HERO EXPORTS Vs. TIFFINS BARYTES

JUDGEMENT

(1.) THE petitioner claims an order for appointment of an arbitrator. Reliance has been placed on Memorandum of Understanding entered into with the respondent on 08. 07. 2007 which contains the following arbitration clause:

(2.) THE petitioner adverts to certain transactions whereby the respondent had represented that it owned mines at Bellary and that it could generate about 500,000 metric tonnes per annum. The petitioner alleges having paid Rs. 14. 5 crores to the respondent pursuant to an understanding concerning supply of iron ore. It is alleged that the respondent did not honour the commitment and also did not return the money. The petitioner, therefore, alleges that a Memorandum of Understanding containing an arbitration clause was entered into with the respondent on 08. 07. 2007. In terms of the said agreement, it is alleged that the respondent agreed to pay Rs. 9. 5 crores in a time bound manner. The petitioner alleges that cheques were issued to it; however, all of them were dishonoured except one cheque for Rs. 1 crore. On the strength of these allegations, the petitioner seeks appointment of an arbitration under Section 11 of the Arbitration and Conciliation Act, 1996.

(3.) THE respondent contends that the Memorandum of Understanding was procured under coercion and extortion and therefore unforceable. It is alleged that cheques and Memorandum of Understanding were signed on the date alleged when the respondent was forced to do so with the connivance of a police officer. The respondent adverts to a complaint having been lodged in that regard with the police at Chennai on 23. 07. 2007. It also relies upon a notice dated 24. 07. 2007 whereby the invalidity of Memorandum of Understanding was set up.