THE HON’BLE SRI JUSTICE B.SESHASAYANA REDDY Arbitration Application No.10 of 2011 Date:18th April, 2011 Between: M/s.Universal Granites rep. by its Managing Partner I.V.Nanda Gopal …Applicant And M/s.Vijaya Granite Exports rep by Mr.T.Venkateswara Rao …Respondent *** THE HON’BLE SRI JUSTICE B.SESHASAYANA REDDY Arbitration Application No.10 of 2011 ORDER: This application has been taken out by M/s. Universal Granites, under Sections 11(6) of the Arbitration and Conciliation Act, 1996, seeking appointment of Sri Justice A.Gopal Rao, Retd. Judge of High Court of A.P., as sole arbitrator, for resolution of the disputes between the parties, relatable to agreement of lease, dated 26.06.2007. 2. The applicant is a partnership firm. The respondent is a company registered under the Companies Act, 1956. The applicant took the property owned by the respondent company on lease. Royalty agreement came to be executed between the parties. Initially, the lease period is for 3 years and it is extendable by 3 more years by mutual consent. The applicant exercised its option and issued a letter dated 15.05.2010 informing its option for extension of royalty lease agreement dated 26.06.2007. The respondent issued a reply. Thereupon, the applicant invoked the arbitration clause and issued a notice dated 19.06.2010 calling upon the respondent to consent for resolution of the dispute by Sri Justice V.Bhaskara Rao, Retd. Judge of High Court of A.P. The respondent issued a reply furnishing a panel of retired Judges of this Court for considering appointment as arbitrator. Relevant potion of the reply notice read as hereunder: “20. In reply to para.22 of your notice my clients state that in terms of clause 24 of the agreement any dispute arising out the agreement shall be referred to an arbitrator under the Arbitration Act. My clients further state that there is no arbitrable dispute between them so far as the license period and vacating the premises by your client immediately after expiry of the license period is concerned. In other words, it is the term of the contract that in the absence of any mutual consent, by afflux of time, the license period shall stands automatically expired. My clients have rightly expressed their unwillingness for granting any extension of time much prior to the expiry of the license period, which tantamount to expiry of the licence period afflux of time. Accordingly, your clients rightly stopped mining operations on the expiry of the license period and left the premises and thereupon my clients commenced the quarrying operation upon the expiry of the license period. When this being the position, the contention of your client that the disputes arose and the same are required to be referred to the Arbitrator is of no avail, more particularly, when the extension of license period and leaving the premises in view of the expiry of the license period are concerned. Suffice to say the dispute subsisting between my clients and your client is only in respect of the payment due and payable, but not with regard to the expiry of the license period or extension of time. My clients have no objection in referring the disputes in respect of the payments due and payable to them under various heads to any of the following persons for adjudication of the same and for passing appropriate award:- 1) Justice Sri A.Gopala Rao, Former Judge, High Court of Andhra Pradesh, Hydeabad, or 2) Justice Sri T.Ranga Rao, Former Judge, High Court of Andhra Pradesh, Hyderabad, or 3) Justice A.Hanumanthu, Former Judge, High Court of Andhra Pradesh, Hyderabad.” I therefore, hereby call upon your client on behalf of my clients to give consent within 30 days in appointing and referring the disputes in respect of the payment of arrears of licence fee, damages by way of interest on the amounts due etc., to any one of the above Hon’ble persons for adjudication of the same and for passing the award in terms of the provisions of the Arbitration and Conciliation Act, 1996.” The applicant has responded to the proposal moved by the respondent by issuing notice dated 19.08.2010. In a way, the applicant consented for appointment of Sri Justice A.Gopal Rao, Retd. Judge of High Court of A.P., as sole arbitrator. Hence, this application. 3. Notice to the respondent came to be ordered on 28.2.2011. The respondent entered appearance through a counsel. 4. When the application came up for consideration, both the learned counsel consented for appointment of Sri Justice A.Gopal Rao, Retd. Judge of High Court of A.P., as sole arbitrator, for resolution of the disputes between the parties, relatable to royalty lease agreement, dated 26.06.2007. 5. In that view of the matter, the Arbitration Application is allowed appointing Sri Justice A.Gopal Rao, Retd. Judge of High Court of A.P., as sole arbitrator, for resolution of the disputes between the parties, relatable to royalty lease agreement, dated 26.06.2007. The arbitrator shall be at liberty to fix his own fee. No order as to costs. ______________________ B.SESHASAYANA REDDY, J. Date:18th April, 2011. cs THE HON’BLE SRI JUSTICE B.SESHASAYANA REDDY Arbitration Application No.10 of 2011 Date:18th April, 2011