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TMI Blog2020 (9) TMI 595X X X X Extracts X X X X X X X X Extracts X X X X ..... sputedly an Agreement dated 31.03.2018 is also entered into between the parties relating to the very same transaction which is referred to as the Umbrella Agreement by the respondent and as Pricing Agreement by the applicant. The said agreement also makes provision for resolution of disputes through arbitration in the manner as indicated therein. When both, the purchase order as also the Pricing Agreement subsists and both the said documents contain the arbitration clauses which are not similar to one another, in order to determine the nature of the arbitral proceedings the said two documents will have to be read in harmony or reconciled so as to take note of the nature of the dispute that had arisen between the parties which would require resolution through arbitration and thereafter arrive at the conclusion as to whether the instant application filed under Section 11 of the Act, 1996 would be sustainable so as to appoint an arbitrator by invoking Clause7 of the purchase order; more particularly in a situation where the Arbitral Tribunal has already been constituted in terms of Clause23 of the agreement dated 31.03.2018. When admittedly the parties had entered into the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for short) praying that a sole arbitrator be appointed to adjudicate upon all disputes that have arisen between the parties in connection with the 37 purchase orders referred to in the application. Alternatively, it is prayed that the second arbitrator be appointed on account of the failure of the respondent Medima LLC to nominate an arbitrator in terms of the contracts. 2. The applicant is a manufacturer of High Carbon Ferro Chrome. The applicant and the respondent accordingly, entered into transactions whereby the applicant agreed to supply the High Carbon Ferro Chrome manufactured by them to the respondent for sale of the same in the territory of USA and Canada. Initially an Agreement dated 19.06.2017 limited to the sale of 2000 MT was entered into. Pursuant to such transaction 37 purchase orders were placed by the respondent in favour of the applicant specifying details of the supply to be made under each of the purchase orders. The parties had also entered into an Agreement dated 31.03.2018 relating to the same transaction whereunder certain terms as enumerated therein were agreed upon. In respect of the said transactions certain disputes have arisen between the parties ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the parties having entered into a business transaction; certain disputes have arisen between them which is to be resolved through arbitration. To that extent the parties are also in agreement. The issue for consideration however, is with regard to the appropriate clause that will operate providing for arbitration and will be applicable in the factual matrix herein. Since the applicant is before this Court invoking the arbitration clause in the purchase order (37 separate purchase orders), it is necessary to take note of the arbitration clause relied upon, which reads as hereunder: 7. ARBITRATION: Disputes and differences arising out of or in connection with or relating to the interpretation or implementation of this contract/order shall be referred to the Arbitral Tribunal consisting of 3 Arbitrators of which each party shall appoint one Arbitrator, and the two appointed Arbitrators shall appoint the third Arbitrator who shall act as the Presiding Arbitrator as per the provisions of the Arbitration and Conciliation Act, 1996 and any modification or re-enactment thereto. The venue of the arbitration proceedings shall be at Kolkata and language of the arbitration shall be Eng ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d had on reconciliation held that the parties should get the disputes resolved under the main agreement. In that context it was held as hereunder: 30. If there is a situation where there are disputes and differences in connection with the main agreement and also disputes in regard to other matters connected with the subjectmatter of the main agreement then in such a situation, in our view, we are governed by the general arbitration clause 39 of the main agreement under which disputes under the main agreement and disputes connected therewith can be referred to the same arbitral tribunal. This clause 39 no doubt does not refer to any named arbitrators. So far as clause 5 of the Interior Design Agreement is concerned, it refers to disputes and differences arising from that agreement which can be referred to named arbitrators and the said clause 5, in our opinion, comes into play only in a situation where there are no disputes and differences in relation to the main agreement and the disputes and differences are solely confined to the Interior Design Agreement. That, in our view, is the true intention of the parties and that is the only way by which the general arbitration pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the main agreement applies. Points 1 and 2 are decided accordingly in favour of the respondents. 9. Having taken note of the arbitration clause existing in two different set of documents between the same parties relating to the same transaction; in order to harmonise or reconcile and arrive at a conclusion as to which of the clauses would be relevant in the instant facts; it would be necessary for us to refer to the manner in which the arbitration clause was invoked and the nature of the dispute that was sought by the parties to be resolved through arbitration. In that regard a perusal of the documents will reveal that in the case on hand the applicant had not initiated the process of invoking the arbitration clause. On the other hand a notice dated 13.03.2020 (Annexure A41) was issued on behalf of the respondent by its attorney to the applicant referring to the breach of the agreement dated 31.03.2018 (Umbrella agreement/Pricing agreement) and as per the procedure provided under Clause23 of the said agreement an opportunity was provided to amicably resolve the matter; failing which it was indicated that the respondent would approach the International Chamber of Commerce (ICC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat all risks for sale to customers shall be borne by Medima and as such, confers no right upon Medima to recover losses from Balasore. 7. Balasore is, on the other hand, entitled to recovery of 100% of the Provisional Price and any amount recovered by Medima in addition thereto. 8. In this context, Balasore has repeatedly pointed out to Medima that the statements issued by Medima are incomplete and do not contain necessary details customerwise for the purposes of reconciliation. 9. Even on the basis of the incomplete and inaccurate statements provided by Medima from time to time, it is clear that Medima has been making much high deductions than permissible under the Pricing Agreement and thereby depriving Balasore of amounts lawfully owing to it under the individual contracts. Some of the issues repeatedly raised by Balasore are: 1. The allegedly actual secondary costs are nearly twice as high as the budgets and estimates projected by Medima at the time of booking the contracts; 2. The quantity and quality of Products invoiced by Medima to the customers are different from the contracts signed by Medima and Balasore; 3. Interest for availing cred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the parties that the terms contained in the Agreement would govern all transactions, including those which had commenced from 08.08.2017. Further it is noticed that the parties were earlier governed by an Agreement dated 19.06.2017 which was for a fixed quantity of 2000 MT of the produce while the present agreement, according to the parties was on a long term basis fixing the time period for which it was valid and the individual purchase orders will have to be taken note for the specific quantity ordered for under each of the transactions, the price of which was to be ultimately determined as provided under the Pricing Agreement. 14. In that view of the matter, when admittedly the parties had entered into the agreement dated 31.03.2018 and there was consensus adidem to the terms and conditions contained therein which is comprehensive and encompassing all terms of the transaction and such agreement also contains an arbitration clause which is different from the arbitration clause provided in the purchase order which is for the limited purpose of supply of the produce with more specific details which arises out of Agreement dated 31.03.2018; the arbitration clause contained in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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