BIKANERVALA FOODS PRIVATE LIMITED Vs. SAATVIK FOODS

JUDGEMENT

(1.) This petition has been filed under Sec. 11 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the 'Act') seeking appointment of an Arbitrator for adjudicating the disputes that have arisen between the parties in relation to the Franchise Agreement dtd. 21/5/2019 executed between the parties. The Arbitration Agreement is contained in Clause 29 of the Franchise Agreement and is reproduced herein below:

(2.) The dispute having arisen between the parties, the petitioner addressed a Demand Notice dtd. 28/3/2022 to the respondents. Having received no response, the petitioner terminated the Franchise Agreement vide notice dtd. 29/7/2022, and called upon the respondents to undertake various steps pursuant thereto. Again, as no response was received from the respondents, the petitioner invoked the Arbitration Agreement vide notice dtd. 29/8/2022. As the respondents did not reply to the said notice as well, the present petition was filed.

(3.) The learned counsel for the respondents submits that the pre- condition for invoking the Arbitration Agreement has not been complied with by the petitioner. He submits that the Arbitration Agreement will come into play only where the attempt to amicably resolve the disputes by referring the same to the Managing Directors/Directors of both the parties has failed, and such failure is recorded in writing. In the present case, the petitioner never sought the reference of the disputes to the Managing Directors/Directors of the parties. He submits that, in fact, the respondents made attempts to meet the Managing Director of the plaintiff company, however, the same failed. He submits that without following the pre-condition mandated in Clause 29, the petitioner cannot invoke the Arbitration Agreement. In support, he places reliance on the judgment dtd. 10/10/2022 passed in FAO(OS)(COMM) 9/2019, titled M/s Welspun Enterprises Ltd. v. M/s NCC Ltd. He further submits that even otherwise, the claims raised by the petitioner are frivolous and are liable to be rejected. These are a clear case of deadwood.