Allowed

Hector Beverages Private Limited v. Clarion Beverages

Karnataka HC4 Dec 2023CMP/95/2023

Case brief

AI extract

What is this about?

The court allowed a petition under Section 11(6) of the Arbitration Act, 1996, for appointing a sole arbitrator to resolve disputes arising from a Settlement Agreement. The Court appointed Sri. Kukkaje Ramakrishna Bhat as the sole arbitrator and directed the order be communicated to the respective parties and the Centre.

What did the court decide?

Appointment of Sri. Kukkaje Ramakrishna Bhat as sole arbitrator and direction to communicate the appointment order.

Hector Beverages Private Limited Vs Clarion Beverages — Arbitration | Karnataka HC (2023)

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NC: 2023:KHC:43585 CMP No. 95 of 2023

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 4^TH DAY OF DECEMBER, 2023 BEFORE

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THE HON'BLE MR JUSTICE B M SHYAM PRASAD CIVIL MISC. PETITION NO. 95 OF 2023

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BETWEEN:

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HECTOR BEVERAGES PRIVATE LIMITED A COMPANY INCORPRATED UNDER THE COMPANIES ACT, 2013 HAVING ITS REGISTERED OFFICE AT PLOT NO 132, SECTOR , IMT MANESAR GURGAON. HARYANA 122050 REPRESENTED BY ITS AUTHORIZED SIGNATORY KARTHIK RAMA.

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…PETITIONER

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(BY SRI. A S VISHWAJITH.,ADVOCATE AND SRI. ABHISHEK WADIYAR, ADVOCATE) AND:

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Digitally signed by NARASIMHA MURTHY VANAMALA Location: HIGH COURT OF KARNATAKA

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CLARION BEVERAGES A PARTNERSHIP FIRM HAVING ITS OFFICE AT 156/B, IMAMPUR VILLAGE, TOOPRAN MANDAL, TALANANA REPRESENTED BY ITS PARTNER KANISHK GUPTA.

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…RESPONDENT

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(BY SRI. VISHAKH NAG K M.,ADVOCATE)

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NC: 2023:KHC:43585 CMP No. 95 of 2023

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THIS CIVIL MISC. PETITION IS FILED UNDER SECTION 11(6) OF THE ARBITRATION AND CONCILIATION ACT, 1996, PRAYING TO APPOINT A SOLE ARBITRATOR FOR ADJUDICATION OF DIFFERENCES AND DISPUTES (BEING THE CLAIMS OF PETITIONER AGAINST RESPONDENT) ARISING FROM CLAUSES 10 AND 11 OF THE SETTLEMENT AGREEMENT DATED 20 JULY 2021 (ANNEXURE B) BETWEEN THE PARTIES.

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THIS PETITION, COMING ON FOR ADMISSION, THIS DAY, THE COURT MADE THE FOLLOWING:

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ORDER

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This petition is filed for appointment of a sole Arbitrator relying upon the agreement for arbitration as contained in the Settlement Agreement dated 20.07.2021¹ [Settlement Agreement]. The agreement for arbitration is contained in Clauses 10 and 11 of the Settlement Agreement, and these clauses read as under:

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“The parties agree that in case of any dispute arising in respect of this Agreement, the matter

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1 The agreement reads that this agreement shall come into retrospective effect from 01.04.2021.

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NC: 2023:KHC:43585 CMP No. 95 of 2023

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shall be referred for conciliation. The conciliation panel would consist of one representative each of Hector and Clarion. If the dispute remains unresolved for a period of 21(twenty-one) days thereafter, then the same shall be referred to arbitration by a sole arbitrator, to be jointly appointed by both Parties. The Arbitration shall be as per the provisions of the Indian Arbitration and Conciliation Act, 1996, as may be amended from time to time. The decision of the arbitrator so appointed shall be binding upon Hector and Clarion.

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The proceedings shall be held at Bangalore and conducted in the English language. Subject to Clause 10, the Courts in Bangalore shall alone have jurisdiction. This Agreement shall be governed by Indian law.”

