HIGH COURT OF RAJASTHAN (JAIPUR BENCH)
MR. JUSTICE SUDESH BANSAL, J
Anil Raghuvanshi S/O Sh. Mardan Singh Ji Raghuvanshi - Appellant
Versus
M/S Shree Cement Ltd. - Respondent
ARBAP / 110 / 2023
Decided On : 07-02-2025
(A) Arbitration and Conciliation Act, 1996 - Section 11 - Appointment of Arbitrator - Applicant seeks appointment of a sole Arbitrator for disputes arising from termination of his appointment as C&F Sales Promoter under a dealership agreement dated 16.02.2021 - Applicant claims damages for arbitrary termination without notice - Non-applicant contends that applicant revoked the agreement and received full settlement - Court finds existence of arbitration agreement and refers the matter for arbitration. (Paras 2, 9, 10, 12)
(B) Scope of High Court under Section 11(6) - The High Court's role is limited to examining the existence of a dispute and an arbitration agreement, not the merits of the case. (Paras 10, 11)
Facts of the case:
The applicant, a proprietor, was appointed as C&F Sales Promoter by the non-applicant company and claims damages for termination of his appointment without notice. (Paras 2, 3)
Findings of Court:
The dispute is to be referred for arbitration as per the arbitration clause in the agreement, given that mutual resolution was not achieved. (Paras 9, 12)
Issues: The main issues include the existence of an arbitration agreement and the validity of the termination of the agreement. (Paras 8, 10)
Ratio Decidendi: The court ruled that the existence of an arbitration agreement is sufficient to refer the matter for arbitration, and the High Court's examination is limited to this aspect. (Paras 10, 11)
Result: Arbitration application allowed and Arbitrator appointed.
| Table of Content |
|---|
| 1. court finds existence of dispute (Para 8 , 10 , 11) |
| 2. existence of arbitration agreement (Para 9) |
| 3. arbitration application succeeds (Para 12 , 13 , 14 , 15 , 16 , 17 , 18) |
Order :
1. Heard counsel for both parties and perused the record.
2. By means of instant civil arbitration application, filed under Section 11 of the Arbitration and Conciliation Act, 1996 (for short "the A&C Act, 1996"), applicant is seeking appointment of a sole Arbitrator, to resolve the dispute and differences arisen between applicant and non-applicant No.1- Company (M/s Shree Cement Ltd.) in respect of termination of his appointment as C&F Sales Promoter, in furtherance to the dealership agreement dated 16.02.2021.
3. Applicant has come up with a case that he is a proprietor of Shri Balaji Building Material and he was appointed as C&F Sales Promoter by the non-applicant No.1- Company viz. M/s Shree Cement Ltd. pursuant to the dealership/ C&F agreement dated 16.02.2021 and applicant deposited an amount of Rs. 15 lakhs as security. It has been pleaded by applicant that in furtherance to such appointment, work had been started w.e.f. 16.02.2021, however, non-applicant No.1- Company without assigning any reason and without issuing any notice, terminated his appointment as C&F Sales Promoter on 22.01.2023.
4. Applicant is claiming damages for such arbitrary termination of his agreement of promotership and has relied upon Clause 9(a) of the agreement dated 16.02.2021 to refer his claim for Arbitration. For ready reference, Clause 9(a) of the agreement is being reproduced as under:-
"9. Miscellaneous Clauses (a) Any disputes, differences and doubts whatsoever which may arise between the parties hereto during the continuance of this Agreement touching this Agreement shall be resolve amicably within 30 days, failing which, the same shall be referred to arbitration of a sole arbitrator, appointed by the Company, whose decision and Award shall be final and binding on both the parties. Such arbitrator shall have the power to make interim Awards have summary powers, as well as power to make Award/s without giving reasons. The arbitration will be in English language. All such arbitration proceedings shall be held at Beawar in Rajasthan shall be in accordance with and subject to the provisions of the Arbitration and Conciliation Act, 1996 or any statutory modification(s), re-enactment thereof for the time being in force."
5. It appears from record that prior to filing of the instant arbitration application, a legal notice dated 05.08.2023 was issued by the applicant to the non-applicants, invoking the arbitration clause and for seeking appointment of Arbitrator with mutual consent. According to the applicant, despite service of notice, same has not been responded, hence instant arbitration application has been filed on 1st September 2023.
6. On behalf of non-applicant No.1- Company viz. M/s Shree Cement Ltd. reply to the arbitration application has been filed, resisting the arbitration application on the ground that applicant himself made a prayer for revocation of the dealership agreement through letter dated 27.04.2023 and in furtherance thereto, non- applicant No.1- Company has paid and cleared entire outstanding amount through cheques. Thereafter, the present arbitration application has been filed with an ulterior motive and having malice intention to grab more amount from the non-applicant No.1.
7. Counsel, appearing for non-applicant No.1, during course of arguments, raised an objection that non-applicants No.2, 3 & 4 have erroneously been impleaded as party in the present application, since they are not responsible towards the termination of agreement of applicant by M/s Shree Cement Limited in any manner, hence their names need to be deleted.
8. Having considered the contention of counsel for both parties, this Court finds that the dispute between applicant and non- applicant No.1 has obviously arisen, either relating to the arbitrary termination of
The High Court's role under Section 11 of the Arbitration and Conciliation Act is limited to confirming the existence of an arbitration agreement, not addressing the merits of the dispute.
The court's jurisdiction under Section 11(6) of the Arbitration and Conciliation Act is limited to determining the existence of a dispute and an arbitration agreement, not the merits of the case.
Strict enforcement of arbitration agreement and the law does not permit either party to act as an arbitrator or appoint the arbitrator to arbitrate on the disputes.
The main legal point established in the judgment is that the application under section 11(6) of the Act, 1996 is not maintainable when the sole Arbitrator is appointed by mutual consent and in the ab....
The court's jurisdiction under Section 11(6) of the Arbitration and Conciliation Act, 1996 is limited to confirming the existence of an arbitration agreement, not its validity.
The appointment of an arbitrator under Section 11 of the Arbitration and Conciliation Act requires only a prima facie examination of the arbitration agreement's existence, with mixed questions of law....
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