- (1.) Heard learned counsel for the parties. This is an Arbitration Application filed under Section 11 of the Arbitration & Conciliation Act, 1996 for appointment of Arbitrator in respect of dispute raised between the parties regarding terms and conditions of the contract dated 1.10.2002.
(2.) Briefly stated the facts of the case are that the applicant-Company and erstwhile non-applicant Company which has now merged in Indian Oil Corporation Ltd. entered into an agreement for sale of lubricants and specialties and the applicant-Company was made as consignment agent of the non-applicant Company. In the said agreement, Clause 17.0 relates to arbitration. Within a span of few months, the applicant-Company had accumulated a large unsold stock under CA account due to slow and unwilling lifting of lubricant by retail outlets and market. Despite the fact that when the existing stock of lubricant could not be lifted by the applicant-Company, the IBP Company (now IOCL) forced the applicant-Company to add more fresh stock for retail outlets and market every month, which was not possible in any manner because the applicant-Company came in financial strain. Finally, in November, 2003, the applicant-Company had requested the IBPL Company (now IOCL) either to liquidate the applicant-Company's stock or to take the entire stock of about 9.23 kls. of lubricant in CA account, transferred back to the Company and to make the payment of value of the stock to the applicant-Company. On the aforesaid request, the non-applicant IBP Company (now IOCL) created a dispute and informed the applicant-Company that the total stock in CA account instead of 9.237 Kls. was 6.064 Kls. only. However, when for almost a year, the dispute could not be resolved, a Meeting was held between the representative of the non-applicant Company and Director of the applicant-Company and it was agreed that the IBP Company (now IOCL) shall lift the entire stock and would make the payment of value of the stock by 20.1.2005. But, nothing has been done by the non-applicant Company till date. Various correspondence were made between the parties, but nothing had happened in the matter. On 16.7.2007 (Annexure/5), the legal notice was also sent by the applicant-Company to the non-applicant company either to resolve the dispute immediately or to refer the matter to the Arbitrator for decision as per Clause 17.0 of the Agreement (Annexure-1). But, the non-applicant company did not take care of it. Hence, this application for appointment of Arbitrator has been filed by the applicant-company.
(3.) Counsel for the non-applicant Company in his reply has raised two objections:- (i) There is no valid arbitration agreement between the parties in terms of Section 7 of the Arbitration & Conciliation Act, 1996. (ii) As per Clause No. 18 of Consignment Agency Agreement relating to the jurisdiction, the agreement shall be subject to the jurisdiction of the Courts at Kolkata. Therefore, this Court has no territorial jurisdiction.;