The court upheld the validity of the arbitration clause in the franchise agreement and rejected the application of the TRAI Act, 1997 to the dispute.

JUDGMENT

Vineet Saran, C.J. - The petitioner entered into a franchise agreement with opposite party-Tata Tele Services Limited (for short, 'TTSL') on 29.12.2006, which is admittedly still in force. The dispute arose with regard to nonpayment of the rent and franchisee fees to the petitioner. The petitioner thus sent notice dated 16.08.2016 to the opposite party for appointment of an Arbitrator under Article 19 of the agreement, which reads as under:

"19.1: Without prejudice to the provision hereof, in the event of any dispute, difference, conflict or question arising between the parties hereto relating to or concerning or arising out of this agreement, the same shall be referred to the sole arbitration of the person as nominated by both parties whose decision shall be final and binding on the parties.

19.2 Parties shall be governed by the Arbitration and Conciliation Act, 1996 and the arbitration proceedings shall be held in Bhubaneswar. The Arbitrator shall have summary powers and he shall not be bound to give any reasons for his holdings."

2. Since no reply to the said notice was received by the petitioner, she has filed this Arbitration petition praying for appointment of an Arbitrator.

3. Though the opposite party has put in appearance, but learned counsel for the opposite party states that the opposite party does not wish to file any counter affidavit, which submission has also been recorded in the order dated 03.11.2017. As such, from the record it is clear that the opposite party has neither given its reply to the notice issued by the petitioner for appointment of Arbitrator nor has filed any counter affidavit.

4. Heard Shri K.A. Guru, learned counsel for the petitioner and Shri S.K. Mohanty, learned counsel for the opposite party and perused the record.

5. The fact that the petitioner and the opposite party had entered into the franchisee agreement dated 29.12.2006 whereby the opposite party had appointed the petitioner as franchisee, is not in dispute. Article 19 of the agreement, as quoted above, relates to appointment of an Arbitrator.

6. Learned counsel for the petitioner has submitted that in view of the fact that there is a dispute between the parties and the agreement provides for resolution of dispute by way of arbitration, and, the when the opposite party has not responded to the notice for appointment of Arbitrator, this Court may now appoint an Arbitrator for resolution of the dispute.

7. Learned counsel for the opposite party has contended that in view of section 14 of the Telecom Regulatory Authority Of India Act, 1997 (hereinafter referred to as "the TRAI Act, 1997"), the Telecom Dispute Settlement and Appellate Tribunal would be the appropriate authority to decide the dispute and appointment of an Arbitrator would not be appropriate in the facts and circumstances of the present case.

8. A bare perusal of Section 14 of the TRAI Act, 1997 would make it clear that the Telecom Dispute Settlement and Appellate Tribunal has been constituted to adjudicate any dispute between the licenser and the licensee, or between two or more service providers.

9. According to the learned counsel for the opposite parties, the present case should be treated as a dispute between the licenser and the licensee as, in fact, the petitioner is a licensee of the opposite party.

10. Admittedly, the opposite party-TTSL has been granted licence by the Department of Telecommunication and thereafter it has appointed the petitioner as its franchisee for promotion of telecom services to be provided by the opposite party. The heading of the agreement describes it to be a "Franchise Agreement" and in the body of the agreement also petitioner has been described as 'franchisee' and not licensee.

11. Considering the nature of the agreement between the parties, which has been filed as Annexure-1 to this petition, I am of the opinion that the same cannot be treated as an agreement between the licenser and the licensee, and the same is only an agree