Allowed

Nimbark Fashions Limited v. Soundararaja Millls Limited

Madras HC18 Oct 2024OSA(CAD)/124/2024

Case brief

AI extract

What is this about?

In a common consent order, the Appellate Division set aside an interim order and an order appointing a sole arbitrator to facilitate parties to submit applications under Section 17 of the Arbitration and Conciliation Act regarding disputes over buyback agreements. The parties agreed to pursue arbitration on merits de hors prior observations.

What did the court decide?

Interim order dated 28.02.2024 and impugned order dated 09.09.2024 in O.A.Nos.154 and 155 of 2024 set aside to facilitate Section 17 application before the Arbitral Tribunal.

Nimbark Fashions Limited Vs Soundararaja Millls Limited — Arbitration | Madras HC (2024)

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O.S.A.(CAD) Nos.124 and 125 of 2024

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IN THE HIGH COURT OF JUDICATURE AT MADRAS

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DATED : 18.10.2024

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CORAM

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THE HONOURABLE MR.JUSTICE M.SUNDAR

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and

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THE HONOURABLE MRS.JUSTICE K.GOVINDARAJAN

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THILAKAVADI

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O.S.A.(CAD) Nos.124 and 125 of 2024 and C.M.P.Nos.22240, 22241, 22251 and 22252 of 2024

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in O.S.A.(CAD) Nos.124 and 125 of 2024

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M/s.Nimbark Fashions Limited Rep.by its authorised signatory Mr.Nageswaran Having their Registered office at No.1006, Windfall, Sahar Plaza, J.B.Nagar, Andheri Kurla Road, Andheri East, Mumbai – 400 059. ... Appellant (in both OSAs)

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Vs.

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M/s.Soundararaja Mills Limited, Rep.by its Managing Director Mr.Kiran Ranjit Having its registered office and administration office Soundararaja Buildings G.T.N.Salai, Dindigul – 624 005. .. Respondent

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Page Nos.1/12

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https://www.mhc.tn.gov.in/judis

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O.S.A.(CAD) Nos.124 and 125 of 2024

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(in both OSAs)

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Original Side Appeals filed under Section 13(1) of Commercial Courts Act read with Order XXXVI Rule 1 of Original Side Rules read with Section 37 of Arbitration and Conciliation Act, 1996, praying to allow the appeals and set aside the impugned order dated 09.09.2024 in O.A.Nos.154 and 155 of 2024.

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For Appellant in both OSAs : Mr.R.Prabhakaran For Respondent in both OSAs : Mr.T.Gowthaman, Senior Counsel instructed by Mr.R.Swarnavel

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C O M M O N J U D G M E N T

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[Judgment of the Court was made by M.SUNDAR, J.,]

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This common consent order will now dispose of the captioned two 'Original Side Appeals' {'OSAs' for the sake of brevity, convenience and clarity} and captioned four 'Civil Miscellaneous Petitions' {'CMPs' for the sake of brevity, convenience and clarity} thereat.

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When the captioned two OSAs and captioned four CMPs thereat

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were listed before this Court on 04.10.2024, the following proceedings were made:

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'O.S.A(CAD)Nos.124 & 125 of 2024

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Page Nos.2/12

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https://www.mhc.tn.gov.in/judis

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O.S.A.(CAD) Nos.124 and 125 of 2024

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and C.M.P.Nos.22240, 22241, 22251 & 22252 of 2024 in O.S.A(CAD)Nos.124 & 125 of 2024 M.SUNDAR,J., and K.GOVINDARAJAN THILAKAVADI, J.,

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[Order of the Court was made by M.SUNDAR. J.,]

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Captioned 'Original Side Appeal' {hereinafter 'OSA' for the sake of brevity} is directed against an order dated 09.09.2024 made in O.A.No.154 of 2024 on the file of the Commercial Division of this Court. This '09.09.2024 order' shall be referred to as 'impugned order' for the sake of brevity and 'the Commercial Division' which made the impugned order shall be referred to as 'said Commercial Division' for the sake of convenience.

