IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE S.SIRI JAGAN FRIDAY, THE 4TH NOVEMBER 2011 / 13TH KARTHIKA 1933 AR.No. 15 of 2011() ------------------------ (S) APPLICANTS: ------------------------ 1. BINOJ JOSEPH, AGED 30 YEARS, S/O. P.S.JOSEPH, POOMALA CABLE VISION, MUNDOOR, PULIYAMAKKAL HOUSE, P.O.POOMALA, THRISSUR-680 581. 2. SIVAN A., AGED 35 YEARS, S/O. PARAMESWARAN NAIR, SAGAR CABLE VISION, VARADIYAM ATHAMKAVIL HOUSE, P.O.PERAMANGALAM, THRISSUR-680 545. 3. SASEENDRAN.A, AGED 38 YEARS, S/O. PARAMESWARAN NAIR, ATHIRA CABLE NETWORK, VARADIYAM ATHAMKAVIL HOUSE, P.O.PERAMANGALAM, THRISSUR-680 545. 4. CHANDRAN P.K., AGED 40 YEARS, S/O. RAMAN, FRIENDS CABLE TV NETWORK, KANNAMKUMARETH HOUSE, P.O.PERAMANGALAM, THRISSUR-680 545. 5. JAYARAJ A., AGED 41 YEARS, S/O. KALAMANDALAM GOPI, MUNDOOR CABLE TV NETWORK, GURUKRIPA HOUSE, P.O.PERAMANGALAM. BY ADVS. SRI.P.RADHAKRISHNAN SRI.MADHU RADHAKRISHNAN. RESPONDENT(S): OPPOSITE PARTY/RESPONDENT ------------------------------------------------------------------------ KERALA VISION LTD., I/I J, KRISHNA BUILDING, VILVATTOM PANCHAYAT, VIYYUR VILLAGE, THRISSUR, REPRESENTED BY ITS MANAGING DIRECTOR. ADV. SRI.K.S.BHARATHAN THIS ARBITRATION REQUEST HAVING BEEN FINALLY HEARD ON 04/11/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: STU AR.No. 15 of 2011 APPENDIX PETITIONER'S ANNEXURES: A1 : COPY OF THE INTERIM ORDER ARBITRATION O.P.394/2010. A2 : COPY OF THE JUDGMENT IN ARBITRATION APPEAL 1/2008 DTD 22/01/2008. A3 : MEMORANDUM AND ARTICLES OF ASSOCIATION CONTAINING THE ARBITRATION CLAUSE. A4 : COPY OF THE REGISTERED LETTER DTD 13/09/2010. RESPONDENT'S ANNEXURES: R1 : COPY OF THE MINUTES OF THE ANNUAL GENERAL BODY MEETING OF THE RESPONDENT COMPANY WHICH WAS HELD ON 15/09/2010. R2 : COPY OF THE RECEIPTS OF CERTIFICATE OF POSTING IN RELATION TO THE NOTICES GIVEN TO THE APPLICANTS. R3 : COPY OF THE COUNTER FILED BY THE RESPONDENT IN A.O.P.NO.394/2010 BEFORE THE DISTRICT JUDGE, THRISSUR DTD 05/03/2011. R4 : COPY OF THE ANNUAL REPORT FOR THE YEAR 2009-10 OF THE RESPONDENT. R5 : COPY OF THE AMENDED THE MEMORANDUM OF ASSOCIATION AND ARTICLES OF ASSOCIATION OF THE RESPONDENT COMPANY. //TRUE COPY// P.A TO JUDGE. STU S. SIRI JAGAN, J. - - - - - - - - - - - - - - - - - - - - - - - A.R. No.15 of 2011 - - - - - - - - - - - - - - - - - - - - - - - Dated this the 4th day of November, 2011 O R D E R The applicants have filed this arbitration request for appointing an Arbitrator to arbitrate the dispute between the applicants on the one hand and the respondent on the other. The respondent is a company. The petitioners are shareholders of the respondent-company. The company provides cable TV signals to various cable operators including the petitioners. According to the applicants, the arbitration clause is contained in clause 15 of Annexure A3 Memorandum of Association of the respondent company which reads thus: “To refer or agree to refer any claims, demands disputes or any other question by or against the company or in which the company is interested or concerned whether between the company and the members or his or their representatives or between the company and third party to arbitration in India or at any place outside India and to observe and perform and to deal, acts, deeds, matters and things to carry out or enforce the awards.” They would contend