Allowed

Ceevees Imaging and Healthcare Research Private Limited v. Siemens Ltd./ Seimens Healthcare

Kerala HC18 Nov 2022AR/32/2021

Case brief

AI extract

What is this about?

The High Court of Kerala held that the Purchase Order supersedes the Proforma Invoice regarding the arbitration venue. Consequently, despite the Proforma Invoice stating Mumbai, Ernakulam is the seat of arbitration. The Court exercised jurisdiction under Section 11(6) of the Arbitration and Conciliation Act, 1996, to appoint a sole arbitrator.

What did the court decide?

The Court appointed Mr. Justice P. R. Ramachandra Menon as the sole arbitrator and directed the Registry to communicate the order and obtain the disclosure statement.

Ceevees Imaging and Healthcare Research Private Limited Vs… — Arbitration | Kerala HC (2022)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE MR.JUSTICE N.NAGARESH

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FRIDAY, THE 18^TH DAY OF NOVEMBER 2022/27TH KARTHIKA, 1944 AR NO. 32 OF 2021

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PETITIONERS

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1 CEEVEES IMAGING AND HEALTHCARE RESEARCH PRIVATE LIMITED, VIII, 843, CEEVEES SADAN ANCHERICHIRA P.O., TRICHUR-680 006, KERALA, REPRESENTED BY DR.AJITH JOY. MANAGING DIRECTOR

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2 DR.AJITH JOY, MANAGING DIRECTOR, CEEVEES IMAGING AND HEALTHCARE RESEARCH PRIVATE LIMITED, VII, 843, CEEVEES SADAN ANCHERICHRA P.O., TRICHUR-680 006, KERALA.

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3 C.V.PAULSON, DIRECTOR COM CHAIRMAN, CEEVEES IMAGING AND HEALTHCARE RESEARCH PRIVATE LIMITED, VII, 843, CEEVEES SADAN, ANCHERICHIRA P.O., TRICHUR-680 006, KERALA.

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4 SMITHA AJITH, DIRECTOR, CEEVEES IMAGING AND HEALTHCARE RESEARCH PRIVATE LIMITED, VII, 843, CEEVEES SADAN, ANCHERICHIRA P.O., TRICHUR-680 006, KERALA.

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BY ADV. RAJIT

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RESPONDENTS

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1 SIEMENS LTD./SEIMENS HEALTHCARE UNIT NO.9 A, 9TH FLOOR, NORTH TOWER, GODREJ ONE, PIROJSHANAGAR, EASTERN EXPRESS HIGHWAY, VIKHROLI (E), MUMBAI, MUMBAI CITY MH-400 079.

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A.R. No.32/2021

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2 THE MANAGING DIRECTOR, SIEMENS LTD./SEIMENS HEALTHCARE, 33/2317, 5TH FLOOR, JOMER SYMPHONY, CHALIKKAVATTOM, PONNURUNNI NORTH, VYTTILA, COCHIN-682 019. BY ADVS. CHANDRASEKHAR P T.J.LAKSHMANAN IYER(K/730/1998) P.B.JEFIN(K/2568/2021) K.VIDYA(K/388/2008)

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THIS ARBITRATION REQUEST HAVING COME UP FOR ADMISSION ON 18.11.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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N. NAGARESH, J.

A.R. No.32 of 2021

Dated this the 18^th day of November, 2022

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O R D E R

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The petitioners, who had placed a purchase order from the respondents for procuring Biograph 6 True Point eco, seek to appoint any suitable person as Arbitrator so as

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to settle the dispute between the petitioners and the respondents.

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The petitioners placed the purchase order on 13.02.2016. It was agreed that an amount of ₹5,40,00,000/-

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towards cost of the main equipment and of accessories and installation charges would be paid by the petitioners. The equipment was to be delivered at the Cochin Centre.

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The machine, which was purchased by the petitioners, was not installed by the respondents in the premises suggested by the petitioners stating that there was inadequate power supply. In spite of repeated requests, the respondents did not install the machine.

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On 16.08.2018, due to a prolonged period of rain fall, water level increased and the premises where the machinery was placed by the employees of the respondents, was flooded. The machines became unusable. The petitioners sent Annexure-B notice of arbitration on 15.10.2020 requiring the respondents to immediately remove the package of the machinery and install machinery within 30 days failing which arbitration clause has to be invoked as mutually agreed. The respondents did not respond positively to Annexure-B.

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The petitioners state that there is an arbitration clause in the purchase order and the matter requires to be referred to an Arbitrator. The petitioners have issued arbitration notice. The respondents are trying to protract the

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matter. Substantial injury is caused to the petitioners and hence considering the facts and circumstances of the case, the dispute is to be referred to an Arbitrator appointed by this Court.

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The respondents resisted the A.R. filing counter affidavit. This Court has no territorial jurisdiction in the matter as the whole cause of action nor part of it have ever arisen within the Kerala State. The venue of arbitration indicated in the purchase order is intended for invoking protection measures under Section 9 of the Arbitration and Conciliation Act, 1996.