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2. Short facts are that the appellant company headquartered in Bombay is manufacturer and trader of textiles; that respondent company (Mill with spindles) is engaged in the business of manufacturing yarn at Dindugal in Tamil Nadu; that agreements styled Buyback agreements were entered into between appellant company and respondent mill; that there were buyback agreements dated 15.08.2018, 15.08.2019 and 01.07.2021; that under the buyback agreements, appellant company claims that it has supplied raw material / fibre to respondent mill; that third buyback agreement dated 01.07.2021 ran into rough weather; that there is an arbitration clause in the third buyback agreement; that arbitration clause was triggered; that vide order dated 09.09.2024 in Arb.O.P.(Comm.Div.)No.153 of 2024, retired District Judge in the District Judiciary of Tamil Nadu was appointed as sole arbitrator; that Arb.O.P.(Comm.Div.)No.153 of 2024 is a Section 11 petition i.e., Section 11 of 'The Arbitration and Conciliation Act, 1996 (Act No.26 of 1996)' [hereinafter 'A and C Act' for the sake of convenience and clarity] ; that prior to this 09.09.2024 order, on 22.02.2024 appellant company filed O.A.No.154 of 2024 with a prayer to not to sell finished products i.e., yarn to any third party; that the prayer was negatived in and

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Page Nos.3/12

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https://www.mhc.tn.gov.in/judis

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O.S.A.(CAD) Nos.124 and 125 of 2024

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by impugned order; that aggrieved by the impugned order, the appellant company is on appeal.

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3. Ms.R.Srinithi, learned counsel for appellant company submitted that the appellant company has funded working capital for respondent mill though they are under no obligation to do so but the respondent mill has not discharged its obligation/s under buyback agreement dated 01.07.2021.

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4. Issue notice.

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5. Mr.D.R.Arun Kumar (Enrolment No.1933/2014) learned counsel with address for service at No.61/1, Honeydew Apartment, No.9, Kilpauk Garden 2nd Street, Chennai-600 010, who is present in Court accepts notice for respondent mill and requests for time to file counter affidavit in the captioned 'Civil Miscellaneous Petition' {'CMP'}.

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6. To be noted, when the matter was listed yesterday (03.10.2024), the following proceedings were made:

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'O.S.A(CAD)Nos.124 & 125 of 2024

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and

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C.M.P.Nos.22240, 22241, 22251 & 22252 of 2024

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O.S.A(CAD)Nos.124 & 125 of 2024

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M.SUNDAR, J., and K.GOVINDARAJAN THILAKAVADI, J.,

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[Order of the Court was made by M.SUNDAR. J.,]

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Mr.R.Prabhakaran, learned counsel on record for appellant is before us.

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2. Mr.R.Swarnavel (Enrol.No.M8/900/98), learned counsel submits that he has lodged caveat vide Caveat No.5464 of 2024 but the name of caveator counsel or details about caveat are not shown in the cause list.

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3. Registry to verify and do the needful.

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4. List tomorrow (04.10.2024) in the Admission Board i.e., Motion List under the same

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Page Nos.4/12

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https://www.mhc.tn.gov.in/judis

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O.S.A.(CAD) Nos.124 and 125 of 2024

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cause list caption i.e., 'FOR ADMISSION'.

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List on 04.10.2024.'

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7. It is seen from records that caveat has not been numbered and No.5464 of 2024 is Diary number. Mr.D.R.Arun Kumar, learned counsel expressed regret for incorrect representation made yesterday i.e., representation that the respondent mill is on caveat. Nonetheless, Mr.D.R.Arun Kumar, learned counsel has now accepted notice for respondent.

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8. Let counter in captioned CMP be filed before next

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listing.

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List a fortnight hence. List on 18.10.2024.'

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Today, Mr.R.Prabhakaran, learned counsel along Ms.Bhavna,

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counsel on record for sole appellant and Mr.T.Gowthaman, learned Senior Counsel instructed by Mr.R.Swarnavel, counsel on record for sole respondent are before us.

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Both sides submitted that the aforementioned 04.10.2024 proceedings capture facts, events and trajectory correctly. Both sides agreed to have the main OSAs taken up.

