JUDGMENT

The appellant has filed the above appeal challenging the dismissal of their Section 17 application by the learned Arbitrator.

2. The brief facts which are necessary for considering the above application are herein below narrated:

(i) The appellant is engaged in the business of marketing, selling, distributing and servicing of automobiles in the State of Nepal. They were appointed as a dealer of the respondent, who in turn is engaged in the business of manufacturing, marketing, distributing and servicing of Motor Vehicles in the name of Royal Enfield. The Distributor Agreement was entered into on 09.02.2016. The distributorship was a non-exclusive one.

As per Clause 3 of the Agreement, the term of contract was fixed for a period of 2 years from the effective date of the contract and thereafter, the parties were free to extend the agreement from time to time on such term as may be mutually agreed in writing. If however on expiry of the term of agreement, the same is not extended in writing or neither party notifies to the other party that it does not wish to extend the term of the agreement, there is a deemed extension for a period of 3 months for each instance until the same is terminated in writing by either party or when an agreement is executed. The terms of agreement further provided that the party would agree upon a business plan immediately on signing of the agreement and such business plan should be executed atleast 3 months prior to the expiry of the term of the business plan every year. Therefore, the parties had to necessarily agree to a business plan every year and such business plan shall be in writing in the form specified in Annexure 3 of the agreement. Unlike in the case of the extension of the agreement, the business plan has to be extended in writing. Clause 15 of the Agreement provided for the termination of the contract.

(ii) It is the case of the appellant that pursuant to the execution of the agreement, they have been selling, marketing and distributing the products of the respondent and had increased the sales of the respondent's product. The original Agreement had come to end on 08.02.2018. Since neither party had intimated any intention to terminate the agreement or to extend it, the agreement was periodically extended by a period of 3 months each. The business plan was also being exetended every year. The parties were adhering to the yearly business plan as contemplated under Clause 4 of the Agreement.

(iii) It is the case of the appellant that they had incurred substantial expenses and costs for setting up the infrastructure, professional manpower, plan development etc., for effectively selling the respondent's products in the state of Nepal and also to ensure the growth and popularity of the respondent's brand. The annual sale of units of motorcycles of the respondent increased from 35 units in the FY (Financial Year) 2016 to 5200 units in the FY 2021, which would speak volumes about the work put in by the appellant. The agreement was being extended after the initial period for about 4 years. However, all of a sudden and out of the blue, the respondent, by a letter dated 07.03.2022 informed the appellant that they were not willing to continue the agreement and that the same would expire by 08.05.2022. In the said letter, the respondent had also stated that the appellant had misrepresented itself as an exclusive distributor of the respondent in the market, defaulted in payment of the requisite excise duty for importing motorcycle 400 CC category and raised inflated and forged invoices for stall charges at NADA Auto Show 2011 which had also prompted the termination.

(iv) The appellant would contend that the respondent itself had represented that the appellant was their sole and the exclusive distributor for the territory of Nepal. In a meeting held in March 2019, the respondent had agreed to the claimant using the expression “Sole Distributor” and requested the appellant to focus on market developme