JUDGMENT :

The short question that arises for the consideration of the Court in the above appeal under Section 37 of the Arbitration and Conciliation Act, 1996, hereinafter called the Act, is whether in the absence of a dispute/demand being raised by one party arbitral proceedings can be initiated and proceeded with by the other party.

2. In order to answer the issue arising in the instant case we have to briefly allude to the facts which preceded the appointment of the Arbitrator by the Chairman cum Managing Director of the 1st respondent Company.

3. The 1st respondent had accepted the request of the appellant to appoint him as the Authorized stockist of the 1st respondent's company's spare parts. They had issued a letter of offer dated 16.10.2003 informing the appellant that they were pleased to accept the request of the appellant and appoint him as their stockist. The business was to be conducted in a 800 Sq.ft area for the sales counter and a further extent of 800 Sq.ft as godown/stores at BD Road, Chindamani Commercial Complex, Salem. The appellant was allotted a unique stockist code 30085 which was to be quoted in all the correspondence. Further, the letter of offer provided for resolution of disputes arising out of this arrangement through arbitration. The sole Arbitrator was to be appointed by the Managing Director of the 1st respondent Company. The appellant was required to sign a copy of the letter of offer as a token of his acceptance. The appellant had also signed it and therefore the contract between the parties had been concluded.

4. From the documents filed before the Arbitral Tribunal it appears that the appellant was originally an Authorized Parts Stockist (APS) of the 1st respondent company at Namakkal from the year 1982 and thereafter at Salem in the year 2003. The appellant was concerned about the withdrawal of the credit limit and the trade incentives and had addressed the Executive Director of the 1st respondent company to restore the same taking into consideration the long association, sales achievement of the appellant and their capacity to achieve the targets. This request was put forward vide letters dated 05.08.2014, 01.09.2014, 25.12.2014 and 05.03.2015. These letters had only requested the Executive Director to restore the incentives that were originally given to him.

5. However, without the appellant raising a dispute or requesting for the appointment of an arbitrator stating that disputes have arisen between him and the 1st respondent, the 1st respondent had proceeded to request their Chairman and Managing Director to appoint an Arbitrator. The 2nd respondent was thereafter appointed as the Arbitrator. When the appellant had received the notice from the 2nd respondent he had by letter dated 09.02.2015/09.04.2015 and 17.02.2015 informed that there was no dispute requiring an Arbitrator to be appointed and his request could be resolved through discussions.

6. Despite such a letter from the appellant the arbitrator had proceeded with the matter. The appellant has not even filed his claim statement and the arbitrator has treated the letters sent by the claimant to the Executive Director of the 1st respondent on 05.08.2014 and 01.09.2014 as the claim statement. The Arbitrator had passed an award dismissing the claim petition and directed the claimant to pay the entire cost of the Arbitral proceedings.

7. The appellant had challenged this award by filing a petition under Section 34 of the Act, before the Principal District Court, Krishnagiri in Arb.O.P.No.10 of 2016 to set aside the award. However, the learned Judge by order dated 03.04.2017 dismissed the petition and it is challenging this order that the appellant is before this Court.

Submissions:

8. Mr.Richard Wilson who made his submissions for the appellant would primarily argue that there is no cause of action for invoking and continuing with the Arbitral proceedings since the appellant had not raised any dispute. Even in the 2 letters which has been trea