2013 (4) TMI 360 - HC - Companies Law

Appointment of an arbitrator - Arbitration and Conciliation Act, 1996 - main contention of the respondent that the petitioner has unconditionally exited from the agreement dated 22nd March, 2011 and asked for return of the bank guarantee for an amount of Rs.1.30 crores dated 19th December, 2011 who has, therefore, accepted the demand and returned the bank guarantee in question, thus, there is no live dispute raised by the petitioner & also referred the two letters dated 12th April, 2012, 13th April, 2012 written by Media On Track Entertainment, a Unit of the petitioner - Held that - It is the admitted position that both the letters were acknowledged by the respondent who has issued the letter dated 27th April, 2012 to the petitioner by which the respondent had returned the bank guarantee dated 4th November, 2011 for Rs.1.30 crores and also admittedly paid the sum of Rs.50 lac to the petitioner, as in the said letter it is alleged that the same were returned in view of the amicable acceptance of the petitioner s intention to exit from the contract with the respondent. Also admitted position that Section 9 petition filed by the petitioner was also dismissed by order dated 23rd August, 2012 wherein the interim order passed on 22nd June, 2012 was vacated. While disposing of that petition, the Court also made the inquiry from the petitioner whether after return by the respondent the said bank guarantee which was received by the petitioner, had the petitioner written any letter to the respondent or any complaint given to the authority, to the effect that the petitioner was forced to exit the contract due to coercion. The answer of the petitioner before the Court was negative. Thus petitioner s grant of prayer made is rejected as after examining the above mentioned documents, this Court is satisfied that there is no question or issue remaining to be decided between the parties in view of the admission made by the petitioner in the letters dated 12th April, 2012 and 13th April, 2012. Thus, the reliefs sought by the petitioner cannot be granted as there is no live claim. The petition is dismissed.

Summary

Issues:
Petition under Section 11(6) of the Arbitration and Conciliation Act, 1996 for appointment of an arbitrator.

Detailed Analysis:
1. The petitioner, engaged in Railway Catering and Advertising, entered into an agreement with the respondent for advertising services. Dispute arose regarding non-payment of invoices by the respondent despite bank guarantees and reminders, leading to the petitioner invoking the arbitration clause for appointment of an arbitrator.

2. The respondent contended that the petitioner unconditionally exited the agreement and requested return of the bank guarantee. The respondent returned the bank guarantee and paid a portion of the invoice amount, claiming no live dispute existed. The respondent referred to letters from the petitioner expressing intention to exit the contract.

3. The Court examined the letters dated 12th and 13th April, 2012, where the petitioner stated unconditional exit from the agreement and requested return of the bank guarantee. The respondent acknowledged these letters, returned the bank guarantee, and made partial payment, leading to the Court's conclusion that the dispute was settled between the parties.

4. The Court noted the dismissal of a previous Section 9 petition by the petitioner and highlighted the absence of any subsequent complaint or communication regarding coercion. Relying on legal principles, the Court determined that the parties had concluded the transaction and satisfied their mutual rights and obligations, rendering the petitioner's claim dead. Consequently, the Court dismissed the petition, emphasizing the absence of any live claims between the parties.

5. The judgment underscores the importance of examining the parties' actions and communications to ascertain the existence of a live dispute. In this case, the Court found that the petitioner's own letters indicated an unconditional exit from the agreement, leading to the resolution of the dispute and precluding the need for arbitration. The decision highlights the significance of parties' conduct and communications in determining the existence of a live claim for arbitration proceedings.