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2022 Supreme(Mad) 2003

IN THE HIGH COURT OF JUDICATURE AT MADRAS
M. SUNDAR, J.
M/s. Amutha & Co., Represented by its partners A.L. Ramanathan, Tiruchirapalli - Appellant
Versus
Executive Director (RS-S&W) HO Indian Oil Corporation Ltd., Mumbai & Others - Respondent
ARB.OP. (COM.DIV) No. 270 of 2021 & WP. (MD) No. 1183 of 2022 & WMP. (MD) Nos. 1035 & 1037 of 2022
Decided On : 16-06-2022

Advocates appeared:
For the Petitioner:B. Kumar, N. Balaji, Advocates. For the Respondents:Mohammed Fayaz Ali, Advocate.

The main legal point established in the judgment is the arbitrability of disputes arising from a dealership agreement and the nature of relief that can be granted in arbitration, as governed by the Amritsar Gas principle.

Headnote:

Arbitration - Dealership Agreement - Arbitration and Conciliation Act, 1996 (Act No.26 of 1996) - Section 11(6)

Fact of the Case:

The case involved a dispute between a dealer and an oil company regarding the termination of a dealership agreement. The dealer sought appointment of a sole arbitrator to resolve the disputes between the parties.

Finding of the Court:

The court found that all disputes arising from the dealership agreement were arbitrable and appointed a sole arbitrator to adjudicate the disputes. The court also clarified that the relief to be granted would be governed by the Amritsar Gas principle, and the dealership agreement had expired in 2016.

Issues: The issues involved the arbitrability of the disputes arising from the dealership agreement, the appointment of a sole arbitrator, and the nature of relief that could be granted.

Ratio Decidendi: The court relied on the Amritsar Gas principle to determine the nature of relief that could be granted in the arbitration. It also emphasized the narrow scope of examination under Section 11(6) of the Arbitration and Conciliation Act, 1996, as per the legislative amendments.

Final Decision: The court appointed a former judge as the sole arbitrator to adjudicate the disputes arising from the dealership agreement and directed the arbitrator to render an award in accordance with the Madras High Court Arbitration Proceedings Rules 2017.

JUDGMENT

(Prayer in Arb.OP(Com.Div) No.270/2021: Original Petition filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 to appoint a new sole Arbitrator to resolve the disputes between the parties may be resolved.

WP (MD) No.1183 of 2022: Writ petition filed under Article 226 of The Constitution of India, 1950, praying to issue a writ of Certiorarified Mandamus calling for records with respect to impugned order passed by the 3rd respondent dated 17.09.2021 confirming the order of the 2nd respondent dated 24.10.2013 in TCHDO:R:TRY-2, terminating the Dealership of the Petitioner and quash the same and consequently directing the respondents to permit the petitioner to conduct the business in their outlet.)

Common Order

1. This common order will govern the captioned Arb.OP, writ petition and the two WMPs in the writ petition.

2. This order has to be read in conjunction with and in continuation of proceedings made by this Court on 01.03.2022 when captioned Arb.OP was listed. This 01.03.2022 proceedings reads as follows:

'Captioned 'Arbitration Original Petition' ('Arb.OP' for the sake of brevity) has been presented in this Court on 29.11.2021 under Section 11(6) of 'The Arbitration and Conciliation Act, 1996 (Act No.26 of 1996)', which shall hereinafter be referred to as 'A and C Act' for the sake of brevity with a prayer for appointment of a sole Arbitrator to resolve the disputes between the petitioner and respondents.

2. In these proceedings, for the sake of convenience and clarity the sole petitioner in captioned Arb.OP shall be referred to as 'dealer' and all the three respondents in the captioned Arb.OP shall be collectively referred to as 'Oil Company'.

3. The captioned Arb.OP is predicated on an arbitration agreement which is in the form of a clause i.e., Clause 67 in an agreement captioned 'PETROL / HSD PUMP DEALER AGREEMENT FOR CORPORATION OWNED/LEASED SITES' (hereinafter 'Dealership Agreement' for the sake of convenience and clarity). To be noted, the Dealership Agreement is dated 30.03.2001 and this will be referred to as 'primary agreement' for the sake of convenience and Clause 67 of the primary agreement reads as follows:

67. Any disputes and/or difference of any nature whatsoever or regarding any right, liability, act, omission on account of any of the parties hereto arising out of or in relation to this agreement shall be referred to the sole arbitration of the Director (Marketing) of the Corporation or of some Officer of the Corporation who may be nominated by the Director (Marketing). It is know to the parties to the Agreement that the arbitration so nominated is an employee of the Corporation and may be shareholder of the Corporation. In the event of the arbitrator to whom the matter is originally referred being transferred or vacating his office of being unable to act for any reason, the Director (Marketing) as aforesaid at the time of such transfer or officer of the Corporation to act as arbitrator in accordance with the terms of the Agreement. Such person shall be entitled to proceed with the reference from the point at which it was left by his predecessor. It is also a term of this agreement that no person other than the Director (Marketing) or a person nominated by such Director (Marketing) of the Corporation as aforesaid shall act as arbitrator hereunder. The award of the arbitrator so appointed shall be final conclusive and binding on all parties to the agreement, subject to the provisions of the Arbitration and Conciliation Act, 1996 or any statutory modification of or re-enactment thereof and the rules made thereunder and for the time being in force shall apply to the arbitration proceeding under this clause.'

4. Aforementioned Clause 67 serves as an arbitration agreement between the dealer and Oil Company i.e., arbitration agreement within the meaning of Section 2(1)(b) read with Section 7 of A and C Act.

5. The primary agreement pertains to a retail outlet at Trichy- Ch

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