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The purchase order has to be read with proforma invoice. The proforma invoice categorically states that the place of arbitration shall be at Mumbai. An arbitration request is therefore maintainable only in Bombay High Court.

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The respondents denied all the material allegations made by the petitioners. The respondents have not received the arbitration notice said to have been sent by the petitioners. Proof of delivery of the notice has not been

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produced.

The counsel for the respondents relied on the judgment of the Apex Court in Indus Mobile Distribution Private Limited v. Datawind Innovations Private Limited

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and others [(2017) 7 SCC 678] to urge that where more than one court has jurisdiction, it is open for parties to exclude all other courts. In this case, the parties have decided Mumbai as the seat of arbitration. Therefore, the A.R. is not maintainable.

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Relying on the judgment in BGS SGS SOMA JV

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v. NHPC Limited [(2020) 4 SCC 234] , the counsel for the respondents submitted that when the parties have agreed Mumbai as the venue of arbitration, only the Bombay High Court has jurisdiction to entertain the petition filed under Section 11(6) of the Act. In this case, there is no confusion with regard to where the seat of arbitration should be. There is no shadow of doubt in the proforma invoice, argued the counsel for the respondents.

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I have heard the learned counsel for the

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petitioners and the learned counsel representing the respondents.

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The issuance of Annexure-A purchase order by the 1^st petitioner is not disputed. The arbitration clause in Annexure-A purchase order reads as follows:-

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ARBITRATION

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This contract shall be governed by Indian Laws. All disputes whatsoever which may arise hereto during continuance of this contract shall be referred to a sole arbitrator appointed mutually between the parties. The Arbitration shall be conducted in accordance with the Arbitration and Conciliation Act, 1996 for the time being in force or any statutory modification or re-enactment thereof.

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Each party shall be entitled to seek necessary and appropriate interim injunctive relief pending the outcome of the Arbitration or any other temporary measures from the Courts of competent jurisdiction at Ernakulam to enjoin the other Party from taking certain actions, which allegedly, infringe the rights of the Party bringing such claim, provided that any proceedings and decisions as to the merits of the dispute are exclusively governed and resolved by Arbitration in accordance with this clause.

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Annexure-A purchase order also states that the purchase

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order shall be read along with proforma invoice and that the

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terms and conditions of purchase order will supersede the

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specific relevant clauses, if any, in the offer.

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Annexure-B is the notice of arbitration sent by the petitioners. Annexure-B clearly indicates the intention to resolve the dispute through arbitration. The petitioners have, in fact, even suggested names of two Lawyers to be appointed as Arbitrator. Though the respondents would dispute receipt of Annexure-B notice, taking into consideration the entire facts of the case, I find no reason to believe that Annexure-B has not been sent to the respondents.

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The respondents would argue that since Annexure-R1(e) proforma invoice fixes Mumbai as the venue of arbitration, Mumbai should be treated as the seat of arbitration.

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Clause 17 of Annexure-R1(e) proforma invoice reads as follows:

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17. Arbitration

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Any dispute or difference or claim arising out of or in relation to this transaction including construction, validity performance or breach thereof shall, failing amicable settlement be referred to

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arbitration under Arbitration and Conciliation Act of 1996 and any subsequent amendments thereof for time being in force. The supplier shall appoint a Sole Arbitrator and it shall be binding on the Purchaser. Such arbitration shall take place in Mumbai. Award of the arbitrator shall be final and binding on parties.

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The cost of Arbitration shall be equally shared between the parties. The parties shall bear and pay their respective cost and expenses incurred in relation to arbitration.

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The Arbitral Award shall be the exclusive remedy of the Parties for all claims, counterclaims, issues or accounting presented to the Arbitrator.

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Each Party shall be entitled to seek necessary and appropriate interim injunctive relief pending the outcome of the Arbitration or any other temporary measures from the Courts of competent jurisdiction at Mumbai, to enjoin the other Party from taking certain actions, which allegedly, infringe the rights of the Party bringing such claim, provided that any proceedings and decisions as to the merits of the dispute are exclusively governed and resolved by Arbitration in accordance with this clause.

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The proforma invoice states that arbitration shall

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take place in Mumbai. Now, the issue is whether to rely on Annexure-A purchase order or Annexure-R1(e) proforma invoice, to decide the seat of arbitration.

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The arbitration clause in Annexure-A purchase order specifically states that in case of dispute, the same shall be referred to a sole Arbitrator appointed mutually

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between the parties and the arbitration shall be conducted in accordance with the Arbitration and Conciliation Act, 1996. The arbitration clause further states that each party shall be entitled to seek necessary and appropriate interim injunctive relief pending the outcome of the arbitration or any other temporary measures from the courts of competent jurisdiction at Ernakulam.

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Annexure-A further stipulates that the terms and conditions of Annexure-A purchase order shall be read along with the proforma invoice and that the terms and conditions of Annexure-A purchase order will supersede the specific relevant clauses, if any, in the offer letter.

