SANA TRADUBG COMPANY LIMITED Vs. IC TEXTILES LIMITED

JUDGEMENT

(1.) These applications have been filed by the applicant under Section 11(6)(c) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as "the Act") to seek appointment of an arbitrator in view of the inability expressed by Mr Manabu Nonoguchi to act as an arbitrator. The prayer made in the applications is to appoint a suitable person to act as the sole arbitrator in place of the nominated arbitrator under Clause 6 of the Deed of Reserve and Charge of Property dated 22-2-2002 (for short "the Deed") and to refer the disputes between the parties to him.

(2.) The arbitration applications have been filed in the following facts and circumstances. As alleged in the applications, on 7-6-2001, the applicant entered into a hire-purchase agreement titled "Contract of Sale No. QAC-3372 for sale purchase of 5 sets in 2 lots of Murata No. 7-V Mach-cowst automatic cone winder magazine type 60 drums on deferred payment terms. The applicant exported the machinery in two lots. The first shipment (2 sets) was made on 10-7-2001 under Invoice No. 6321 and the second shipment (2 sets) was made on 5-10-2001 under Invoice No. 6364. The dispute is in regard to these shipments.

(3.) In pursuance of the agreement, the physical custody of the machines was handed over to the respondent which was accepted by it. However, the title did not pass, as it was due to pass only on payment of the last hire-purchase instalment as envisaged under the agreement. The agreement was approved by Reserve Bank of India vide Approval No. FCB/CO/2001/747. The respondent after paying the first two instalments towards the shipments, did not pay the next two instalments and, therefore, as envisaged in the agreement the respondent became liable to return the custody and possession of the machinery to the applicant.