Swastik Pipe Ltd v. Mr. Rohit Sharma Sole Proprietor, M/s. Star Industries

1. This hearing has been done through hybrid mode.

2. This is a petition filed by the Petitioner-Swastik Pipe Ltd under Section 11(6) of the Arbitration and Conciliation Act, 1996 seeking appointment of a sole arbitrator for adjudication of disputes. The present dispute arises out of alleged failure of payment of dues by the Respondent for purchase of Cold Rolled Strips (hereinafter, ‘C.R. Strips’) from the Petitioner company. It is averred that the transaction between the parties is governed by the arbitration clause contained in the terms and conditions of the tax invoice/s raised when the goods were supplied. Further, it is stated that the pending dues were not cleared by the Respondent despite repeated reminders.

3. It is stated in the petition that a total amount of Rs. 6,55,076/- along with interest is due on behalf of the Respondent as on 31st August, 2022. Further, the Petitioner states that a demand notice was sent to the Respondent on 30th August, 2022. However, the Respondent has failed to pay the outstanding dues. Hence, this petition.

4. On 8th February, 2024 the Petitioner was directed to file the amended memo of parties. Accordingly, the amended memo of parties has been filed. Service through email has been effected by the Registry.

5. Further on 8th February, 2024, the Court referred the matter to the Delhi High Court Mediation and Conciliation Centre. The relevant portion of the said order is extracted hereinunder:

6. It is averred in the petition that the present dispute is to be adjudicated in terms of the arbitration clause present in the tax invoices exchanged between the parties. The tax invoice contains an arbitration clause which reads as under:-

7. In the recent judgment of this Court in SRF Ltd. v. Jonson Rubber Industries Ltd [Judgement dated 12th March, 2024 in ARB.P. 854/2023] it was held that an arbitration clause contained in the tax invoices is binding between the parties. The relevant portion of the judgement is extracted hereinunder:-

from raising any objection for referring the matter to Arbitration, appointment of Sole Arbitrator by Seller or any other matter or thing connected therewith or incidental thereto. All proceedings in such Arbitration shall be conducted in English and place of arbitration shall be New Delhi. All disputes of the terms and conditions relating to this order or otherwise arising there from between the Seller and Buyer shall be subjected to and referred to the court Competent Jurisdiction within the limits of New Delhi only.”

26. The invoices with the arbitration clause have been acknowledged and part payment has been made. The question as to whether the part-payments were towards these very invoices or not would become a question of evidence.”

8. Thus, the arbitration clause in the tax invoice is binding between the parties.

9. Accordingly, since there is no resolution of the disputes, Mr. Karandeep Singh Rekhi, Advocate (M: 9711903476) is appointed as the ld. Sole Arbitrator. Considering the nature and extent of claims, the fee of the ld. Sole Arbitrator is fixed at lump sum Rs.75,000/- to be shared equally by both the parties.

10. The Petitioner still submits that the mediation in this and the connected matters- ARB.P.1255/2023, ARB.P.1257/2023, ARB.P.1258/2023 is still going on and there is a possibility that the Respondent may come forward to resolve the disputes. Accordingly, let the mediation proceed before the Delhi High Court Mediation and Conciliation Centre on 26th April, 2024. If the disputes are not resolved, the ld. Sole Arbitrator who is appointed today, shall enter reference on 23rd July, 2024.