that, the validity of the said clause as an arbitration clause has been up held by a Division Bench A.R. No.15 of 2011 -2- of this Court in arbitration appeal No.1/2008, judgment in which is produced as Annexure A2, which reads as follows: “Respondents in this case approached the District Court for an injunction against disconnecting signals for transmission of T.V. Programmes in the channel. They were cable operators. First respondent in the Arb. O.P. is transmitting T.V. signals to various cable operators through second respondent who is one of the distributor of signals. Respondents (appellants herein) contended that revised transmission charges are not paid by the petitioners. Further, it was contended that first and second respondent are entirely different entities and there is no arbitration clause or agreement for arbitration with second respondent. The District Court found that both petitioner and second respondent are shareholders of first respondent company and second respondent is the partner of first respondent company though second respondent as such is a firm. In the Memorandum of Association of first respondent company itself there is an arbitration clause. Clause 15 of the Memorandum of Association reads as follows: “To refer or agree to refer any claims, demands, disputes or any other question by or against the company or in which the company is interest or concerned whether between the company and the members or his or their representatives or between the company and third party to arbitration in India or at any place outside India and to observe and perform and to deal, acts, deeds, matters and things to carry out or enforce the awards.” It is clearly stated that disputes between not only with the company, but, with the members also can be referred for arbitration. Since section 9 is applicable even before arbitration starts and considering the balance of convenience, the District Judge granted prayers under section 9 (ii) (d) of the Arbitration and Conciliation Act. We see no ground to interfere with the above order. 2. It is submitted by the appellant that they should be allowed to raise the question of jurisdiction before the arbitrator and also arbitration proceedings is not started and if it is continuing indefinitely, that will cause irreparable hardship to them. In the above circumstances, petitioners (respondents A.R. No.15 of 2011 -3- in this appeal) shall take immediate steps for commencement of arbitration and it should be done expeditiously so that arbitration proceedings can be completed within six months. The injunction will stand only for six months or till the end of arbitration proceedings on condition that writ petitioner should continue to pay transmission charges at the old rate. The arbitrator shall dispose of the matter untrammeled by any of the observations in this judgment or in the impugned order. If the arbitration proceedings are delayed at the instance of the appellant, the injunction order will automatically be extended for the period of delay caused by the appellant. The arbitration appeal is disposed of .” 