This application is filed under Section 11 (5) of the Arbitration and Conciliation Act, 1996 (for short, ‘the Act’) for appointment of an Arbitrator for adjudicating the disputes arising out of an agreement dated 16.06.1999.

2. The applicant is A.P. Beverages Corporation Limited. It is not in dispute that the applicant and the respondent company entered into an agreement dated 16.6.1999 whereunder the applicant agreed to acquire and the respondent agreed to furnish product and service for the MFG/PRO Depot Management System for system integration in accordance with the terms and conditions stipulated thereunder.

3. Alleging that in spite of several reminders by the applicant, the respondent failed to get the software programmes functioned in accordance with the terms and conditions agreed upon, the applicant issued a termination notice dated 3.1.2003 in terms of Article 8 of the agreement and called upon the respondent to refund a sum of Rs.43 Lakhs within 30 days. The respondent gave a belated reply dated 20.3.2003 denying the alleged breach of terms and conditions. Thereafter, the applicant issued a notice dated 21.6.2005 invoking the arbitration clause under the agreement for resolution of the disputes arising under the said agreement and proposing the name of N.J. Indra Kumar, Former District Judge & Registrar of Karnataka Lokayukta as the Arbitrator.

4. It is also pleaded by the applicant that as there was no response from the respondent within 30 days from the date of receipt of notice dated 3.1.2003, the agreement dated 16.6.1999 stood terminated. It is claimed by the applicant that having received the notice dated 21.06.2005, the respondent started negotiating with the applicant and promised to rectify the defects in the software provided by it. However there was no progress, though two years had elapsed. Hence the present application under Section 11 (5) of the Act for appointment of Arbitrator.

5. In the counter-affidavit filed by the respondent while denying the receipt of the notice dated 21.6.2005, it is also contended that the said notice dated 21.6.2005 said to have been issued by the applicant was not a valid request for arbitration since it was not issued to the proper address furnished for correspondence by the parties under the agreement. It is further contended that the purported notice for arbitration is liable to be declared as invalid and nullity since the nominated Arbitrator had not consented to act as an Arbitrator. It is also contended that the application is barred by limitation since even according to the applicant, the agreement was terminated on expiry of 30 days from the date of receipt of notice dated 3.1.2003. On merits, it is contended that the allegation that the respondent committed breach of the agreement was incorrect and baseless. It is further contended that in fact it was the obligation of the applicant to deliver all deliverable items before claiming any refund from the respondent, however the applicant failed to return the deliverable items and continued to utilize the same. Therefore the question of any refund as claimed by the applicant did not arise at all.

6. I have heard the learned counsel for both the parties and perused the material available on record.

7. As noticed above, there is no dispute as to the execution of the agreement dated 16.6.1999 between the parties and the said agreement contained an arbitration clause as under:

“ARTICLE 14. ARBITRATION

Any dispute or difference whatsoever between the parties which cannot be settled mutually, shall be settled finally by arbitration in Bangalore, India under and in accordance with the provisions of the Arbitration and Conciliation Act, 1996 or any statutory modification or re-enactment thereof.”

8. Alleging that the respondent committed breach of terms and conditions of the said agreement, the applicant issued a termination notice dated 3.1.2003. It is pleaded by the applicant that in the said notice the resp