IMPORTANT POINT
When the agreement specifically ousts jurisdiction of Indian arbitration laws, application u/s 11(6) of Arbitration and Concilaition Act, 1996 cannot be maintained.

JUDGMENT

V.S. Sirpurkar, J. —

1. This is a petition under section 11(6) of the Arbitration and Conciliation Act (hereinafter called ‘the Act’). While the petitioner is registered under the Companies Act, 1956, the respondent is a company incorporated in Seoul, South Korea with its principle place at Seoul. The disputes have arisen in between these two companies out of a Distributorship Agreement which was entered between the parties on 2.2.2004. By this, the petitioner was to be the exclusive distributor of the respondent in India and Bhutan for its products like Excavators, Wheel Loaders etc. Article 23 of the Distributorship Agreement provides for the resolution of disputes by arbitration. Since the disputes have arisen in between the two companies and since one of the companies is based in Seoul, South Korea, the present petition has been filed treating this to be an international arbitration. There is no dispute between the parties that this will be the international arbitration on the basis of the arbitration Clause being Article 23 of the Distributorship Agreement.

2. There is also no dispute that the disputes have arisen between the parties on account of which the respondent purported to terminate the Agreement entered into between them. In pursuance of the disputes, the petitioner issued notice dated 01.09.2007 for appointment of an Arbitrator to resolve the disputes arisen between the parties. However, that not having been done, the present petition is necessitated.

3. Since the parties have not disputed about the existence of the arbitration clause, a live issue on account of the existence of the disputes, there would be no question of recording any finding. However, for putting the record straight, the issues as raised by the petitioner are as follows:

“1. whether the premature and whether allegedly premature and unilateral termination of the distributorship agreement by the respondent is valid in law.

2. whether the various contentions raised by respondent for terminating the distributorship agreement are valid in law

3. whether the respondent are right in unilaterally raising the price of the products in the middle of the year

4. whether the respondent is right in unilaterally controlling the supplies to the petitioner

5. whether the respondent is stopped from its promise to the petitioner to appoint them as national dealer for 10 years

6. whether the respondents are liable for damages to petitioner for breach”

4. The petition is countered on behalf of the respondent who opposes the same on account of maintainability. According to the respondent, only the Rules of Arbitration of International Chamber of Commerce would apply in accordance with the Agreement between the parties. It is contended by the respondent that this Court will have no jurisdiction much less under Section 11(6) of the Act to appoint Arbitrator, particularly, because it has been specifically agreed in Article 22 and 23 which are as under:

“Article 22. Governing Laws - 22.1 : This agreement shall be governed by and construed in accordance with the laws of The Republic of Korea.

Article 23. Arbitration - 23.1 : All disputes arising in connection with this Agreement shall be finally settled by arbitration in Seoul, Korea (or such other place as the parties may agree in writing), pursuant to the rules of agreement then in force of the International Chamber of Commerce (emphasis supplied)”

5. The respondent, therefore, contended that the petitioner would not be entitled to maintain the present proceedings in India by invoking the provisions of the Act. The respondent specifically disputes the stand of the petitioner that there is nothing in the Agreement to deny the applicability of Indian procedural law seeking appointment of Arbitrator. The respondent also specifically contended that there is express exclusion of Indian Courts and/or the applicability of the Act. Their basic contention was that under the relevant clauses the jurisdiction of the Indian