ETOILE CREATIONS Vs. SARL DANSET DECO
SUPREME COURT OF INDIA
Sarl Danset Deco
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(1.) In this petition under Section 11(5) read with Section 11(9) of
the Arbitration and Conciliation Act, 1996, the petitioner prays for the
appointment of a sole arbitrator for adjudication of disputes that have
arisen between the parties in relation to 'Buyers Agreement' dated
18.10.2012 executed between them.
(2.) Briefly stated case of the petitioner is as under:- Petitioner
is a proprietorship firm having its registered office at C-291, Suraj Mal
Vihar, Delhi. The petitioner is engaged in the business of manufacturing
of products relating to home furnishing and upholstery etc., exclusively
for the respondent since 2000. The respondent-SARL DANSET DECO is a
concern having its office at 240 Rue De La Lys 59250, Halluin, France which
is engaged in the business of purchase and sale of the product relating to
home furnishing and upholstery and is the buyer of the products
manufactured by the petitioner. Accordingly, a 'Buyers Agreement' was
executed on 18.10.2012 at New Delhi between the petitioner and the
respondent. As per the aforesaid agreement, the petitioner has been
selling/supplying its aforesaid products and the respondent has been
buying/purchasing the products for resale/sale in the territory of France.
There was a long business relationship since 2000, even prior to execution
of the agreement and the petitioner was regularly supplying the products to
the respondent. At the time of execution of the aforesaid agreement, it
was acknowledged that the respondent owes a total amount of Euro 367814.80
as the outstanding amount. The details of the outstanding dues have been
mentioned in Schedule-I of the 'Buyers Agreement'. The petitioner has
alleged that as per the terms and conditions of the 'Buyers Agreement'
dated 18.10.2012, the respondent did not release the said outstanding
amount within seven days of the agreement. Despite numerous reminders for
the payment of dues through e-mails, SMS messages exchanged between the
parties during November 2012 to April 2013 and subsequent legal notices
sent to the respondent, the respondent failed to pay the admitted dues of
(3.) Clause 2.2 of the 'Buyers Agreement' imposed a restriction upon
the petitioner from supplying its product to any other person/firm or
company, in the territory of France. On the other hand, the respondent
agreed and assured that the products ordered during each year of the term
shall not fall short of the target provided in Schedule-II of the said
agreement. In the event of the failure to meet such target, the agreement
stipulated termination of restriction so imposed upon the petitioner.
Petitioner supplied various materials to the respondent at different points
of time against various orders. The respondent cancelled a few orders to
the tune of Euro 272368.25. The respondent committed breach of the terms
and conditions of the 'Buyers Agreement' because cancelled orders were not
restored. Thus, the respondent is liable to compensate the petitioner for
cancelling orders and reimburse for cost and damages incurred in procuring
material worth Euro 272368.25, just prior to the date of shipment and also
for preparing samples as per the request of the respondent dated 25.05.2012
and 26.07.2012. As per Clause 4.1 of the 'Buyers Agreement', the respondent
shall not purchase/obtain/ deal with the products or any goods that compete
with them, for sale from any person, firm or company in India other than
the petitioner. The respondent not only cancelled the orders, but also in
violation of Clause 4.1 of the 'Buyers Agreement' dated 18.10.2012,
purchased the same products worth approximately Euro 700000 from M/s.
Chahat Exports, 148-A, Basement, Deep Complex, Near Maharani Bagh, New
Delhi and Dhruv Overseas, 4502, Dau Bazar, Cloth Market, Fateh Puri, Delhi.
Placing such orders with other firms, according to petitioner, is a
violation of terms and conditions of the terms of the 'Buyers Agreement'
which stipulates commitment between the parties for five years to maintain
the business relations; but the respondent by diverting those orders to
another agency has clearly breached the terms and conditions of the
agreement. Petitioner sent legal notices dated 08.05.2013, 04.07.2013 and
06.07.2013 calling upon the respondent to pay unpaid invoices to the tune
of Euro 393916.95 and also unpaid invoices to the tune of Euro 209580.63 of
M/s Creative International (another partnership firm of the petitioner)
alongwith interest at the rate of 24% per annum.;
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