Full Text
HIGH COURT OF DELHI
Date of order : 27th February, 2023
M/S VALLEY TELEGENCE PRIVATE LIMITED ..... Petitioner
Through: Mr. Bijender Singh and Mr. Manjeet Singh, Advocates
Through: Mr. Preet Pal Singh, Advocate
CHANDRA DHARI SINGH, J (Oral)
JUDGMENT
1. The instant petition under Section 11 of the Arbitration and Conciliation Act, 1996 has been filed on behalf of petitioner seeking the following reliefs:- "a. Appoint Retd. Justice Sh. Kailash Gambhir, HMJ, High Court of Delhi as the Sole Arbitrator as per Section 11 of Arbitration and Conciliation Act,1996; and b. Direct that costs of the proceedings be awarded in favor of the Petitioner; and c. Pass such other and further order(s) as this Hon’ble Court may deem fit and appropriate for the proper adjudication of this case in the favor of the Petitioner and against the Respondent."
2. The Petitioner is a Telecom Group working in VAS Infrastructure and Applications catering to requirements across technologies like GSM, CDMA, 4G/LTE, & Enterprise mobile apps in the Indian and APAC Market. It is engaged in the business of providing Telecom Solutions, IT Services, Enterprise Applications, Solution Designing and Development, Mobile Applications, Wi-Fi Monetization & Management Solutions, Data Processing, E-Governance Applications, System Integration and Consultancy Services and carrying out end-to-end application development and management of the systems and solutions.
3. The Respondent is involved in providing IT solutions by delivering an enterprise’s entire collection of hardware, software, networks, data centre facilities and related equipments used to build, test, operate, monitor, manage and support IT Services. It provides the communication path and services between users, processes, applications, services and external networks.
4. Learned counsel appearing on behalf of petitioner submitted that the Petitioner and Respondent entered into two Agreements dated 11th June, 2018 and 7th August, 2018 for sale and purchase of IT Goods and various Purchase Orders (POs) whereby the Respondent was to supply IT Hardware (Cambium make-Outdoor Wireless Equipment/ Dual Band Outdoor Access Points, Model-cnPilot E500 & E510 along with CnMaestro Management System) and any other additional license/ IP related to the functioning and usage of contracted items on placing of PO's and tendering of payment regarding the same by the Petitioner.
5. It is stated that the Petitioner raised PO’s of specified dates, description of IT Goods and quantities for which the Respondent was bound to supply as per terms of the Agreements and said PO’s. However, the Respondent failed in supplying the same in accordance with the terms of the PO’s as wells as the Agreement.
6. It is stated that the Petitioner duly tendered payments of the PO’s, thus fulfilling its part of the Agreements. However, despite receiving complete payments, the Respondent failed to supply requisite goods with full-fledged Licenses which has resulted in huge financial loss to the Petitioner and further left the Petitioner in a vulnerable standing in the trading community by placing the business and reputation of the Petitioner in jeopardy.
7. It is submitted that the Respondent repeatedly gave the Petitioner "Trial Version" licenses, breaching the Agreements. The Respondent has extended the "Trial Version" license term restriction for years, keeping the Petitioner in limbo. The delivery of the same forms an integral part of the whole deliverable as per the agreed terms of the said Agreements and PO’s issued thereunder to the Respondent. The Respondent is thus using unfair commercial tactics to maintain acquiring unjustified business.
8. It is stated that the Respondent has failed to provide the facility of ‘Zero Touch Provisioning & Mesh Functionality’ which was a part of deliverables as per Terms and Conditions mentioned in each PO which was accepted by the Respondent.
9. It is further submitted that the said Agreements encompass an Arbitration Clause at Para No. 11, to be invoked by either party to the said agreements when any dispute of any nature whatsoever arises between them.
10. It is submitted that a Legal Notice dated 06.05.2022 was issued by and on behalf of the Petitioner demanding payment of Rs. 14,14,74,827/with interest @ 18% per annum till date of realization as suffered by the Petitioner in consequence of breach of Terms and Conditions of the Agreements, and invoking of the Arbitration clause of Agreement dated 11.06.2018 and thereby, proposed the name of Retd. Justice Sh. Kailash Gambhir, High Court of Delhi, R/o W-67, Third Floor, Greater Kailash, New Delhi - 110048 as the Sole Arbitrator. However, the Respondent has neither replied to the said Legal Notice nor objected to the name of the Arbitrator.
11. In view of the aforesaid facts and arbitrary exercise of authority by the Respondent and its authorities, the Petitioner herein has been deprived of its necessary right to remedy. Hence, the Petitioner is constrained to prefer the present petition under section 11(6) of the Arbitration and Conciliation Act, 1996 for appointment of an Arbitrator.
12. Per contra, learned counsel for the Respondent submitted that as evident from the documents, the agreements containing arbitration clause, on the basis of which the present petition is being filed, were executed in Gurugram, Haryana, and thus the jurisdiction lies with the High Court of Punjab & Haryana and the present petition is not maintainable and liable to be dismissed on the said ground.
13. It is stated that the petition and stated disagreement are a smokescreen to avoid liability, and the arbitration procedure has been started with malicious purpose to establish a moonshine defence to the Respondent's accusations. The Petitioner's false and frivolous version is based on inaccurate and partial facts to mislead this Court and get favourable rulings by suppressing crucial information.
14. It is submitted that the Petitioner owes the Respondent corporation a debt that is due, outstanding, and payable. The Petitioner has not disclosed to the Court that it owes Rs.1,24,00,500/- to the Respondent, that a cheque issued in discharge of the legally recoverable debt drawn and issued by the Petitioner has been dishonoured, and that the Respondent has initiated legal proceedings in accordance with law. In view of the aforesaid, it is submitted that the instant petition as being devoid of merits be summarily dismissed. However, after some length of arguments it has been fairly agreed by the learned counsel on behalf of the respondent that the disputes between the parties are arbitrable in nature and this Court can consider appointing a sole arbitrator to adjudicate the claims between the parties.
15. Heard learned counsel for the parties and perused the record.
16. As agreed on behalf of the parties, it is evident that the disputes between the parties are arbitrable in nature. It is also agreed that an Arbitrator may be appointed for adjudicating the disputes that have arisen between the parties in relation to the abovementioned Agreements. In view of the same, this Court is inclined to refer the disputes between the parties for being resolved to arbitration, by appointing an arbitral tribunal. Hence, the following Order: ORDER
(i) Justice (Retd.) N V Ramana, former Chief Justice of India is appointed as the sole arbitrator to adjudicate the disputes between the parties which have arisen under the Agreements;
(ii) The learned sole arbitrator, before entering the arbitration reference, shall ensure the compliance of Section 12(1) of the Arbitration and Conciliation Act, 1996;
(iii) The learned sole arbitrator shall be paid fees as prescribed under the he Delhi International Arbitration Centre (DIAC) (Administrative Cost and Arbitrators Fees) Rules, 2018 as amended vide notification dated 15th November, 2022;
(iv) At the first instance, the parties shall appear before the learned sole arbitrator within 10 days from today on a date which may be mutually fixed by the learned sole arbitrator; and
(v) All contentions of the parties are expressly kept open.
17. The petition is disposed of in the aforesaid terms along with pending applications, if any.
18. The order be uploaded on the website forthwith. A copy of the order be forwarded to the learned sole arbitrator on the following address: Justice (Retd.) N V Ramana Former Chief Justice of India Address: 2, Tughlak Road, New Delhi -110011 Phone No.- +91 - 9818000162.