- (1.) This application under Sub-sections (5) and (6) of Section 11 of the Arbitration and Conciliation Act, 1996 (for short "the 1996 Act") has been filed for appointing an arbitrator on the respondent's purported failure to do so in spite of notice dated 15.04.2005.
(2.) Allegedly, an agreement was entered into by and between the parties hereto on 8.05.2004. The said agreement contained an arbitration clause being Clause 12 thereof, the relevant portion whereof reads as follows: "12.2 In the event of any dispute or difference arising between the parties hereto or as to the rights and obligations under this agreement or as to any claim monetary or otherwise of one party to another, such dispute or difference shall be referred to arbitration of a common arbitrator, if agreed upon, otherwise to two or more arbitrators, one to be appointed by each of the parties to this agreement and such arbitration shall be governed by the Arbitration and Conciliation Act, 1996, for the time being in force. The venue for such arbitration shall be in India or as is mutually decided otherwise. Until a finality is achieved in the arbitration or litigation, the Licensor shall have no right to cancel the agreement and appoint any third party or enter into agreement with any party for the sale/ importation or manufacture of the products/ provision of services in the territory."
(3.) Respondent, however, contends that the said agreement was preceded by a Memorandum of Understanding dated 1.11.2003. Respondent further contends that the said purported Memorandum of Understanding and licence agreement dated 8.05.2004 are vitiated by a fraud of a very large magnitude fructified by a criminal conspiracy hatched between M/s. K.P. Jayram Pillai and Vijay R. Singh representing the petitioner and M/s. C.H. Kim and B.K. Jung representing the respondent. The petitioner - company bribed the said C.H. Kim and B.K. Jung for the purpose of creation of the aforesaid documents. They had already been convicted and sentenced to undergo imprisonment by the Korean Criminal Court. It was contended that they misused their official position to advance private benefit. There seems to be a substantial and reasonable nexus to promote personal advantage. There was furthermore no ostensible authority on their part to represent the company. The said Memorandum of Understanding also contravenes the Korean laws in terms whereof the execution thereof required the prior approval of and a duly executed power of attorney from the Representative Director and the Chief Executive Officer of the respondent which did not exist in the present case.;