Petition under Section 11(6) to appoint an arbitrator for disputes over unpaid royalty under a Vendor Agreement, after respondents failed to respond despite substituted service. Court appointed Mr.K.Sridhar as sole arbitrator.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
Arb.O.P.(Comm.Div.) No.232 of 2024
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED:19.12.2024
CORAM
THE HONOURABLE MR.JUSTICE P.B.BALAJI
Arb.O.P.(Comm.Div.) No.232 of 2024
M/s.Compass India Food Services Private Limited, (Formerly known as Compass Group (India) Support Services Private Limited) Through its Authorized Representative, Mr. Naresh Kumawat.
... Petitioner
vs.
... Respondents
PRAYER : Arbitration Original Petition filed under Sections 11 (6) of the Arbitration and Conciliation Act, 1996 to appoint an independent and impartial arbitrator as provided under Clause 5.5 of the Agreement.
1/8
Arb.O.P.(Comm.Div.) No.232 of 2024
For Petitioner : Mr.Prahalad K. Bhat
For Respondents : No Appearance.
ORDER
This Arbitration Original Petition has been filed under Section 11(6)
of the Arbitration and Conciliation Act, 1996 (hereinafter called as 'the Act') to appoint an Arbitrator in respect of the dispute arising out of alleged violation of the Vendor Agreement dated 01.06.2016 between the petitioner and the respondents.
petitioner. There is no appearance on the side of the respondents. In fact, this Court permitted effecting service on the respondents through Substituted Service and publication has also been effected pursuant to the order of this Court dated 29.11.2024 for the hearing dated 17.12.2024. Despite the publications in one issue of Telangana Today (English) and
2/8
Arb.O.P.(Comm.Div.) No.232 of 2024
Andhra Jyoti (Telugu) respectively, the publication dated 07.12.2024, the respondents have neither chosen to appear in person nor through counsel. Though this Court has directed the Registry to print the name of the respondents in the High Court daily cause-list on 17.12.2024 and to post the matter under the caption 'for orders'. Today also, there is no representation on the side of the respondents. Therefore, the respondents are hereby set exparte.
Mr.Prahalad K. Bhat and also perused the records.
the petitioner for providing services/products under the Rules, Regulations and directions of the Petitioner. On 01.06.2016, a Vendor Agreement for the supply of Services/Products was entered into between the respondents and the petitioner which was valid for a period of one year and thereafter,
3/8
Arb.O.P.(Comm.Div.) No.232 of 2024
the aforesaid agreement was renewed from time to time. On 01.03.2019, the
said Vendor Agreement executed between the parties was amended , modifying the commercial terms. As per Clause 2 of the Agreement, the respondents should pay the fixed royalty amount on a monthly basis, but the respondents failed to pay any amount to the petitioner. Due to the nonpayment of the outstanding royalty amount to the petitioner, a dispute exists between the parties which requires to be adjudicated by a sole Arbitrator as per the Clause 5.5 of the Agreement. The relevant portion of Clause 5.5 of the Agreement is set out below:-
“5. Other terms and conditions
5.5 Any dispute or difference or claim arising out of this Agreement shall be settled by senior management discussion. If the dispute remains unresolved for a period of thirty (30) days, the Parties may refer the matter to arbitration by a single arbitrator under the Arbitration and Conciliation Act, 1996. The Arbitration proceedings shall be in English. The decision of the arbitrator shall be final and binding on the Parties. This Agreement shall be governed by the laws of India and the courts in Chennai shall have exclusive jurisdiction in the event ofany dispute between the parties. ”
4/8
Arb.O.P.(Comm.Div.) No.232 of 2024
Demand Notice on 06.10.2021 to the respondents to make the payment of outstanding royalty amount. Despite receipt of the same, the respondents failed to make the said payment. Thereafter on 15.03.2023, the petitioner has issued an invocation notice under Section 21 of the Act but the respondents have not replied to the said notice. Thereafter, the above Arbitration Original Petition has been filed. Even before this Court, the respondents have not chosen to appear despite attempts made by the petitioner to serve notice and finally substituted service was permitted and the same was also effected.
5/8
Arb.O.P.(Comm.Div.) No.232 of 2024
Mr.K.Sridhar, Advocate having address at No.7/153, Lotus Colony, 'N' Block, 2nd Main Road, Anna Nagar (East), Chennai – 600 102, Cell: 94440 01166, E.Mail [email protected] as the Sole Arbitrator. The sole Arbitrator is directed to enter upon reference and adjudicate the dispute in accordance with law.
19.12.2024
rkp Index : Yes / No Internet : Yes / No
6/8
Arb.O.P.(Comm.Div.) No.232 of 2024
P.B.BALAJI, J.,
rkp
Arb.O.P.(Comm.Div.) No.232 of 2024
7/8
1 issue framed by the court
Whether the petitioner is entitled to appointment of a sole arbitrator under Clause 5.5 of the Vendor Agreement to adjudicate disputes over unpaid royalty amounts?
2 provisions across 1 enactments
M/s.Compass India Food Services Private Limited
M/s. PSR Foods
Mr. R.Nageswara Rao
P.B.Balaji
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
