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2017 Supreme(Del) 2109
IN THE HIGH COURT OF DELHI AT NEW DELHI
JAYANT NATH, J.
Yamaha Motor India Private Limited - Appellant
Versus
Mr. Raj Kumar Sahu - Respondent
ARB A. 2 of 2008
Decided On : 10-07-2017
Advocate Appeared:
For the Appellant : Mr. Sachin Dutta, Mr. Rahul Malhotra, Mr. Varun Garg
The significance of the arbitration agreement in excluding parties from the regular judicial process of law for settling disputes arising out of a transaction.
Headnote:
Arbitration Agreement - Dealership Dispute - Arbitration and Conciliation Act, 1996, Section 7
Fact of the Case:
Dispute arose between the appellant and respondent regarding a dealership agreement. The respondent filed suits in the Civil Court and challenged the arbitration agreement. The learned Arbitrator held that there was no arbitration clause between the parties.
Finding of the Court:
The court found that the absence of signatures on page 14 of the agreement did not imply that the parties did not agree to the arbitration clause. The impugned order was held to be contrary to the provisions of the Arbitration Act, 1996 and public policies of India.
Issues: Dispute over the existence of an arbitration clause, validity of the dealership agreement, and jurisdiction of the Arbitral Tribunal.
Ratio Decidendi: The absence of signatures on a specific page of the agreement does not necessarily imply non-agreement to the terms stated on that page. The court emphasized that the arbitration agreement is of great significance as it excludes parties from the regular judicial process of law for settling disputes arising out of a transaction.
Final Decision: The impugned order was quashed, and the petitioner was given the freedom to approach the Indian Council of Arbitration to appoint a fresh Arbitrator to adjudicate the dispute between the parties.
Jayant Nath, J.
1. The present appeal is filed under section 37(2) of the Arbitration and Conciliation Act, 1996 seeking to challenge the order dated 20.12.2007 passed by the learned Sole Arbitrator holding that there is no arbitration clause between the parties. It is urged that the respondent expressed an interest to become a dealer of the appellant company. The respondent also made an application on 21.7.1991. Appellant granted the dealership on 12.10.1991 and issued a letter of intent to the said effect. Thereafter parties entered into a dealership agreement.
2. Subsequently, there was a change of name of the appellant company on account of which amendment agreements were sent to the dealers on 7.7.2000. The respondent signed the said amendment agreement dated 7.7.2000. On 28.12.2002 the respondent entered into a fresh dealership agreement with the appellant for a period of three years. Disputes having arisen between the parties the appellant sent a legal notice on 20.6.2006 asking the respondent to clear its dues. Thereafter the appellant has filed this claim petition before ICA (Indian Council for Arbitration) on 10.10.2006 praying for an Award of Rs.65,63,412/-. The matter was referred to the learned Sole Arbitrator by ICA.
3. The respondent instead filed two suits before the Civil Court, Jhansi praying for a decree of mandatory injunction and for directions to the appellant to restore the dealership of the respondent. The respondent also prayed that the dealership agreement dated 28.12.2002 be declared null and void. Both the suits are said to have been adjourned to await the present decision. The respondent also filed an application under section 16(2) of the Arbitration and Conciliation Act. 1996 before the learned Arbitrator claiming that the learned Arbitral Tribunal has no jurisdiction to try the present claim. It was urged in the said application that no agreement exists as per law as respondent was not present in Delhi on 28.12.2002, the date, on which the agreement was allegedly entered into. It was also urged that the appellant company has procured the said agreement by committing fraud and forgery. It was also urged that the respondent saw the agreement only when the appellant filed an application under section 8 of the Act.
4. It may be noted in the application/ the respondent also makes contradictory statements that the respondent was not willing to accept the terms and conditions of the said agreement and had requested the officials of the appellant company about the same. It is urged that the officials of the appellant company forced the respondent to sign the agreement. As the appellant objected to the arbitration clause, on the request of the concerned official of the appellant company, it is urged that the respondent signed all the pages of the alleged dealership agreement except page 14, which page contained the arbitration clause.
5. The learned Arbitrator concluded that when the arbitration agreement was made in November, 2001 the respondent did not sign the page containing the arbitration clause and sent a letter objecting to its inclusion. Under the circumstances, the learned Arbitrator concluded that the respondent had impliedly not agreed to the arbitration agreement and he was trying to wriggle out of the same by not signing the page 14 of the dealership agreement.
6. I have heard learned senior counsel for the petitioner. None has appeared for the respondent despite pass over. On the last date of hearing also an adjournment had been sought on behalf of learned counsel for the respondent.
7. Section 7 of the Arbitration Act reads as follows:-
“Section 7. Arbitration Agreement –
(1) In this Part, “arbitration agreement” means an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not.
(2) An arbitration agreement may be in the form of an arbitration clause in
