2011 Supreme(Bom) 1484
BOMBAY HIGH COURT AT PANAJI, GOA
A.P. LAVANDE, J.
M/s. Cosme Farma Laboratories Ltd. Petitioner
Versus
M/s. Shwarde Pharmaceutical Pvt. Ltd. - Respondent
Application for Appointment of Arbitrator No. 19 of 2009
Decided On : 17th December, 2011
Mr. S.M. Singbal, for the petitioner.
Mr. V. Braganza, for the respondent.
Headnote:Arbitration and Conciliation Act, 1996 - Section 11(6). - Appointment of Arbitrator - Application for - In respect of dispute arisen between petitioner and respondent to agreements dated, 12.2.2001 and 14.5.2002 - Contention that both agreements contain arbitration clauses and in terms of both agreements, Rs. 15,75,448.22 due by respondent to petitioner and claim of petitioners not barred by limitation - Petitioner not invoked arbitration clause in first agreement before filing application under Section 11(6) of Act - Application in respect of first agreement not maintainable - Claim of petitioner in respect of second agreement not live claim and barred by limitation - Petitioner claimed reference to arbitration after period of limitation from date of expiry of agreement - Application not maintainable - Dismissed with costs.
A.P. Lavande, J.
Heard Mr. Singbal, learned Counsel for the petitioner and Mr. Braganza learned Counsel for the respondent.
2. By this application, the applicant seeks appointment of an arbitrator under Section 11 (6) of the Arbitration and Conciliation Act, 1996 (The Act' for short) in respect of the disputes arisen between the parties to agreements dated 12th February. 2001 and 14th May, 2002.
3. The petitioner and the respondent entered into an agreement of manufacturing dated 12th February, 2001 ('Manufacturing Agreement' for short) on certain terms and conditions mentioned therein. Clause 12 of the said agreement contains arbitration cause. The petitioner and respondent entered into separate supply agreement dated 14th May, 2002 ('Supply Agreement' for short) on the terms and conditions mentioned therein. Clause 10.8 of the said agreement reads as under :
"10.8 Any dispute, difference or question arising between the parties in connection with or relating to this agreement shall first be amicably settled or else the same shall be settled by arbitration of one arbitrator to be appointed with the consent of the parties hereto. otherwise each party will appoint one arbitrator who in turn shall appoint umpire. Such arbitration shall be governed by the Rules of Indian Council of Arbitration. The arbitration proceedings shall be held in English. The venue of arbitration shall be at Goa, India. The cost of arbitration shall be borne by the party whose claims are not upheld by the arbitral tribunal."
4. Clause 8.1 of the Manufacturing Agreement stipulated that the agreement shall be effective from the date indicated in the agreement and shall remain in force for a period of three years. It further provided that after the period of three years the agreement shall remain in force for successive period of one year each unless terminated in accordance with clause 8.2 of Manufacturing Agreement d hereunder. Insofar as Supply Agreement is concerned, clause 8.1 of the said agreement provided that the agreement shall remain in force from the date of agreement and shall subject to the provisions of causes 8.2 and 8.3 remain in force for a period of three years thereafter. The agreement further provided that the agreement may be renewed thereafter for such further period and on such terms and conditions as may be then agreed upon between the parties.
5. Certain disputes arose between the parties. On 26th May, 2008, on behalf of the petitioner advocate's notice was issued to the respondent, inter alia calling upon the respondent to return change parts, punches and dies and further calling upon the respondent to settle the dues of Rs.I0.56.628.57 along with interest at the rate of 18 % per annum thereon and also damages within 15 days from the receipt of the notice. In the said notice, it was further stated that in case the notice was not complied with, the petitioner would be compelled to institute the legal proceedings against the respondent and refer the dispute to arbitration in terms of The Act. On behalf of the petitioner, the name of retired District Judge Dr. Alvares Noronha Fereira was suggested for being appointed as an arbitrator. In the notice sent by advocate for the petitioner in paragraph 2, reference was made only to the Supply Agreement and not to Manufacturing Agreement. The respondent sent reply dated 26th June. 2008 through its advocate, inter alia, contending that Supply Agreement had expired on 13th May, 2005 and it was not renewed thereafter. The claim was also resisted on the merits by the respondent. The respondent claimed that an amount of Rs.1.79.060/- was due to the respondent from the petitioner. The respondent also claimed that invocation of the agreement was barred by limitation and claimed that there was no live arbitral dispute and as such, appointment of an arbitrator to settle the claim did not arise. The petitioner through its advocate sent notice dated 5th August. 2008 to the advocate for the respondent