Decided on February 07,2007

Computers Unlimited Appellant
Xerox (I) Ltd. Respondents


A.K.SIKRI, J. - (1.) THE petitioner has filed this petition under Section 11(6) read with Section 11(8) of the Arbitration and Conciliation Act, 1996 (in short the 'Act') for appointment of a sole arbitrator. As per the averments made in the petition, the petitioner had entered into a Sale Promotion Agency Agreement dated 29.8.1999 with the respondent herein. In terms of this agreement, the petitioner was to be paid a service charge in respect of sale of the products of the respondent. This agreement was initially for a period of three years, which was subject to renewal for a further period of three years unless terminated earlier under Clause 19 of the agreement. The petitioner has deposited a sum of Rs. 50,000/ - as security with the respondent. The petitioner promoted the sale of the respondent's products and according to it, it became entitled to payment of service charge in the sum of Rs. 17,76,027/ - as of 31.12.2001 when the agreement was terminated by the respondent. The petitioner's contention is that the agreement was terminated illegally. In any case, the accounts were to be settled. On 11.9.2002 the respondent wrote to the petitioner seeking statement of accounts for settlement thereof. The petitioner with its letter dated 30.9.2002 also submitted necessary documents for reconciliation of the accounts. On 21.2.2003 the petitioner received a sum of Rs. 4,475/ - as interest on the security deposit, but the security deposit itself was not refunded, which promoted the petitioner to write letter dated 28.2.2003. Since the respondent failed to amicably settle the accounts, another communication dated 16.7.2003 was sent by the petitioner to the respondent demanding the amount and the petitioner also sought appointment of an arbitrator in terms of the arbitration clause contained in the agreement dated 29.8.1999. On 11.9.2004 the petitioner received another sum of Rs. 1,795.07/ - as interest on the security deposit for the period from January, 2004 to 30th June 2004. The petitioner again wrote another letter dated 16.7.2003 for amicable resolution of the disputes. A meeting was held between the representatives of the parties in which it was agreed that the respondent would revalidate the commission claims of the petitioners and revert to him by 31.8.2005 and another meeting would be held in September, 2005. Minutes of this meeting are recorded in the letter dated 5.8.2005, which is enclosed as Annexure P/8. As decided earlier, meeting between the parties took place on 14.9.2005. However, the fact remains that the parties could not amicably settle the disputes. Ultimately, vide letter dated 20.3.2006 the petitioner invoked the arbitration clause and sought appointment of an independent arbitrator. Since arbitrator was not appointed, present petition is filed. Clause 20 of the agreement dated 29.8.1999 is the arbitration clause which reads as under: 20. ARBITRATION Any difference or dispute between the parties arising under this agreement shall be settled amicably. Unresolved dispute shall be referred to the arbitration of a sole arbitrator to be appointed by the Chairman of the Board of Directors of XEROX MODI CORP LTD. or by a person designated/authorised by him. The venue of the arbitration shall lbe in Delhi. The decision of the Sole Arbitrator shall be final and binding on the parties. The arbitration shall be conducted in accordance with the Arbitration and Conciliation Act, 1996.
(2.) AS per the aforesaid clause, Chairman of the Board of Directors of the respondent or person designated/authorised by ;him was to act as the arbitrator in case of any difference or dispute between the parties arising under the said agreement. On 3.7.2006, while issuing notice in this petition, following order was passed: Issue notice, returnable on 6th September, 2006. Notice to indicate that if the appointment of the Arbitrator is not carried out before the next date of hearing, the right to appoint an Arbitrator may be foreclosed. Since service report was awaited, on 6.9.2006 fresh notice was issued returnable on 16.10.2006. For that date also report about the service of notice was not received. Again, fresh notice was directed to be served upon the respondent returnable on 31.1.2007. Orders dated 6.9.2006 and 16.10.2006 are also reproduced as that will have some bearing on the contention raised by the respondent now: 06.09.2006 Issue fresh notice of this Petition, returnable on 16th October, 2006. 16.10.2006 Issue fresh notice to respondents in ordinary course through District Judge, Gurgaon, by Registered A.D. Post and through approved courier, returnable on 31st January, 2007.
(3.) THE respondent was served for 31.1.2007. It has filed is No. 1107/2007 intimating that the respondent has appointed Dr. Madan Gopal Sharma, Advocate, as the sole arbitrator to adjudicate upon the disputes and differences between the parties vide its letter dated 5.12.2006.;

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