2. The applicants submit that they have raised a dispute in respect of the contract between the petitioners on the one hand and the respondent on the other by Annexure A4 notice dated 13.9.2010. It is submitted that, this court has in Arb. O.P. No.28/2010 appointed Mr. Justice M. Ramachandran, former Judge of this Court as the Arbitrator to arbitrate identical dispute between the respondent on the one hand and similarly placed cable operators on the other hand and therefore this matter also may be referred for arbitration to the same Arbitrator. 3. The respondent has filed a counter affidavit, wherein, they dispute the existence of the arbitration clause itself. They submit that, clause 15 of the Memorandum of A.R. No.15 of 2011 -4- Association has already been amended by resorting to the provisions contained in the Companies Act, which came into force with effect from 16.9.2010. Therefore there is no arbitration clause existing and consequently the alleged dispute cannot be referred for arbitration at all. They would also contend that a Division Bench of this court has in Skypark Builders & Distributors v. Kerala Police Housing and Construction [2003 (1) KLT 445] held that such clauses cannot be considered as an arbitration clause. It is further pointed out that, the so-called disputes narrated in Annexure A4 notice are not disputes at all but only certain requests made by the applicants to the respondent and therefore the arbitrability of those requests themselves are in dispute. 4. I have considered the rival contentions in detail. 5. As far as the question of existence of the arbitration clause is concerned, interpreting the very same clause in Annexure A3 Memorandum of Association, a Division Bench of this court has in Annexure A2 judgment A.R. No.15 of 2011 -5- accepted that the same as an arbitration clause. As such, I do not think that, I can, overlooking that judgment, hold otherwise. The 2nd question is as to whether the amendment stated to have been made deleting the arbitration clause would affect the claim in this arbitration request. Admittedly, Annexure A4 notice was issued on 13.9.2010 and the amendment deleting the said clause came into force only with effect from 16.10.2010. The contention of the respondent is that, the applicants cannot feign ignorance about the amendment of the clause since the statutory notices regarding the proposed amendment were issued to the petitioners on 21.8.2010. Therefore the applicants were aware of the proposal to amend the arbitration clause and therefore they cannot rely on that arbitration clause, is the contention raised. 6. I do not find any merit in that objection. Admittedly the amendment came into force only on 16.10.2010. Admittedly, the petitioners raised the dispute on 13.9.2010. As such, as on the date of raising of the A.R. No.15 of 2011 -6- dispute, there was an arbitration clause which has been accepted by a Division Bench of this Court as an arbitration clause. In so far as there was actually an arbitration clause existing at the time of arising of the dispute, I do not think that, the respondent can take the stand that since subsequently that arbitration clause was amended no arbitration request would lie. 7. Thirdly, the respondent would contend that, there is no arbitrable dispute. The counsel submits that, in Annexure A4 there are only some requests insofar as the applicants have only requested the respondent to make certain provisions. In Annexure A4, what the applicants have stated is as follows: “2) ¦VÌßçd¿xùáæ¿ ÄàVMßÈí ùËV æºçÏîI