- (1.) The petitioner No. 1 is a partnership firm (hereinafter referred to as the petitioner firm) and the petitioner No. 2 is one of its partners. The petitioner firm is having its operation in Ahmedabad. The respondent No. 1 is the manufacturer of cycle and rickshaw tyres, tubes, hubs and other accessories and allied products. It had appointed the petitioner firm as its consignee agency for the sale of aforesaid items in the State of Gujarat. The initial agreement for this purpose was entered into sometime in the year 2005, which was extended from time to time. Last agreement dated 15.04.2010 was entered into for a period of five years starting from 01.04.2009 and expiring on 31.03.2014. The said agreement provides for termination clause which reads as under:- "The agency can be terminated by the Principal at any time after giving one month's notice in writing. The consignee agent has agreed and undertake that the agency can be terminated without notice if in the opinion of Principals, the consignee agent is guilty of misrepresentation and fails to adhere to the norms established by the Principal."
(2.) The respondents have, however, terminated the agency agreement vide notice dated 08.06.2011 i.e. before the expiry of five years. This termination order is signed by Mr. Sanjeev Pahwa, who is the Managing Director of the respondent No. 1 company. The petitioner firm feels aggrieved by this premature termination of the agency agreement, as according to the petitioner firm, the notice is in violation of Clause 3 of the agreement, as no reasons are given in the said notice. According to the petitioners, as the disputes have arisen because of the termination of the agency agreement, the present petition is filed under Section 11 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the Act) for appointment of the Arbitrator.
(3.) Though the respondent No. 1 has filed the reply contesting this petition, it could not be disputed by the respondents that disputes have arisen and also that the agreement contains arbitration clause, as per which in the event of such disputes, the matter is to be referred to the arbitration. However, the agreement mentions the name of Mr. Sanjeev Pahwa, who is to act as the sole Arbitrator in case of disputes. The only question needs to be considered is as to whether the disputes are to be adjudicated upon by Mr. Sanjeev Pahwa as the Arbitrator. It is argued by learned counsel for the petitioners that even when the arbitration agreement mentions the name of Mr. Sanjeev Pahwa, who is to act as the sole Arbitrator, under the given facts, he is not entitled to act as the Arbitrator in as much as notice of termination of the agency of the petitioners itself is issued by Mr. Sanjeev Pahwa, validity whereof is questioned by the petitioners.;