Advocates:
['S KARUNAMOORTHY', '', 'CHOUDHURYS LAW OFFICES', 'M/S ARUN C MOHAN', '', 'BRINDA MOHAN', 'VASUNDHARA ARUN']

C.M.A.No.2338 of 2022

IN THE HIGH COURT OF JUDICATURE AT MADRAS

DATED : 28.10.2022

CORAM

THE HONOURABLE Ms. JUSTICE P.T.ASHA

C.M.A.No.2338 of 2022

and C.M.P.No.18212 of 2022

Vivek Automobiles Private Limited,

Kanipath Kathmandu, Nepal

and also having its branch office at

11, Allenby Road, Kolkata-700 020.

... Appellant

Vs.

Eicher Motors Limited

3rd Floor, Select City Walk,

A-3 District Centre, Saket,

New Delhi-110 017

alo having its branch office at

Thiruvottiyur High Road,

Thiruvottiyur,

Chennai-600 019.

... Respondent

PRAYER : Appeal filed under Section 37(2)(b) of the Arbitration and

Conciliation Act, 1996, against the orders of the learned Arbitral Tribunal

dated 12.09.2022 passed in M.A.No.21 of 2022 in Arbitration Case No.4 of

2022 received by the Appellant on 22.09.2022.

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C.M.A.No.2338 of 2022

For Petitioners : Mr.A.R.Ramanathan

for Mr.S.Karunamoorthy

For Respondent :Mr.Vijay Narayan

Senior Counsel

for Mr.Arun C.Mohan

Caveator counsel for sole respondent

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.

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C.M.A.No.2338 of 2022

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.

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C.M.A.No.2338 of 2022

(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