. 2. The petitioner is the wife of the fourth respondent and mother of respondents 5 and 6 in this Writ Petition. According to her, though she was a Director in the second and third respondent companies, she has now ceased to be Director and arbitration under the provisions of Arbitration and Conciliation Act, 1996 is in full violation of principles of natural justice and in violation of the terms of arbitration agreement as it is in violation of the covenants between the parties inasmuch as the precondition of friendly consultation before arbitration has not been complied with. It is further contended that the petitioner has never agreed to the appointment of arbitrators and she is being W. P. C. No.35351 of 2008 -2- compelled to subject herself for arbitration. She has therefore, prayed for an order restraining respondents 1 and 2 from proceeding with arbitration unless the pre- condition in clause 27 of Ext.P1 agreement which provides for friendly consultation before arbitration is exhausted between the parties. 3. It is pointed out by the counsel for the first respondent that as no friendly consultation was possible the first respondent had to approach the District Court, Ernakulam filing O.P.421/08 for an order of injunction restraining the petitioner, her husband and her sons from continuing with a similar business started by them so as to compete with the business of the first respondent which they have taken over from the petitioner and the other Directors of the company; that the injunction order granted by the District Court W. P. C. No.35351 of 2008 -3- was assailed by the Directors of the company Solvar Wires Pvt. Ltd. including the petitioner in arbitration Appeal No.13/08; that a Division Bench of this Court vide judgment in Arbitration Appeal No.13/08 ordered that the appellants therein can do the business engaging in the manufacture and sale of products in domestic markets other than export or deemed export sales; that even in such sale they shall not have their products resembling to their trade names mentioned in clause 15.1.2 of the agreement and that the interim order as aforesaid will automatically be vacated if the arbitration proceedings are not initiated within two months from the date of the said order namely 9th June, 2008. The proceedings which started before the District Court by filing O.P.421/08 and which culminated in the judgment passed by the Division Bench of this Court in Arbitration W. P. C. No.35351 of 2008 -4- Appeal No.13/08 produced by the first respondent as Ext.R1(a) show that the possibilities of all friendly consultation was over and vide R1 judgment this Court passed an interim order which was to be in force only for a period of two months within which arbitration was to commence. In view of the said order, arbitration which has commenced cannot be found fault with and the contention of the petitioner who is bound by Ext.R1 judgment cannot be countenanced at this stage so as to stay the proceedings before the Arbitrator. 4. It is worthy to note that she was also a party to take up the matter in the Arbitration Appeal before the Division Bench and the petitioner has no explanation as to why if she has ceased to be a Director of the Company, she joined with her husband and her sons to prosecute the matter filing W. P. C. No.35351 of 2008 -5- Arbitration Appeal No.13/08. 5. This Writ Petition in the circumstances, is devoid of merit and is dismissed. K.P.BALACHANDRAN, JUDGE kns/-