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This petition is filed after issuance of the arbitration notice dated 18.11.2022 and undisputedly, the respondent has not issued any response to this notice. The learned counsels for the parties are heard for final disposal of the petition.

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NC: 2023:KHC:43585 CMP No. 95 of 2023

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It emerges from the rival submissions that the petitioner and the respondent, who have entered into Manufacturing, Supply and Packaging Agreement dated 01.12.2018, have signed this Settlement Agreement settling the disputes under the aforesaid Agreement dated 01.12.2018, and in terms of the settlement, the respondent is permitted to retain the amount paid under the Agreement dated 01.12.2018 in consideration of the respondent agreeing not to engage with the petitioner’s competitor for a period of twenty seven [27] months from 01.04.2021 as mentioned in Clause-2 of this agreement.

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The petitioner and the respondent have simultaneously entered into Leave and License Agreement dated 20.07.2021 under which the petitioner is permitted to utilize the respondent’s premises for its business operations, and with certain disputes having arisen between the petitioner and the respondent as regards the aforesaid Leave and

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NC: 2023:KHC:43585 CMP No. 95 of 2023

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License Arrangement, the respondent has commenced arbitral proceedings under Section 11 of the Arbitration and Conciliation Act, 1996 [ Arbitration Act ] with the Telangana High Court in A.A. No.182/2022 which has resulted in the constitution of the Arbitral Tribunal with both the petitioner and the respondent filing their respective claims.

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In the light of the afore, the learned

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counsel for the respondent, Sri Vishakh Nag K M, submits that the dispute must be settled in the arbitral proceedings commenced in the Telangana High Court and that the agreement for arbitration in the Settlement Agreement must be accordingly construed. Sri Vishakh Nag K M also contends that the dispute raised would be part of the dispute pending arbitration in the proceedings before the Tribunal constituted by the High Court of Telangana to be refuted by the learned counsel for the petitioner

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NC: 2023:KHC:43585 CMP No. 95 of 2023

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contending that no claim under this agreement is pending adjudication in the aforesaid proceedings.

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The assertion that the agreement for arbitration must be construed as contemplating resolution of dispute by arbitration under agreement for arbitration under the Leave and Licence Agreement dated 20.07.2021 is rather stretched and cannot be accepted in the light of the terms agreed to in writing. The agreement for arbitration in the Settlement Agreement stipulates that any dispute arising in respect of this Settlement Agreement dated 20.07.2021 must be resolved by a sole Arbitrator and the proceedings must be held in Bengaluru with Courts in Bengaluru having jurisdiction.

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The respondent cannot succeed on the first objection, and insofar as the second objection, this Court is of the considered view that the same must be examined in the arbitral proceedings but cannot be a reason to reject the present application.

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NC: 2023:KHC:43585 CMP No. 95 of 2023

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Hence, with all just liberties in this regard to the parties, the petition is allowed by the following order. After hearing the learned counsel for the parties on who could enter reference of the dispute in view of the petitioner not mentioning its nominee Arbitrator, the following:

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ORDER

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[a] The petition is allowed.

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[b] Sri. Kukkaje Ramakrishna Bhat, a retired District Judge, is appointed as the sole Arbitrator to enter reference of the dispute between the petitioner and the respondent and conduct the proceeding at

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the Arbitration and Conciliation Centre (Domestic and International), Bengaluru according to the Rules governing the Centre.

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[c] The Registry is directed to communicate this order [by E-mail] to the

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NC: 2023:KHC:43585 CMP No. 95 of 2023

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Arbitration and Conciliation Centre (Domestic and International), Bengaluru, and Sri. Kukkaje Ramakrishna Bhat, a retired District Judge, Address: No.2, 1st Cross, Judicial Layout, Sanjaynagar, RMV II Stage, Bengaluru – 560 094 [Email: [email protected]], as required under the Appointment of Arbitrators by the Chief Justice of Karnataka High Court Scheme, 1996.

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SD/JUDGE

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AN/-

Hector Beverages Private Limited v. Clarion Beverages

Case brief

What is this about?

What did the court decide?

Hector Beverages Private Limited v. Clarion Beverages

Case brief

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