An Arbitral Tribunal must decide in accordance with the terms of the contract and should not base the award on conjecture or surmises.

PRATHIBA M. SINGH, J.

1. The present petition under Section 34 of the Arbitration and Conciliation Act, 1996 has been filed by the Petitioners - India Yamaha Motor Pvt. Ltd. and Yamaha India Sales Pvt. Ltd., challenging the award made by the Ld. Sole Arbitrator dated 16th April, 2012.

2. The Petitioners - India Yamaha Motor Pvt. Ltd. and Yamaha India Sales Pvt. Ltd. (collectively referred as ‘Yamaha’) are manufacturers and sellers of two wheelers and other automobiles, including spare parts for the same. Yamaha appointed Divya Ashish Jamwal as its dealer in Jammu region. It is the case of the dealer that he was allotted the dealership initially in the year 1980 and by the time disputes arose he had been a dealer of Yamaha for more than 27 years. The dealer, claims that he had opened the dealership showroom in Gandhi Nagar, Jammu, which was widely publicised and was also converted into a high tech service centre. However, in the year 2006, he was harassed by the General Manager, Sales and Marketing of Yamaha, who started making unfair demands on him and also neglected to supply vehicles to him. Disputes thus arose out of the last dealership agreement, dated 10th October, 2005. The said dealership agreement had an arbitration clause. Respondent – Divya Ashish Jamwal (hereinafter “Dealer”) invoked the arbitration clause under the aegis of Indian Council of Arbitration. and initially sought the following reliefs:

“(i) An award be passed in the favour of the applicant for sum of Rs.9,20,000/- nine lacs twenty thousand rupees) together with future interest at the rate 24% p.a. from the date of filling this application till the payment and/or realization and

(ii) A direction to the respondents to resume supplies of the Bi-wheelers product to the applicants and

(iii) Cost of this Arbitration Proceedings, and other incidental costs to the present reference; and

(iv) And any other relief which this Applicants may be found entitled to in the circumstances of the case.”

3. While arbitral proceedings were under progress, the Petitioner terminated the dealership vide letter dated 4th June, 2007. The dealer, thereafter, amended his claim petition. Prayers sought by the dealer in the amended claim petition are as under:

“That the applicants prays in the interest of justice that this Hon’ble Arbitration Tribunal may be pleased to pass:

i. An award be passed in the favour of the applicant for sum of Rs.9,20,000/- (nine lacs twenty thousand rupees) together with future interest at the rate 24% p.a. from the date of filling this application till the payment and / or realization and for every subsequent month till disposal of this application as mentioned in par 18a & b with 18% interest

ii. Award cost of unsold spares parts amounting to 13 lacs and to direct to take back the said stock

iii. A direction to the respondents to resume supplies of the Bi-wheelers product to the applicants and

iv. Cost of this Arbitration Proceedings, and other incidental costs to the present reference; and

v. And any other relief which this Applicants may be found entitled to in the circumstances of the case.”

4. The case of Yamaha before the Ld. Arbitrator was that the dealer, though an old dealer, did not service the dealership in a diligent manner. There was a steep reduction in sales, which had resulted in loss of market share in the Jammu region. The showroom was being misused and no interest was shown by the dealer in running the dealership. Under these circumstances, Yamaha had no option but to terminate the dealership as per clause 10.6 of the Dealer Agreement. Photographs of the showroom were also placed on record before the Arbitral Tribunal. The Dealer on the other hand argued that it was only due to the high-handedness of a senior official that disputes arose and a long standing relationship had soured.

5. The Ld. Arbitrator, held in favour of the dealer and awarded the following sums.

“5. As per documents referred to above, the net profit of the claimant exceed