- (1.)ADMIT. Counsel the respondent waives service. By consent, taken up for hearing and final disposal.
(2.)ON 20th May, 1995, an agreement was entered into between the parties by which the petitioner appointed the respondent as a sole selling agent for the sale of spare parts of textile machinery. Disputes arose between the parties and on 3rd April, 1998 the petitioner terminated the agreement. The agreement between the parties contained an arbitration clause in the following terms:
"10. Arbitration : In the event of any doubt dispute difference or question arising howsoever between the parties from or under this agreement or any operation activity or accounting thereunder (including any question of interpretation or enforceability of this agreement), the same shall, if not amicably resolved, be referred to the arbitration of a mutually agreed arbitrator and in the event of any disagreement as to the appointment of such sole arbitrator, the sole arbitrator shall be a professional practising in Bombay appointed by the Bombay Chamber of Commerce and Industry, Bombay. The arbitration proceeding shall take place at Bombay. The Award of the sole arbitration shall be final and binding between the parties. Each party shall bear its own cost of arbitration. This is an agreement for arbitration within the meaning of the Indian Arbitration Act, 1940, including any statutory modification or re-enactment thereof. "
On 18th January, 1999, a letter was addressed by the respondent to the petitioner setting out certain proposals and recording that if the petitioner did not agree, then the only course open to the parties would be to refer the matter to the arbitration as provided in the agreement, and "let the Bombay Chamber of Commerce resolve the matter for us". On 12th May, 1999, the respondents Advocates addressed a letter to the petitioner stating that in view of the provisions of Clause 10 of the agreement, the arbitration shall be conducted under the auspices of the Bombay Chamber of Commerce and Industry. A letter of the same date was addressed to the Bombay Chamber of Commerce for the appointment of an arbitrator and for the holding of arbitration proceedings. On 19th May, 1999, the petitioner responded by an Advocates letter and contended that the arbitration agreement was not in existence in view of the termination of the agency agreement. By its letter of the same date addressed to the Bombay Chamber of Commerce, the petitioner reiterated the contention that the agreement had come to an end upon termination and hence Clause 10 which contained an arbitration agreement would not apply.
(3.)IN pursuance of the arbitral request, the Bombay Chamber of Commerce nominated Mr. Justice D. R. Dhanuka, a former Judge of this Court to adjudicate upon the disputes between the parties. Parties led evidence before the arbitrator. The Award of the sole arbitrator has been rendered on 16th May, 2002 by which the petitioner has been ordered and directed to pay an amount of Rs. 11,59,081. 16 to the respondent together with interest @ 18% per annum from the date of the reference. The Arbitral Award records that at the fourth arbitral meeting held on 4th April, 2000, the Arbitral Tribunal was specifically informed by and on behalf of the petitioner herein that in respect of the claim of the respondent of Rs. 14,83,963. 13 the petitioner conceded that the respondent was entitled to a credit of Rs. 11,78,894. 87. The arbitrator allowed the claim of the respondent to the extent of Rs. 11,59,081. 16. The arbitrator, however, rejected the contention of the respondent that it was entitled to commission even in respect of direct sales that were made by the petitioner during the term of the agreement. On the latter aspect, the arbitrator held that the respondent had not led evidence to prove that it was instrumental in causing orders to be placed for the purchase of the goods though these orders were directly received by the petitioner from customers. Consequently, the aforesaid claim could not be and was not allowed.