M/s Bharat Petroleum Corporation Ltd. v. SMT. K.K. Vilasini Amma and M/s Sini Agencies

# **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR. JUSTICE DEVAN RAMACHANDRAN THURSDAY, THE 24[TH] DAY OF JUNE 2021 / 3RD ASHADHA, 1943** **AR NO. 6 OF 2020** ## **PETITIONER:** **M/S.BHARAT PETROLEUM CORPORATION LTD., HAVING ITS REGISTERED OFFICE AT MUMBAI AND HAVING ITS TERRITORY OFFICE AT KOCHI LPG - TERRITORY OFFICE AMBALAMUGAL, COCHIN-682302, REPRESENTED BY ITS TERRITORY MANAGER (LPG)** **BY ADVS. M.GOPIKRISHNAN NAMBIAR SRI.K.JOHN MATHAI SRI.JOSON MANAVALAN SRI.KURYAN THOMAS SRI.PAULOSE C. ABRAHAM SMT.ANN MARIA FRANCIS** ## **RESPONDENTS:** **1 SMT.K.K.VILASINI AMMA, PROPRIETOR, M/S.SINI AGENCIES, 27/2574/L, 1ST FLOOR, ST.JOSEPH BUILDING VUVAJANASAMAJAM ROAD, KADAVANTHRA, KOCHI-682020.** **2 M/S.SINI AGENCIES, 27/2574/L, 1ST FLOOR, ST.JOSEPH BUILDING, YUVAJANA SAMAJAM ROAD, KADAVANTRA, KOCHI-682020, REPRESENTED BY SMT.K.K.VILASINI AMMA PROPRIETOR.** **BY ADVS. SRI.B.ASHOK SHENOY SMT.C.G.PREETHA SRI.P.S.GIREESH SRI.RIYAL DEVASSY SRI.ARJUN R NAIK** **THIS ARBITRATION REQUEST HAVING COME UP FOR ADMISSION ON 24.06.2021, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:** ## **AR NO. 6 OF 2020** **-2-** ## **ORDER** ## **Dated this the 24[th] day of June, 2021** M/s.Bharath Petroleum Corporation Limited ('BPCL' for short), which is a company incorporated under the provisions of the Indian Companies Act, 1956, has filed this request praying that a competent Arbitrator be appointed by this Court, under the provisions of Section 11 of the Arbitration and Conciliation Act, 1996, for resolution of the disputes arisen between them and the respondents. 2. According to the petitioner, Annexure-A agreement had been entered into with the respondents and that on account of various misdemeanors on the part of the latter, large amounts of money have been lost to them. They say that they, therefore, notified the respondents of their liability through Annexure-J, specifically indicating of the intention to initiate action ## **AR NO. 6 OF 2020** **-3-** under the Arbitration and Conciliation Act, 1996, but that respondents have chosen not to respond to the said notice in any manner. The petitioner, therefore, submits that they have no other option but to approach this Court, invoking Clause 38(a) of Annexure-A agreement, for appointment of a sole Arbitrator. 3. I have heard Smt.Ann Maria Francis - learned Standing Counsel appearing for the petitioner and Sri.Ashok Shenoy appearing on behalf of the respondents. 4. Smt.Ann Maria Francis submitted that even though Clause 38(a) of Annexure-A provides that sole Arbitrator shall be the Director (Marketing) of the petitioner or a person to be nominated by the Director (Marketing), her client is not insisting on the same because they are aware that position of law has not been altered on account of the subsequent amendments to the Arbitration and ## **AR NO. 6 OF 2020** **-4-** Conciliation Act. She submitted that, therefore, her client beseeches this Court to appoint a competent Arbitrator on the strength of the said Clause. 5. Sri.Ashok Shenoy - learned counsel appearing for the respondents, submitted that since Clause 38(a) of Annexure-A agreement provides that only the Director (Marketing) of the petitioner - Corporation or a person nominated by the Director (Marketing) shall be the sole Arbitrator, said Clause looses its forensic worth, going by the judgments of the Hon'ble Supreme Court in _**Newton Engineering and Chemicals Ltd. v. Indian Oil Corporation Ltd. and Others**_ [2013 (4) SCC 44] and _**TRF Ltd. v. Energo Engineering Projects Ltd.**_ [2017 (8) SCC 377]. He submitted that, when the Clause provides that only a particular person can be appointed as the sole Arbitrator, and when such person is interested ## **AR NO. 6 OF 2020** **-5-** with the cause impelled, it ceases to have effect in view of the declarations of the Hon'ble Supreme Court. He thus argues that this Arbitration Request is not maintainable. 6. After contending as afore, Sri.Ashok Shenoy conceded that, since Clause 38(a) of Annexure-A provides for the mechanism of arbitration for resolution of the disputes between the parties, his client does not stand in the way of a suitable Arbitrator being appointed by this Court, provided his clients are given liberty to raise these issues also before the said Authority. He added to his submissions by saying that there is an adscititious issue involved, namely that petitioner has not invoked Clause 38(a) of the agreement in the manner as it is contractually prescribed. He, therefore, pleaded that if this Court is inclined to appoint a sole Arbitrator, the issue relating to the manner of working Clause ## **AR