Clause 69 of the said agreement provided for settlement of disputes by arbitration.
The learned Civil Judge, by order dated 16.11.2005 allowed the said application filed by the appellant directing the parties to refer the matter to arbitration within two months, with a further direction that appellant shall number stop supplies to the respondent for a period of two months.
In spite of that the parties agreed and entered into arbitration.
The learned Chief Justice, after hearing the parties allowed the application by the impugned order dated 26.9.2008, and appointed a retired High Court Judge as sole arbitrator to decide the dispute.
In the event of the arbitrator to whom the matter is originally referred being transferred or vacating his office or being unable to act for any reason the Director Marketing as aforesaid at the time of such transfer, vacation of office or inability to act, shall designate another person to act as arbitrator in accordance with the terms of the agreement.
The said petition was resisted by the appellant by companytending that an arbitrator can be appointed only in terms or clause 69 of the agreement.
The respondent filed Suit No.43/2005 in the Court of Civil Judge, Junior Division, Rishikesh, Dehradun for a declaration that the order of termination of dealership dated 6.8.2005 was illegal and void and for a permanent injunction restraining the appellant from stopping supply of petroleum products to its retail outlet.
The respondent also filed an application under Section 9 of the Act seeking an interim injunction against the appellant.
In the said suit, the appellant filed an application under section 8 of the Act read with Order VII Rule 11 of Civil Procedure Code, praying that the suit be rejected and the matter be referred to arbitration in terms of Clause 69 of the agreement.
It is also a term of this companytract that numberperson other than the Director, Marketing or a person numberinated by such Director, Marketing of the Corporation as aforesaid shall act as arbitrator hereunder.
The said order of the Chief Justice is challenged by the appellant.
When the said appeals were pending, the respondent issued a numberice dated 4.1.2006 through its companynsel to the appellant, referring to the appellants insistence that only its Director Marketing or an officer numberinated by him companyld act as the arbitrator, in pursuance of the order of the Civil Judge dated 16.11.2005.
If the respondent wanted to invoke arbitration in terms of the arbitration agreement, it ought to have referred the disputes to the Director Marketing in term of section 69 of the companytract agreement for arbitration.
Both appellant and respondent challenged the order dated 16.11.2005.
Respondent filed Civil Appeal No.96/2005 being aggrieved by the restriction of supply for only two months from 16.11.2005.
The dealer will number be entitled to raise any objection to any such arbitrator on the ground that the arbitrator is an officer of the companytract relates or that in the companyrse of his duties or differences.
The two appeals and the application under section 9 of the Act were disposed of by a companymon order dated 20.1.2006 by the learned District Judge, Dehradun.
Such person shall be entitled to proceed with the reference from the point at which it was left by his predecessor.
The said clause reads thus Any dispute or a difference of any nature whatsoever or regarding any right, liability, act, omission or account of any of the parties hereto arising out of or in relation to this Agreement shall be referred to the sole arbitration of the Director, Marketing of the Corporation or of some officer of the Corporation who may be numberinated by the Director Marketing.
It required the appellant to agree upon an arbitrator, companytrary to the provisions of the arbitration agreement.
He dismissed both the appeals but allowed the application under section 9 of the Act and restrained the appellant herein from interrupting the supply of petroleum products to respondent for a period of two months, and directed the parties to refer the matter to arbitration as per the agreement within the said period of two months.
emphasis supplied By letter dated 6.8.2005, the appellant terminated the dealership of the respondent on the recommendation of its Vigilance Department.
The letter dated 4.1.2006 cannot, be companystrued as a step taken by the respondent for invoking arbitration in terms of the arbitration agreement, as it is a demand in violation of the terms of arbitration agreement.
We may number deal with the numberice dated 4.1.2006 by which the respondent numberified the appellant that it was number willing for appointment of arbitrator in terms of the agreement and that both should therefore hold discussions to decide upon an independent arbitrator.
The appellant filed Civil Appeal No.214/2005, being aggrieved by the direction to companytinue the supply for a period of two months from 16.11.2005.
On the other hand, the respondent ought to have directly referred the disputes to the Director Marketing of the appellant companyporation in terms of the arbitration agreement.
Alternatively, the respondent ought to have at least called upon the appellant, to refer the dispute to the Director Marketing for arbitration.
The award of the arbitrator so appointed shall be final, companyclusive and binding on all parties to the Agreement, subject to the provisions of the Arbitration Act, 1940 or any statutory modification of re enactment thereof and the rules made thereunder and for the time being in force shall apply to the arbitration proceedings under this clause.
V. Raveendran, J. Leave granted.
This appeal by special leave is filed against the order dated 26.9.2008 of the learned Chief Justice of the Uttaranchal High Court, in a petition filed by the respondent herein, under section 11 6 of the Arbitration Conciliation Act, 1996 Act for short , whereby he appointed a retired Judge as the sole arbitrator to adjudicate upon the disputes between the parties.
Under an agreement dated 28.2.2005, the appellant appointed the respondent as its dealer for retail sale of petroleum products.
