Decided on February 13,2019

Rao Korupolu Appellant
T Venugopal Rao Respondents


Sanjay Kumar, J. - (1.)By way of this application filed under Section 11(5) & (6) of the Arbitration and Conciliation Act, 1996 (for brevity, 'the Act of 1996'), the applicant seeks appointment of an Arbitrator for resolution of his disputes with the respondent in relation to the Memorandum of Understanding (MoU) dated 23.03.2011 entered into by and between them.
(2.)Notice having been ordered on the application on 12.12.2014, Sri Hari Rao Lakkaraju, learned counsel for the applicant, was permitted to effect personal service of notice upon the respondent. Owing to the failure of conventional means of service, Sri Hari Rao Lakkaraju, learned counsel, was permitted to effect substituted service of notice by publication thereof in Eenadu Telugu Daily newspaper, Hyderabad City Edition. Proof of such publication was filed under Memo dated 16.11.2018 (USR No.95884/2018). Despite such substituted service, the respondent did not choose to enter appearance before this Court.
(3.)Perusal of the MoU dated 23.03.2011 executed by and between the applicant and the respondent demonstrates that they established two entities, viz., Fusion Educational Society and East West Learning Centers Private Limited, wherein they invested monies. As misunderstandings cropped up between them, they entered into the subject MoU on the advice of well-wishers and friends, whereby they agreed to part ways for better prospects and reduced into writing the terms and conditions fixing their respective rights, duties and liabilities. Thereby, the respondent undertook to pay Rs.65,00,000/- to the applicant in the manner stated in the MoU. Other terms of the compromise contemplated by the MoU are not relevant for the purposes of this application. Clause 9 of the MoU is however relevant and it reads as under:
'9. That both the parties hereby agreed and declared that any disputes arising out of this M.O.U. will be settled amicably within 48 hours from such dispute otherwise, will be referred to an independent Arbitrator mutually appointed by the consent of both parties as per the procedure of Indian Arbitration and Conciliation Act 1996.'


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