ESGEE ENTERPRISES Vs. INTERNATIONAL CYCLE GEARS

JUDGEMENT

(1.) There was an agreement between the parties dated 21/5/1986. It contained an arbitration clause.The disputes had arisen and the arbitrator had been appointed by the Indian Council of Arbitration. The arbitrator had given the award to which objections have been filed by the petitioner, which is a partnership concern. It is asserted that the petitioner is engaged in the business of import/export and the marketing of goods. The petitioner had met the representative of the respondent at the International Cycle show in New York. In pursuance of the meeting and the discussion at New York the respondent had addressed a letter dated 22/4/1986 to the claimant/petitioner. It offered the sole agency to the petitioner for U.S. market with this understanding that respondent would not sell their product directly to the customer. The petitioner had accepted the proposal. The agreement was drawn between the parties and it was duly signed.

(2.) It is asserted that respondent in its letter of 21/5/1986 suggested the names of various parties and quoted the price at which the products of the respondent was to be sold. After receipt of the letter of 24/4/1986 with the prices from the respondent and signing of the agreement the petitioner sent a telex on 3/6/1986 requesting reduction of the prices. The respondent sent to the petitioner a proforma invoice whereby the petitioner intended to import free freewheels initially for $ 10,125.00 in order to stock them in its warehouse and resell the customers as ordered. 90 days credit was allowable. When petitioner contacted potential buyers by persona visits he was informed by (1) Bicycle Corporation of America Allentown, PA; (2) The Murray Dhio Manufacturing Co. Brentwood, TN: (3) Ross Bicycles, Inc. Allentown PA; Kent International, Kearney, NJ Procycle Inc., Because, Quo: (4) The Excel Group of USA, Franklin Park, II Roadmaster, Kent, WA; (5) Columbia Manufacturing Co. Westfield, MA and others that they qualify the supplier, by in bulk, have their own financial and other arrangements to import various bicycle components in bulk saving transportation costs from shipyard to agents warehouse. In this manner the buyers realised substantial savings and, therefore, they insisted on direct imports. This was the outcome of the discussion of the petitioner.

(3.) Petitioner after receipt of certain letters asked the respondent to keep the prices at such level means to make the task more difficult in creating the market for the product of the respondent. The respondent instead of considering the same again vide letter dated 5/8/1986 stated that the price of 6 speed is US $ 2.00 which is quoted after signing of the agency agreement just to create the hindrance in the smooth working of the agreement. Subsequently when dispute arose the respondent cancelled the agreement and in accordance with the arbitration clause the matter was referred to the arbitrator. The award is stated to be illegal asserting that arbitrator has misconducted himself. It is alleged that the arbitrator is wrong in holding that the cancellation of the agency agreement was valid. It was also wrong in rejecting the claim of the petitioner of 5% commission on the transaction done at focus India Expo Fair held between 24/2/1987, 25/2/1987, 26/2/1987, 27/2/1987. Petitioner's claim is that earlier there was no market of the product of the respondent. the petitioner with all its efforts, personal visits, telephonic calls convinced the customers for the products of the respondent. There was good scope for their products in U.S.A. The arbitrator was wrong in rejecting the claim of 5% commission. It is also asserted that the arbitrator failed to consider the claim pertaining to the expenses incurred of Rs.9.1,04,926.00 in generating business in U.S.A. for the respondent.