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When Annexure-A categorically states that the parties have to approach the courts of competent jurisdiction at Ernakulam, I find no reason to assume that the parties intended the seat of arbitration to be somewhere else outside the State of Kerala. True, Annexure-R1(e) stipulates that arbitration shall take place in Mumbai. In this case, the substantial part of the cause of action arose in Ernakulam.

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The respondents were to deliver and install the machine at Ernakulam.

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The arbitration clause in Annexure-A

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unambiguously provide that the terms and conditions of the purchase order will supersede the specific relevant clauses, if any, in the offer. In the conspectus of facts and circumstances of the case, there can be only one conclusion that the parties have agreed to fix Ernakulam as the seat of arbitration.

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In view of the above findings, I hold that the Arbitration Request is maintainable before this Court and an Arbitrator has to be appointed as prayed for by the petitioners.

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The Arbitration Request is therefore ordered as

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follows:

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(i) Mr. Justice P. R. Ramachandra Menon is appointed as the sole Arbitrator, to arbitrate upon the disputes that have arisen between the petitioners and the respondents arising out of Annexure-A and AnnexureR1(e).

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(ii) The learned Arbitrator is at liberty to rule on his own jurisdiction, if the parties raise such a dispute.

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(iii) The Registry is directed to communicate a copy of this order to the learned Arbitrator within a period of ten days from today and to obtain a Statement of Disclosure from the learned Arbitrator as provided under Section 11(8) read with Section12(1) of the Act.

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(iv) Once the Disclosure Statement is obtained from the learned Arbitrator, the Registry shall issue the certified copy of this order to the learned Arbitrator, with a copy of the said statement appended to it, retaining the original of the same by this Court.

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(v) The learned Arbitrator shall decide the manner in which the fees and expenses of the arbitration proceeding has to be paid by the parties.

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(vi) The parties will appear before the learned Arbitrator on such date and place as decided by the learned Arbitrator.

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(vii) All contentions of the parties are left open to be raised before the learned Arbitrator.

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Sd/-

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N. NAGARESH, JUDGE

aks/15.11.2022

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APPENDIX OF AR 32/2021

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PETITIONERS’ ANNEXURES

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ANNEXURE A TRUE COPY OF THE PURCHASE ORDER DATED 13.02.2016. ANNEXURE B TRUE COPY OF THE LAWYER NOTICE DATED 15.10.2020 CAUSED TO BE SENT BY THE PETITIONERS. ANNEXURE 3 A TRUE COPY OF THE RECEIPT ISSUED BY THE HIGH COURT POST OFFICE DATED 16.10.2020 ANNEXURE 4 A TRUE COPY OF THE POSTMANS DELIVER SLIP FORWARDED BY THE POST OFFICE

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RESPONDENTS’ ANNEXURES

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ANNEXURE R1(A) TRUE COPY OF THE AUTORIZATION LETTER DATED 3/8/2022 ISSUED BY THE EXECUTIVE DIRECTOR - FINANCE AND OPERATION AND MANAGING DIRECTOR OF THE 1ST RESPONDENT. ANNEXURE R1(B) TRUE COPY OF THE TRANSFER FROM SL TO SHPL DATED 1/7/2016 JOINT DECLARATION DATED 6.5.2016. ANNEXURE R1(C) TRUE COPY OF THE JOINT DECLARATION DATED 19/8/2016.

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ANNEXURE R1(D) TRUE COPY OF THE PROFORMA INVOICE NO. 1-BBKF0V-0 DATED 10.2.2016 ANNEXURE R1(E) TRUE COPY OF THE PROFORMA INVOICE NO. 1-BBKFOV-0-I DATED 10.2.2016 ANNEXURE R1(F) TRUE COPY OF THE PROFORMA INVOICE NO. 1-BBKFOV-O-A DATED 10.2.2016. ANNEXURE R1(G) TRUE COPY OF THE PURCHASE ORDER NO. CIHR/PUR/0216/PETCT DATED 13.2.2016. ANNEXURE R1(H) TRUE COPY OF THE PURCHASE ORDER NO. CIHR/PUR/0216/PETCT/A DATED 13.2.2016. ANNEXURE R1(I) TRUE COPY OF THE PURCAHSE ORDER NO. CIHR/PUR/0216/PETCT/1 DATED 13.2.2016. ANNEXURE R1(J) TRUE COPY OF EMAIL DATED 3.11.2016 SENT

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BY THE RESPONDENTS TO THE PETITIONERS. ANNEXURE R1(K) TRUE COPIES OF THE EMAILS DATED 11.11.2016 TO 22.3.2017. ANNEXURE R1(L) TRUE PHOTOGRAPHS OF THE SITE WHERE THE EQUIPMENT IS TO BE INSTALLED. ANNEXURE R1(M) TRUE COPY OF DEEMED INSTALLATION LETTER DATED 24.1.2018.

Ceevees Imaging and Healthcare Research Private Limited v. Siemens Ltd./ Seimens Healthcare

Case brief

What is this about?

What did the court decide?

Ceevees Imaging and Healthcare Research Private Limited v. Siemens Ltd./ Seimens Healthcare

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

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