ÄVA Ø¢·ÄßµZ ÄÞæÝ ÉùÏáKÕÏÞµáKá. A) çµø{Õß×X ÜßÎßxÁí çµÌßZ ³MçùxVÎÞVAí ÈWµáK ØßoW §¿ÈßÜAÞøßÜïÞæÄ çµø{ Õß×X ÜßÎßxÁßW ÈßKí çÈøßGí æ×ÏV çÙÞZÁVÎÞøÞÏ çµÌßZ ³MçùxVÎÞVAí ÜÍßAÞÈáU Ø¢ÕßÇÞÈ¢ ©IÞAáµ. B) çµø{Õß×X ÜßÎßxÁíåµOÈß æ×ÏV çÙÞZÁVÎÞøÞÏ çµÌßZ ³MçùxVÎÞVAíå ØßoWå A.R. No.15 of 2011 -7- ÈWµáKÄßæÈ Ø¢ÌtßºîáU ÕcÕØíÅµZ ©ZæAÞUßºîí çÈøßGáU µøÞùáµZ ²Mí æÕÏíçAIÄá¢, ®ÜïÞ çµÌßZ ³MçùxVÎÞVAá¢ µøÞùßæa çÈVÉµVMáµZ ²MßGí ÈWçµIÄá¢, µøÞùßæÜ ÕcÕØíÅµZ çµÌßZ ³MçùxVÎÞøáÎÞÏß çÈøßGí ÎáXµâGß ºVºî æºÏñí ÍâøßÉfÞÍßdÉÞÏçJÞ¿áµâ¿ß ÄàøáÎÞÈßÏíAáÕÞÈáU Ø¢ÕßÇÞÈ¢ ©IÞAáµ. C) çµø{Õß×X ÜßÎßxÁí çÈøßGí çµÌßZ ³MçùxVÎÞVAí ØßoW ÈWµáçOÞZ ºÞÈW2, ºÞÈW3, ºÞÈW 4 ®KßÕ ¥ÄÞÄí çµÌßZ ³MçùxVÎÞVAí Øì¼ÈcÎÞÏß ÈWµÞÈá¢, ¦ ºÞÈÜßÜâæ¿ ¥ÄÞÄí çµÌßZ ³MçùxVÎÞVAí dÉÞçÆÖßµºÞÈÜáµZ ©ÉçÍÞµñÞA {ßæÜJßÏíAÞÈáU ¥ÕµÞÖÕá¢, ¥ÇßµÞøÕá¢ çµÌßZ ³MçùxVÎÞVAí Èwµáµ. D) çµÌßZ ¿ß.Õß. ÌßØßÈTßW ÕøáK ¯æÄÞøá ÉáÄßÏ ÌßØßÈTá¢ (¥ÄÞÏÄí §aVæÈxí, iptv, video on demand Äá¿BßÏÕ) ©ÉçÍÞµñÞAZAí çÈøßGí ÈWµáKÄßÈáU ¥ÇßµÞøÕá¢, ÈßÏdLÃÕá¢ ¥ÄÞÄí çµÌßZ ³MçùxVÎÞVAí ©IÞÏßøßAÃ¢.å E) çµø{Õß×X ÜßÎßxÁßæa ØßoW ©ÉçÏÞ·ßAáK çµÌßZ ³MçùxVÎÞøáæ¿ µÃµíxßÕßxß ®HßJßGæM¿áJß ØáÄÞøcÎÞÏá¢ Õ{æø ÕcµñÕá¢, µcÄcÕá¢ ØÄcØtÕáÎÞÏ øàÄßÏßW ¯µàµcÄ ÜßCí ºÞV¼í¼í ÈßÖíºÏßAáµ çÉ ºÞÈÜáµZAí çµø{ Õß×X ÜßÎßxÁí ÈWµáK Ø¢¶cÏáÎÞÏá¢, çµø{ Õß×X ÜßÎßxÁßæa ºßÜÕáÎÞÏá¢ ÄÞøÄÎcæM¿áJßÏá¢ ¥¿ßØíÅÞÈæM¿áJßÏá¢ ÜßCí ºÞV¼í¼í ÈßÖíºÏßçAIÄÞÃí.åçÎW ÉùE µÞøcBZ ©ZæM¿áJß ²øá æÉÞÄáÎÞÈÆÃíÁ¢ ÈßÖíºÏßAáµ. F) çµø{ Õß×X ÜßÎßxÁí, TCV ÎáÄÜÞÏ ºÞÈÜáµ{ßW ÈßKá¢ collect æºÏîáK Carrier charge, A.R. No.15 of 2011 -8- æ×ÏV çÙÞZçÁÝíØí ¦Ï çµÌßZ ³MçùxÝíØßÈÞÏß distribute æºÏñí ÈWµáµçÏÞ, æ×ÏV çÙÞZçÁÝíØí ¦Ï çµÌßZ ³MçùxÝíØí çÉ ºÞÈÜßÈÞÏß ÈWµáK ÉÃJßW ¥ÄÞÄí ÎÞØ¢ µáùÕí æºÏñí ÈWµáµçÏÞ çÕÃ¢. G) çµø{Õß×X ÜßÎßxÁßæa çµÌßZ ³MçùxVÎÞøáæ¿ µÃµíxßÕßxßÏíAÈáØøßºîí çÄÞÄßW (®HßJßGæM¿áJßÏ µÃfÈáµ{áæ¿ ¥ÈáÉÞÄJßW) ÎÞdÄ¢ µOÈßÏáæ¿ æ×ÏùáµZ ÈWçµIÄÞÃí.åÈßÜÕßÜáU Ø¢ÕßÇÞÈJßÜá¢ ¥ÄÈáØøßºîí ÎÞx¢ ÕøáçJIÄÞÃí.å H) çÎW ÉùE µÞøcBZ ©ZæAÞUßºîá¢, çµÌßZ ³MçùxVÎÞøáæ¿ ÌßØßÈTá¢, çµø{ Õß×X ÜßÎßxÁá¢ ÖµñÕá¢ ØáÄÞøcÕáÎÞAáKÄßÈá¢ çÕIÄÞÏ Îxá µÞøcBZ ©ZæAÞUßºîá¢ ²øá Øíµà¢ ÄÏîÞùÞAß È¿MßW ÕøáJáµ. çµø{ Õß×X ÜßÎßxÁáÎÞÏß ®æa µfßµZAáU çÎWÉùE ÄVABZ ÉøßÙøßºîá µßGáÕÞÈÞÏß ®ÜïÞ ØÙµøÃB{á¢ æºÏîáÕÞX ®æa µfßµZ ÄÏîÞùÞÃí.å¦ÏÄßÈÞW ÄVA ÉøßÙÞøJßÈÞÏß Memorandum of Association 15-Þ¢ ÕµáMí dÉµÞøÕá¢, Articles of Association 33 (g) ®Kà ¦VÌßçd¿×X clauseµZ Invoke æºÏñáæµÞIí ²øá ¦VÌßçd¿xæù ©¿X ÈßÏÎßºîí çÎWÉùE ÄVA Ø¢·ÄßµZ ¦VÌßçd¿xùáæ¿ ÄàVMßÈÞÏß ùËV æºÏîÃæÎKá¢ §AÞøc¢ ®æa µfßµæ{ ¥ùßÏßÏíAÃæÎKá¢ ®æa µfßµZ ¥ùßÏßÏíAáKá.å¥ÜïÞJÉf¢ çÎW È¿É¿ßµZ ®æa µfßµZ ØbàµøßAáKÄÞæÃKá¢ ¥ùßÏßAáKá. å ” Notwithstanding the language used therein, going by the same, the applicants have stated that those are disputes raised by them for the decision of the Arbitrator. If the respondent has a case that any of those disputes are not A.R. No.15 of 2011 -9- disputes arising from the contract between the parties, it is for the respondent to take up the said contention before the Arbitrator in the arbitration proceedings. Therefore, I do not find any merit in the 3rd contention also. 8. In the above circumstances, I am satisfied that the applicants are entitled to have an Arbitrator appointed by this Court in accordance with the arbitration clause. Therefore, I appoint Mr. Justice M. Ramachandran, 2/A, Sivam, Layam Road, Ernakulam, Kochi - 682 011 as the arbitrator to arbitrate the disputes between the parties. The Arbitration Request is disposed of as above. Sd/- S. SIRI JAGAN JUDGE //True copy// P.A. TO JUDGE shg/