VIGIL MARINE SERVICES Vs. COCHIN SHIPYARD LTD.

JUDGEMENT

(1.) The applicant Vigil Marine Services has moved this application u/s. 11(5) of the Arbitration and Conciliation Act, 1996, praying that the validity of the appointment of Shri P.B. Menon as a sole arbitrator for determining the dispute between the applicant and the respondent Cochin Shipyard Ltd. be confirmed or in the alternative a sole arbitrator may be appointed to adjudicate the dispute between the parties.

(2.) The application is founded on the plea that an agency agreement was entered into between the applicant, which is carrying on business as commission agent and broker in the maritime industry, and the respondent Cochin Shipyard Ltd., which is a shipbuilder/ship repairer, on 1.8.1993 and cl. 5 of the said agreement contains an arbitration clause which reads as under:

(3.) It is pleaded by the applicant that the agency agreement was automatically renewed from time to time and was in force at all material times. The parties explored the possibility of renegotiating some of the terms of the agency agreement and an agreement was executed on 15.7.2000, but the same was not acted upon and was waived and finally it was agreed that the terms and conditions contained in the agency agreement of 1.8.1993 would continue to govern the parties. Under the agreement, the applicant agreed to "take care of the interest of and to render all services required in marketing the products of the respondent" in the Middle East through enquiries, tenders, etc., of Government and oil companies and of other prospective customers. The agreement also provided for the commission which was payable to the applicant by the respondent on a case-by-case basis. The applicant furnished necessary inputs to the respondent for obtaining a contract for design and construction of nine multi-purpose tugs for the Jeddah Port Authority with M/s A.A. Turki Corporation. The respondent vide its letter dated 30.10.2002 had specifically requested the applicant to act as its agent in securing the aforesaid contract. Necessary steps in this direction were taken by the applicant and the technical specifications and related documents were forwarded to the applicant, who in turn filed these with M/s A.A. Turki Corporation and they did all acts necessary in order to ensure that the contract was ultimately awarded to the respondent. However, on 30.11.2002, the respondent intimated its intention to terminate the agreement with the applicant with immediate effect and in their letter of 20.1.2003 the respondent referred to its aforesaid letter as constituting its notice of termination. However, the applicant continued to pursue the matter, whereunder the contract was awarded to the respondent. The applicant then wrote to the respondent for payment of 5% commission on the value of the contract and finally a legal notice in this regard was given on 14.8.2003 invoking the arbitration clause and suggesting the names of three persons to act as sole arbitrator for concurrence. In view of the failure on the part of the respondent in responding to the aforesaid legal notice within the stipulated time-frame, the applicant gave information on 5.9.2003 that Shri P.B. Menon has been nominated as sole arbitrator and the respondent should concur in his appointment. However, the respondent vide its letter dated 22.9.2003 not only repudiated the claim of the applicant but also took a plea that the appointment of Shri P.B. Menon was illegal and against the provisions of Sec. 11(5) of the Arbitration and Conciliation Act, 1996. In these circumstances, the applicant has filed the present application praying for appointment of an arbitrator.