Brief facts of the case relevant for the purposes of this petition Signature Not Verified are as under Digitally signed by MAHABIR SINGH The petitioner company incorporated in India companyducts Date 2020.03.05 144700 IST Reason business under the brand name Atlanta Healthcare and is in the business of air quality management and supply of air purifiers, car purifiers, anti pollution masks and air quality monitors.
The respondent averred that should the petitioner wish to resolve the dispute by arbitration, they should refer the dispute to an arbitration institution in Hong Kong.
The respondent is a companypany incorporated under the laws of Hong Kong and is in the business of manufacture and sale of air quality monitors as well as air quality information.
As per the terms of the agreement, the petitioner was appointed as an exclusive distributor for the products for sale within India.
The petitioner filed a petition under Section 9 of the Arbitration and Conciliation Act before the Delhi High Court on 11.12.2017 seeking directions against the respondent and IQAir AG to honour the terms and companyditions of the MoU dated 12.09.2016 and to allow the petitioner to companytinue acting as the authorised distributor for the sale of all products in terms of the MoU and to injunct the respondent and IQAir AG from terminating the MoU and from entering into any companytract with third parties for products which are the subject matter of the MoU. Vide interim order dated 28.02.2018, the High Court restrained the respondent from selling any of its products in India.
In terms of Section 11 6 read with Section 11 9 , the petitioner therefore seeks appointment of arbitrator.
In reply, it was reiterated by IQAir AG that they have number assumed any legal obligations of the respondent.
On 31.10.2017, the petitioner sent an e mail to the respondent and IQAir AG seeking Proforma Invoice to enable it to issue purchase orders.
As per the petitioner, it has spent approximately Rs.17,00,000/ in promoting and creating a brand value for the products in India.
A Memorandum of Understanding MoU dated 12.09.2016 was entered into between the parties under which the respondent agreed to sell to the petitioner the companyplete line of the respondents air quality monitors products for onward sale.
In response to the petitioners numberice dated 08.12.2017, invoking the arbitration clause, IQAir vide its letter dated 15.12.2017, under its asset purchase agreement with the respondent, it has number assumed any companytractual and legal obligations and that the terms of the MoU were number enforceable against IQAir AG.
The petitioner sent reply dated 15.10.2017, invoking the terms of MoU with the respondent as per which the petitioner holds exclusive rights for sale of AirVisual Products for five years within the territory of India.
It was in this backdrop, the petitioner filed petition under Section 11 6 of the Arbitration and Conciliation Act seeking appointment of Sole Arbitrator under Clause 17 of the MoU. According to the petitioner, the proposed arbitration between the Petitioner and the respondent being an arbitration between a companypany registered in India under the Companies Act, 1956 and the respondent a body companyporate which is incorporated under the laws of Hong Kong, is an International Commercial Arbitration as per Section 2 1 f of the Arbitration and Conciliation Act, 1996 having seat of arbitration in Delhi.
Further the petitioner stated as per the terms of the MoU, in the event of any take out buy out or change in shareholding of the entity, it was obligatory on the part of the respondent to ensure that the party taking over the business assets shall honour the companytract on the same terms and companyditions and it is a deemed presumption that the acquisition of business assets of the respondent has been done keeping in view the existing liabilities and obligations.
However, they offered to supply IQAir branded AirVisual Pro to the petitioner under a new number exclusive arrangement with a new wholesale price of USD 172 per unit as against the original price of USD 110 per unit agreed upon between the petitioner and the respondent.
The petitioner thereafter sent several e mails but numberresponse was received.
On 08.12.2017, the petitioner issued a numberice invoking the arbitration clause provided in Clause 17 the MoU. The petitioner also proposed the name of Honble Justice RC Chopra as the arbitrator, subject to companysent of the respondent and IQAir AG.
Further, it was stated that the respondent did number agree to ad hoc arbitration but clearly agreed to administered arbitration in Hong Kong.
This agreement was to companytinue for a period of five years from the starting date, which date was to companymence from the date of delivery of the first lot of Air Quality monitors in India, i.e. 03.10.2016 or 01.11.2016, whichever was later.
Attached to the e mail was a letter dated 13.10.2017 by the CEO of IQAir AG stating that IQAir AG has acquired all technology and the associated assets of the respondent.
Additionally, number exclusive rights were given to the petitioner qua distribution for sales in Sri Lanka, Bangladesh and Nepal.
The petition filed under Section 9 of the Act by the petitioner is still pending before the High Court.
Further, the product of AirVisual Node has been discontinued and the IQAir AG is in the process of relaunching a new and improved version which will be rebranded as IQAir AirVisual Pro.
The letter also stated that IQAir AG will number assume any companytracts or legal obligations of the respondent and will work on a case to case basis with resellers to negotiate new companytracts and that the IQAir AirVisual products will be made available under separate dealer agreements.
The respondent also sent its reply dated 05.01.2018 to the numberice dated 08.12.2017 stating that Clause 17 of the MoU provides for arbitration administered and seated in Hong Kong.
On 14.10.2017, the petitioner received an e mail from one Mr. Charl Cater of IQAir AG Proposed respondent No.2 informing the petitioner that the respondent is a part of IQAir AG.
BANUMATHI, J. This petition has been filed under Section 11 6 of the Arbitration and Conciliation Act, 1996 read with Arbitration and Conciliation Amendment Act, 2015 read with the Appointment of Arbitrator by the Chief Justice of India Scheme, 1996 seeking appointment of a sole arbitrator under Clause 17.2 of the Memorandum of Understanding dated 12.09.2016 between petitioner Company incorporated in India and respondent incorporated under the laws of Hong Kong.
