HAVELS INDIA LTD Vs. ELECTRIUM SALES LTD

JUDGEMENT

(1.) Both these applications are filed by the defendants. The background facts leading to the filing of these applications by the defendant are thus:

(2.) The plaintiff and Electrium (U.K.) had been having business dealings in terms of a Supply Agreement executed between them on September 30, 2002. The said agreement is still subsisting. The defendant, which is a co-subsidiary of Electrium (U.K.), has filed a Request for Arbitration (RFA), being Claim No. 18774/ARB, instituted before the International Chambers of Commerce (ICC), seeking reference of dispute that has arisen between itself and the plaintiff. The plaintiff has filed the instant suit seeking declaration to the effect that there is no agreement containing an arbitration agreement between itself and the defendant. Prayer is also made regarding restraining the defendant from pursuing the said claim before the ICC. It is during the pendency of the said suit that the defendant has filed the instant applications under Section 8 of Arbitration and Conciliation Act, 1996 (Act) as well as under Order VII Rule 11 CPC on various grounds.

(3.) The defendant contends that Delhi Court has no jurisdiction as neither the cause of action or a part thereof arose in Delhi, nor the defendant has any business activity or office in India, much less in Delhi. The defendant also contends that it is a co-subsidiary of Electrium (U.K.) and thus, a "Related Person" of Electrium (U.K.) as defined under the Supply Agreement; and that the Arbitration Clause contained in the Supply Agreement, was equally applicable to the transaction between itself and the plaintiff. The defendant while referring to various clauses of the Supply Agreement, particularly, Clauses 1.1, 2, 4, 14 and 15, contends that, from the reading of these clauses it would evidence that it was a Related Person of the signatory of the Supply Agreement, namely Electrium (U.K.) and that all the transactions taking place between itself and the plaintiff were subject to the terms and conditions of this umbrella agreement. The defendant proceeds to refer to the correspondence and communication taken place between itself and the plaintiff and while referring to Clause 14 relating to Mediation and Clause 15 relating to Arbitration in the Supply Agreement, submits that the plaintiff itself has been throughout taking the Supply Agreement to be the umbrella agreement and the transaction with the defendant covered therein. The submissions of the plaintiff to the mediation followed by managing committee meeting and then arbitration in terms of Clauses 14 and 15, would clearly evidence that the plaintiff has submitted to the dispute resolution mechanism as provided in the Supply Agreement, in respect of disputes which have arisen in the transaction. It is also submitted that the Purchase Order, which the plaintiff contends to be an independent transaction, was subject to the Supply Agreement inasmuch as the defendant had dealt with the plaintiff by placing order in terms of authority derived from Clause 2 of the Supply Agreement. It is submitted that the Purchase Order nowhere intended to abrogate the dispute resolution mechanism that was stipulated in Clauses 14 and 15 of the Supply Agreement. Based on all this, it is submitted that although the main Supply Agreement was signed by the Electrium (U.K.), but by virtue of being a Related Person, the defendant is privy to the terms of the Supply Agreement, including the dispute resolution mechanism.