NO. 6 OF 2020** **-6-** 38(a)of Annexure-A be also left open. 7. In reply, Smt.Ann Maria Francis - learned Standing Counsel appearing for the petitioner, submitted that even going by the judgments afore cited by the respondents, Clause 38(a) of Annexure-A agreement does not loose its legal standing, though it may be possible for the respondents to assert that the person named therein cannot be appointed as the Arbitrator. She argued that merely because a particular officer of the petitioner - Company has been designated as the sole Arbitrator - which has, in fact, been done before the amendment to the Arbitration Act had come into force - the respondents cannot maintain that the arbitration Clause itself is rendered otiose. She, therefore, reiteratingly prayed that this Arbitration Request be allowed. **==> picture [377 x 11] intentionally omitted <==** submissions made on behalf of the rival parties, ## **AR NO. 6 OF 2020** **-7-** it is apodictic that there is hardly any contest between them that disputes are required to be resolved. The only contention of the respondents is that Clause 38(a) of Annexure-A agreement is no longer legally standing and that initiation of arbitration has not been properly done by the petitioner. 9. The afore issues are certainly those which can be raised by the rival parties before the Arbitrator himself; and, in any event of the matter, as I have already indicated above, the only request of the respondents is that such issues be also left open to be decided and evaluated by the Arbitrator appropriately. 10. It is, therefore, indubitable that the parties are not in dissonance with respect to the appointment of an Arbitrator, but only as to the aspects which he must consider. This presents no difficulty to this Court because, the afore ## **AR NO. 6 OF 2020** **-8-** issues projected by the respondents can also be considered by the Arbitrator and order that it be so done, for which they are left open to be pursued appropriately. In summation: - (a) I nominate _“Sri.Antony P.S., Retired_ _District Judge, Pazhampilly House, Near Thottiyil_ _Temple, Padamugal, Kakkanad P.O., Kochi-682 030.”_ as the sole Arbitrator to adjudicate and resolve the disputes and differences between the parties to this case arising from Annexure-A agreement. - (b) The Registry is directed to communicate a copy of this order to the learned Arbitrator within a period of one week from today and to obtain a Statement of Disclosure from him/her under Section 11(8) read with Section 12(1) of the Arbitration and Conciliation Act, 1996. **==> picture [369 x 12] intentionally omitted <==** obtained from the learned Arbitrator, the Registry ## **AR NO. 6 OF 2020** **==> picture [22 x 9] intentionally omitted <==** shall release the certified copy of this order, with a copy of the said statement appended to it, retaining the original of the same on the files of this case. (d) The fees of the Arbitrator shall be governed by the fourth Schedule of the Arbitration and Conciliation Act, 1996. **==> picture [369 x 13] intentionally omitted <==** that they will share the arbitration costs and fees equally and it is so recorded. **==> picture [368 x 11] intentionally omitted <==** commence the proceedings without delay, I direct the parties to mark appearance before him/her at 10 A.M. on 15.07.2021. This Arbitration Request is thus allowed. **==> picture [191 x 63] intentionally omitted <==** **Sd/-** ## **DEVAN RAMACHANDRAN** ## **JUDGE** akv **-10-** ## **AR NO. 6 OF 2020** ## **APPENDIX OF AR 6/2020** ## **PETITIONER'S/S ANNEXURES** **ANNEXURE A TRUE COPY OF THE DISTRIBUTORSHIP AGREEMENT DATED 03.01.2011 ENTERED INTO BETWEEN THE PETITIONER AND THE RESPONDENTS ANNEXURE B TRUE COPY OF THE OFFICE COPY OF THE SHOWCAUSE NOTICE DATED 6.11.2014 ISSUED BY THE PETITIONER TO THE RESPONDENTS ANNEXURE C TRUE COPY OF THE SPEAKING ORDER ISSUED ON 23.05.2015 ISSUED BY THE PETITIONER TO THE RESPONDENTS ANNEXURE D TRUE COPY OF THE LETTER DATED 25.09.2015 SENT BY THE RESPONDENTS REQUESTING THE PETITIONERS TO TRANSFER THEIR CUSTOMERS TO NEIGHBOURING DISTRIBUTORSHIP ANNEXURE E TRUE COPY OF THE RESIGNATION LETTER DATED 02.04.2016 ANNEXURE F TRUE COPY OF THE LETTER ISSUED BY THE PETITIONER COMMUNICATING SHORTAGE OF EQUIPMENTS AND IMPOSING A PENALTY OF RS.24,35,100/- DATED 29.11.2016 ANNEXURE G TRUE COPY OF THE DETAILS OF THE DUES PAYABLE BY THE RESPONDENTS TO THE PETITIONER DATED 01.12.2016 ANNEXURE H TRUE COPY OF THE LETTER DATED 15.12.2016 SENT BY THE RESPONDENT TO THE PETITIONER ANNEXURE I A TRUE COPY OF THE COMMUNICATION DATED 15.12.2016 ISSUED BY THE PETITIONER TO THE RESPONDENT ANNEXURE J TRUE COPY OF THE LETTER DATED 22.08.2019 ISSUED BY THE PETITIONER TO THE RESPONDENTS**