Powertech World Wide Limited vs Delvin International Gen.Trading Llc

Delvin International General Trading LLC, the respondent, is also a company, which has been incorporated under the laws of Dubai (UAE) having its registered office in Dubai and is 1 stated to be engaged in the business of importing and selling of various commodities. The respondent was desirous of purchasing and the petitioner was willing to sell various articles in the course of their international trade, for which their negotiations in November 2006 finally resulted in a purchase contract dated 1st December, 2006 executed between the parties. This contract specifically noticed that after satisfactory discussions between the respondent and the petitioner, the respondent agreed to join hands and work with the petitioner on the terms and conditions provided in the contract. This contract was to be operative and valid for a period of one year subject to the terms and the conditions mentioned therein and became effective w.e.f. 1st December, 2006. The contract also contained an arbitration clause which reads as under: -

2. In furtherance to this contract, the goods were sold and supplied by the petitioner and are stated to have been duly received by the respondent, without any demur in relation to the quantity and quality of the goods. The bills raised by the petitioner were sent through petitioner's bankers. The 2 documents were accepted by the negotiating bankers. It is the case of the petitioner that initially the respondent was prompt in payments for the consignments sold and supplied to it in conformity with the purchase order, i.e. within 60/90 days of the acceptance of the consignments. However, in April 2007, a request was made by the respondent to the petitioner to supply more goods as per its requirements, without insisting for the outstanding payments in respect of some previous consignments received at its end. Considering the good business relationship existed between the parties, the goods were supplied though the payments were not made. The requests made by the petitioner for payments of the outstanding dues were not acceded to by the respondent, despite repeated oral and written requests.

3. On 30th March, 2008, the respondent through its advocates, sent a notice to the petitioner claiming a sum of AED 4,00,000/- and also repelled the threat extended by the petitioner to initiate proceedings before the Export Credit Guarantee Corporation of India Limited (for short `ECGC') for imposing of sanctions etc. The notice also contained averments that the threat advanced by the petitioner in relation to obtaining sanctions, or otherwise taking 3 proceedings against the respondent was without any basis.

Through this notice, the advocates of the respondent informed the petitioner that they should make the payments within seven days, failing which, a law suit would be instituted for recovering the appropriate amount, compensation and costs.

The respondent also informed the petitioner that no threat should be extended for taking out the proceedings etc. which was otherwise undesirable.

4. This notice dated 30th March, 2008 was responded to by the petitioner through its advocates, vide letter dated 4th April, 2008 wherein besides stating the facts afore-noticed, it reiterated that the goods were supplied as per specifications and the allegations in the notice were baseless, while claiming a sum of US$ 63,86,005.56 as the amount payable by the respondent to the petitioner. It also claimed interest on the said amount till the date of payment and notified the respondent as under:

8. As the respondent could not be served in the normal course, a Registrar of this Court vide order dated 28th April, 2011 permitted the petitioner to serve the respondent by substituted service. The Registrar vide order dated 11 th June, 2011 noticed that the proof of publication of notice had been produced and the sole respondent stood served by substituted service. As no one appeared on behalf of the respondent despite service, vide order dated 25th July, 2011, the suit was ordered to be proceeded ex parte and the matter was heard accordingly.

But once the correspondence between the parties and attendant circumstances are read conjointly with the petition of the petitioner and with particular reference to the purchase contract, it becomes evident that the parties had an agreement in writing and were ad idem in their intention to refer these matters to an arbitrator in accordance with the provisions of the Act. Vide their letter dated 30th March, 2008, the respondent had raised certain claims upon the petitioner and had also repelled the threat extended by the petitioner to take steps before the ECGC. This notice had been responded to by the petitioner vide letter dated 4th April, 2008 wherein it had 14 raised its claims demanding payment of money within seven days and also stated that any default thereto would constrain it to take legal action. Finally, vide letter dated 30th May, 2008, the petitioner had invoked arbitration clause between the parties and, in fact, had even nominated an arbitrator calling upon the respondent to concur to the said appointment. Replying to this letter vide letter dated 27th June, 2008, the respondent had neither denied the existence nor the binding nature of the arbitration clause. On the contrary, it had requested the petitioner not to take any legal action for appointment of an arbitrator, as they wanted to suggest some other name as an arbitrator, that too, subject to consent of the petitioner. This letter conclusively proves that the respondent had admitted the existence of an arbitration agreement between the parties and consented to the idea of appointing a common/sole arbitrator to determine the disputes between the parties. However, thereafter there had been complete silence from its side, necessitating the filing of present petition under Section 11(6) of the Act by the petitioner. Thus, any ambiguity in the arbitration clause contained in the purchase contract stood extinct by the correspondence between the parties and the consensus ad idem in relation to the existence of an arbitration agreement 15 and settlement of disputes through arbitration became crystal clear. The parties obviously had committed to settle their disputes by arbitration, which they could not settle, as claims and counter claims had been raised in the correspondence exchanged between them. In view of the above, even the pre-

He prayed for appointment of a sole arbitrator as both the parties in their respective letters had agreed to appoint an arbitrator with common concurrence. Thus, in the afore-

mentioned circumstances, this petition is allowed and Mr. Justice D.R. Dhanuka (Retired) Judge, Bombay High Court, is appointed as Sole Arbitrator to adjudicate upon the disputes.

The parties are at liberty to file claims/counter claims before the appointed Arbitrator, which shall be decided in accordance with law.

No orders as to costs.

....................................J. [Swatanter Kumar] New Delhi;

November 14, 2011 17