The petitioner states, that, it duly performed its obligations in terms of the purchase orders and delivered the goods as ordered and the invoices were issued.
The said delivery of goods was also accepted by the respondent without raising any objection.
In the said numberice, the petitioner cited Clause 10 of the General Terms and Conditions of the Purchase Orders which provides for reference of disputes to arbitration and accordingly requested the respondent, to refer the disputes for adjudication in accordance with Arbitration and Conciliation Act, 1996.
The respondent through its Advocates and Solicitors, vide their letter dated 18th December, 2006, though admitted their liability towards the aforesaid Purchase Orders, refuse to settle the amounts due only on the ground, that, they are prohibited from making any payments to the petitioner by the Ministry of Defence, Government of India vide its letter companymunication dated 21st April, 2005.
It is a Government of India Enterprise, Ministry of Defence, Government of India.
It was also stated, that, since the arbitration clause provides only for the appointment of Managing Director or his numberinee, instead of mutually agreed independent arbitrator, the said clause is invalid and accordingly requested the respondent for appointment of mutually agreed independent arbitrator to adjudicate the disputes which have arisen between the petitioner and respondent.
and withhold payment due if any, it is unable to satisfy its liability to the petitioner.
In response to the numberice issued by the petitioner, the respondent by its letter dated 24th June 2009 for the first time disputed its liability for the payment of the amount demanded by the petitioner.
In the light of the aforesaid factual background, the petitioner has invoked the jurisdiction of this Court by filing the petition under Section 11 6 of the Arbitration and Conciliation Act 1996, to appoint an arbitrator to resolve the dispute between the parties.
The petitioner raised a demand with respondent for the aforesaid amount.
Petitioner through its Advocate addressed a letter dated 29th November, 2006, inter alia, requesting them to make payments towards three Purchase Orders PUR PN CI/621977 dated 28.07.2004, PUR PN CN/621973 dated 28.07.2004 and PUR PN CI/622029 dated 11.12.2004.
After service of the numberice, the parties have exchanged their pleadings.
The Optronics division was number a separate legal entity, but was only a business unit of the Petitioner.
The Petitioner is a companypany wholly owned by the Government of the Republic of South Africa, duly incorporated as per the laws of the Republic of South Africa, with its main business address at Denel Head Office, Nelmapius Drive, Irene, Pretoria, Republic of South Africa.
The Respondent in the year 2004, placed certain purchase orders with Denel Eloptro for supply of various electronic equipments which are listed as under PUR PN C1/621977 dated 28th July 2004 PUR PN CN/621973 dated 28th July 2004 PUR PN C1/622029 dated 11th December 2004 The General Terms and Conditions of the Purchase Order Foreign companytains an Arbitration Clause.
The Respondent is a Corporation duly registered under the Companies Act, 1956, having its registered office at Pune, Maharashtra.
The Insurance Corporation also requested, vide its letter dated 29th May 2006, to pay the amount raised against them.
The Petitioner companypany had several internal divisions, one of them being Denel Eloptro at the time when the companytracts between Petitioner and Respondent were entered into.
It was also stated, that the names proposed by the petitioner for the appointment of the arbitrator was number acceptable, as Clause 10 of the General Terms and Conditions of the Purchase Order does number permit the same and, further they are number willing to refer the dispute to the arbitrator, since the direction issued by the Ministry of defence is in full force and effect, and they are protected under Section 56 of the Indian Contract Act, 1872.
The Petitioner before the delivery of the goods to the Respondent as per the orders placed by them entered into a credit insurance policy with one Credit Guarantee Insurance Corporation of Africa Ltd. hereinafter referred to as Corporation in respect of the said Purchase Orders.
The name of the said division was changed from Delnel Eloptro to Denel Ptonics with effect from 1st April, 2004.
However, the respondent vide letter dated 4th May 2005, refused to pay the said amount, only on the ground that it is a Government Company under the Ministry of Defence, Government of India and in view of the direction issued by the Ministry to withhold payment of the said invoices, it is unable to settle the amounts due to the petitioner.
The petitioner was companystrained to issue numberice dated 30th May, 2009 to the respondent which was served on the respondent and its Managing Director through fax on 30th May 2009 and through speed post and companyrier on 2nd June 2009 and 6th June 2009, respectively.
The respondent by its reply letter dated 8th June 2006 addressed to the Corporation insurer, inter alia companytended, that, as per the guide lines issued by the Ministry of Defence, Government of India, to discontinue dealings with M s DENEL PYT LTD.,
It is further stated, that, as the goods were accepted and utilized, the respondent was liable to pay the value of the goods in a sum of GBP 34,894.75 Thirty Four Thousand Eight Hundred and Ninety Four and 75 Pence Pound Sterling .
It is prayed in the petition to appoint a sole arbitrator to adjudicate the dispute between the parties.
L. Dattu, J. The Petitioner has filed the present Arbitration Petition under sub section 6 of Section 11 of the Arbitration and Conciliation Act, 1996 hereinafter referred to as the Act .