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Both sides submitted that an Arbitrator [Former Judge of District Judiciary] has been appointed as sole Arbitrator and he constitutes 'Arbitral Tribunal' ['AT' for the sake of brevity]. Both sides submitted that appointment of Arbitrator is by way of a judicial order in a Section 11 petition i.e., Arb.O.P.(Com.Div.)No.153 of 2024 and a scanned reproduction

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Page Nos.5/12

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https://www.mhc.tn.gov.in/judis

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O.S.A.(CAD) Nos.124 and 125 of 2024

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of this judicial order is as follows:

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Page Nos.6/12

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https://www.mhc.tn.gov.in/judis

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O.S.A.(CAD) Nos.124 and 125 of 2024

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Page Nos.7/12

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https://www.mhc.tn.gov.in/judis

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O.S.A.(CAD) Nos.124 and 125 of 2024

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Both sides submitted that they accept the aforementioned order and

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they have given legal quietus (finality) to the aforementioned order. It is also submitted by both sides that they would go before AT. This 'Commercial Appellate Division' {'CAD' for the sake of brevity} is further informed that AT has already issued a notice of first sitting, {first sitting is to be held tomorrow (19.10.2024) at 3.00 p.m. at Madurai Union Club, No.9, Tamukkam Park Road, Opposite Rajaji Park, Madurai-625020}. It is submitted by both sides that they will go before AT tomorrow and participate in the proceedings.

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Page Nos.8/12

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https://www.mhc.tn.gov.in/judis

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O.S.A.(CAD) Nos.124 and 125 of 2024

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In the light of the narrative thus far, without dilating more on facts

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or issues, the following consent order is made:

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(i) Interim order dated 28.02.2024 made in O.A.Nos.154 and 155 of 2024 as well as the impugned order i.e., order dated 09.09.2024 made in O.A.No.154 and 155 of 2024 are set aside;

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(ii) It is made clear that setting aside of the interim order and impugned order are not on merits but for the sole purpose of facilitating parties to go before sole Arbitrator by way of a petition under Section 17 of A and C Act. It is open to parties to present pleadings in O.A.Nos.154 and 155 of 2024 as petitions under Section 17 of A and C Act and counter thereat;

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(iii) If the above course is adopted, we request sole Arbitrator / AT to consider Section 17 application/s on its own merits and in accordance with law de hors any observations in interim order and impugned order which have now been set aside by this order;

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(iv) As already alluded to supra elsewhere in this order, both sides are not entering upon disputation or contestation

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Page Nos.9/12

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https://www.mhc.tn.gov.in/judis

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O.S.A.(CAD) Nos.124 and 125 of 2024

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regarding appointment of sole Arbitrator vide a judicial order in

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a Section 11 petition and that order now attains legal quietus

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i.e., finality;

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(v) As regards all other proceedings before Arbitrator, the

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same will proceed on its own merits and in accordance with law

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de hors even any observation/s in the present judicial order.

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As a sequitur, captioned four CMPs are disposed of as closed.

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Captioned two OSAs and four CMPs are disposed of in the

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aforesaid manner. There shall be no order as to costs.

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Index : Yes / No Speaking / Non-speaking Neutral Citation : Yes / No mk

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P.S. I: Upload forthwith

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P.S . II : All concerned to act forthwith on the uploaded soft copy of this proceedings as uploaded in the official website of this Court. To be noted, the soft copies uploaded in the official website of this Court are water marked, besides being QR Coded.

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Page Nos.10/12

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https://www.mhc.tn.gov.in/judis

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O.S.A.(CAD) Nos.124 and 125 of 2024

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The Sub-Assistant Registrar Original Side High Court, Madras.

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Page Nos.11/12

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https://www.mhc.tn.gov.in/judis

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O.S.A.(CAD) Nos.124 and 125 of 2024

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M.SUNDAR, J., and K.GOVINDARAJAN THILAKAVADI, J.,

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O.S.A.(CAD) Nos.124 and 125 of 2024 and C.M.P.Nos.22240, 22241, 22251 and 22252 of 2024

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18.10.2024

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Page Nos.12/12

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https://www.mhc.tn.gov.in/judis

Nimbark Fashions Limited v. Soundararaja Millls Limited

Case brief

What is this about?

What did the court decide?

Nimbark Fashions Limited v. Soundararaja Millls Limited

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

Statutes considered

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