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IN THE HIGH COURT OF JUDICATURE AT MADRAS
N. SATHISH KUMAR, J.
M/s. Vishal Abikaran, Rep. by its Authorised Partner, Karan Rishi & Another - Appellant
Versus
M/s. Nissan Motor India Private Limited, Rep. by its Authorised Signatory, Jabarjeet Singh & Another - Respondent
Arb.O.P. Nos. 315 & 98 of 2021
Decided on : 15-09-2021
Arbitration and Conciliation Act 1996 - Section 34 (2) (b) (ii) & 2 A - Compensation for Investments - Dealership agreement - Arbitration Original - Petitioner and respondent had entered into a dealership agreement on for a period of two years for dealership of NISSAN Brand Passenger Car for State of Maharashtra West/Nagpur Region - On expiry of two years - Fresh agreement was signed - On for an another period of two years - As per respondents policy - Petitioner had to raise infrastructure passenger car selling and servicing is a specialized business which requires technical skills with a hope that dealership can be for a minimum period of years – Accordingly petitioner had invested a huge amount of crores on building – Held, Having regard to above judgment and a settled position when award was passed merely on the basis of some assumption is nothing but perverse and the same is liable to be set aside - Since the particular award can be severable - Court can set aside portion of award - Honble apex court in dyna technologies private limited vs crompton greaves limited Supreme Court Cases 1 has held that requirements of a reasoned order are that reasons should be proper intelligible and adequate and the Court - While exercising jurisdiction under Section 34 of Act has to adjudicate the validity of an award based on degree of particularity of reasoning required having regard to nature of issues falling for consideration - In view of above settled position - Majority award passed b learned Arbitral Tribunal awarding compensation of lakhs alone is set aside – Petition Dismissed.
JUDGMENT :
(Prayer in Arb.O.P.No.315 of 2021: Arbitration Original Petition has been filed under Section 34 (2) (b) (ii) & 2 A of the Arbitration and Conciliation Act, 1996, to set aside the Majority Arbitration Award dated 19/10/2020 passed by the Arbitral Tribunal which has arisen out of the dispute between the petitioner and respondent and allow the petitioner’s claim petition.
Arb.O.P.No.98 of 2021: Arbitration Original Petition has been filed under Section 34 (2) (b) (ii) & 2 A of the Arbitration and Conciliation Act, 1996, to set aside the impugned portion of the majority Arbitral Award dated 19/10/2020 rendered by the learned Tribunal whereby the petitioner was directed to pay a sum of Rs.10,00,000/- to the respondents as compensation for the investments made with interest @ 18% p.a., w.e.f the date of the award.)
1. Challenging the majority award passed by the arbitral Tribunal, the petitioner/claimant has filed Arb.O.P.No.315 of 2021, challenging the portion of the award, in and by which the compensation of Rs.10 lakhs has been awarded, the respondent in Arb.O.P.No.315 of 2021 has filed Arb.O.P.No.98 of 2021.
2. Since both the Arbitration Original Petitions are arising out of the same award, this Court is inclined to dispose of both the Arb.O.Ps by way of a common order.
3. The brief facts leading to the filing of the Arbitration Original Petitions are as follows:-
The petitioner and respondent had entered into a dealership agreement, on 14/2/2014, for a period of two years, for raising the Permanent 3 S (Sales, Service & Spares) facility in Bilaspur, Chattisgarsh, as per Nissan Standards. On expiry of two years, fresh agreement was signed, on 14/2/2016, by the petitioner and sent the same for signing of the respondent, but not received the signed agreement from the respondent before the expiry of the term of the dealership. The dealership arrangement between parties continued till final discontinuation from the respondent. The petitioner in respect of the expiry of term notice, dated 15/2/2018, sent various letters, raising their grievances, including the letters, dated 9/3/2018 and 2/4/2018. In the said letters, the petitioner had not only objected the termination of the dealership but also requested for payments against pending claims and for buying back the spares, accessories and vehicle stock.
4. The petitioner had filed Arbitration Application No.3479 of 2018. Vide, order, dated 19/6/2018, this Court had disposed of the application and ordered as follows:-
5. The petitioner had filed the Statement of Claim, dated 14/11/2018, before the Arbitration Tribunal and the respondent had filed their counter reply, dated 11/1/2019, denying the claim of the petitioner, mainly on technical grounds. They have admitted one claim of Rs.2,87,918/- that has been eventually paid by the respondent under the interim order passed by the Tribunal.
6. Before the Tribunal, the respondent had filed the counter, denying all claims. Claimant had filed the rejoinder along with other documents.
7. On the side of the petitioner, C.W.1 has been examined, who has supported the entire claim of the petitioner/claimant and even in cross-examination, there was no material contradiction in his statements.
8. On the side of the respondent, R.Ws.1 and 2 have been examined. R.W.1 during cross examination has admitted that the petitioner’s claim can be verified from the Dealer Management System (DMS) as long as the dealership is in operation. During cross examination, R.W.2 has admitted that the dealer data of operational dealers are available on the Dealer Management System as long as the dealership i
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