IMPORTANT POINT
Ingredients of a binding arbitration agreement.

ORDER

Swatanter Kumar, J.

1. M/s. Powertech World Wide Limited, the petitioner, is a limited company registered under the Companies Act, 1956, having its registered office at 202, Krishna Chambers, 59, New Marine Lines, Churchgate, Mumbai and has filed the present petition through its authorized representative under Section 11(6) of the Arbitration and Conciliation Act, 1996 (for short ‘the Act’) praying for appointment of an Arbitrator. M/s. 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 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: -

“Any disputes arising out of this Purchase Contract shall be settled amicably between Both the parties or through an Arbitrator in India/UAE.”

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 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 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