The amendment in the provision signifies a precise date for filing the application and that there is a limitation period prescribed for filing the Section 8 application. The court emphasized the need for parties wishing to proceed for arbitration to do so with alacrity and speed and not procrastinate.

JUDGMENT :

1. The present two suits have been filed by SSIPL Lifestyle Private Limited against two Defendants, namely, Vama Apparels (India) Private Limited and Ms. Jaya Pramanand Patel (hereinafter ‘Vama’). Both the suits are for recovery of sums of Rs.2,17,31,781/- and Rs.3,38,73,866/- respectively along with interest and other reliefs.

2. The suits arise out of agreement dated 22nd April, 2016 entered into between the parties i.e. SSIPL and Vama. The arrangement as per the said agreement was that SSIPL would supply to Vama various products for sale from the Vama Department Store situated at Kanchenjunga, 72 Peddar Road, Mumbai-400026 (hereinafter ‘space’). The agreement was signed by the Defendant No.2 on behalf of the Defendant No.1. Security deposits of Rs.35 lakhs and Rs. 70 lakhs respectively were deposited by SSIPL with Vama and the space was to be decorated as per the requirements of the SSIPL. The products supplied by the Plaintiff were to be stocked and stored by Vama at the allocated space. The marketing and brand promotion were to be conducted by SSIPL. The retail prices for the products was to be fixed by SSIPL. The entire sale proceeds of the products supplied was to be collected by Vama which was to be used by Vama for purchasing products from SSIPL. The sale margin of 14% of the net sales value of the products sold from all allocated space, was to be provided to Vama. The agreement contained an arbitration and jurisdiction clause which reads as under:

“31. ARBITRATION: All disputes, differences and questions whatsoever which shall arise between the parties hereto during the continuance of this Agreement thereof or any clause or matter therein contained or the rights, duties and liabilities of either party in connection therewith shall be referred to the arbitration of three arbitrators. Out of three, one to be appointed and nominated by the First Party, another to be appointed and nominated by the Second Party and the third to be appointed and nominated by the said two arbitrators nominated and appointed by the parties above named. The arbitration proceedings shall be held in Mumbai and shall be in accordance with the subject to the provisions of the Arbitration and Conciliation Act, 1996 or any statutory modifications(s) re-enactment thereof for the time being in force.

32. JURISDICTION: The courts at Mumbai shall have exclusive jurisdiction in all matters arising out of this Agreement.”

3. Along with the agreement, an addendum was also entered into where some minimum amount of sale was also guaranteed by Vama. A further side letter was also exchanged between the parties on the same date. The products that were to be sold included products under the brand names - Nike, Adidas and Sports Station.

4. Various disputes arose between the parties. There were allegations and counter allegations. Vama issued a notice dated 21st August, 2017 wherein refunds were sought of outstanding amounts. Vide letter dated 20th October, 2017, SSIPL terminated the agreement and there was continuous correspondence between the parties including a notice under Section 138 of the Negotiable Instruments Act for dishonouring of a cheque for a sum of Rs.5 lakhs. The present two suits were filed on 17th February, 2018 seeking recoveries.

5. Summons were issued in the suit on 15th March, 2018 and on 16th May, 2018, time was given for filing of the written statement. On 17th May, 2018, insolvency proceedings were commenced against Defendant No.1 before the NCLT which were finally closed on 8th October, 2018.

6. Vama then moved two applications under Section 8 of the Arbitration and Conciliation Act, 1996 in each of the suits. There is a dispute as to when exactly the said applications were filed by Vama. In the said applications, the prayers were for seeking reference to arbitration as per the arbitration clause in the agreements. The said applications remained under objections for some time. Finally, notice was issued in the applications being I.A.