THE HIGH COURT OF DELHI AT NEW DELHI

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Judgment delivered on: 26.8.2016

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O.M.P.(I) (COMM.) 153/2016 & CRL.M.A. Nos.9221/2016,

10230/2016 & lA No.6008/2016

BENARA BEARINGS & PISTONS LTD.

.....Petitioner

versus

MAHLE ENGINE COMPONENTS INDIA

PVT. LTD.

.....Respondent

Advocates who appeared in this case:

For the Petitioner

:Mr Rajiv Nayar, Senior Advocate with Mr

Kartik Nayar, Mr Rishab Kumar, Mr Sourabh

Seth, Mr Shivanshu Pandya, Mohammad Umar

Iqbal Khan, Mr Prakhar Deep, and Ms Sonali

Mehta.

For the Respondent

: Mr Arvind Nigam, Senior Advocate with Mr

Sudhir Sharma, Mr Sanjeev Sharma, Mr

Abhishek Swaroop, Mr Anirudh Gandhi &

Ms Abhilasha Vij.

CORAM:-

HON’BLE MR JUSTICE VIBHU BAKHRU

JUDGMENT

VIBHU BAKHRU, J

Introduction

1.

The Petitioner, Benara Bearings & Pistons Ltd. (hereafter 'Benara'),

is an Indian Company and is engaged in the manufacture and sale of

automotive parts including Pistons, Piston Pins, Piston Rings, Engine

Bearings and Bushes, Cylinder Liners and Sleeves, Air Cooled Blocks. The

2016:DHC:6019

Respondent, Mahle Engine Components India Pvt. Ltd. (hereafter 'Mahle')

is an Indian Company and is, inter alia, engaged in the manufacturing of

engine components for automotive and off-road vehicles. Benara claims

that it has entered into a Distribution Agreement dated 17.03.2016

(hereafter 'Distribution Agreement‟) with Mahle for exclusively distributing

Mahle's specified products in India; Mahle disputes this and contends that

although discussions and negotiations were held with Benara, they could

not arrive at a consensus and Mahle withdrew from the 'exercise' on

21.04.2016 and communicated the same to Benara.

2.

Mahle has also imported a container of automotive parts (Container

No. TEMU 682858-2 (hereafter „the Container‟)) which it intends to sell in

India.

3.

In the aforesaid context, Benara has filed the present petition under

Section 9 of the Arbitration and Conciliation Act, 1996 (hereafter 'the Act'),

inter alia, praying that Mahle be restrained from terminating the Contract

or acting in furtherance of its communication dated 21.04.2016. Benara

further prays that Mahle be restrained from dealing with automotive parts -

which are presently stuffed in the Container - imported by Mahle. In

substance, Benara seeks specific performance of the Contract and thereby

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seeks to restrain Mahle from effectively carrying on any business of selling

automotive parts in India except through Benara as its exclusive distributor.

Factual Background

4.

In terms of an agreement dated 21.11.2006, Mahle Trading

(Shanghai) Co Ltd. - a company incorporated in China and engaged in

manufacture of automotive parts - appointed Benara as its authorized

distributor of motor cycle pistons (qua 2 and 3 wheeler applications upto

500 CC.) in the territories of India, Nepal, Sri Lanka and Bangladesh. The

said distribution agreement was valid for a period of five years from

January 2007 to December 2011. Benara claims that the said Agreement

was renewed even after 2011.

5.

Thereafter, on 01.01.2014, Mahle (which is the Indian Arm of the

Mahle group) entered into a Distribution Agreement with Benara. In terms

of that agreement, Benara was appointed as an exclusive distributor for the

territory of India in respect of certain specified products (hereafter „Mahle

products‟); and, Mahle agreed not to appoint or seek to appoint any other

retailer or dealer in the territory of India. The term of the said Agreement

was one year, that is, till 31.12.2014. Clause 7.2 of the said

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Agreement further provided for an automatic renewal of the Agreement for

an additional period of one year and thereafter, unless either party gave a

notice six months prior to the expiry of the term.

6.

On 24.06.2015, Mahle gave a notice to Benara in terms of clause 7.2

of the aforemen