RESEARCH INSTITUTE Vs. ASIAN SCHOOL OF BUSINESS

JUDGEMENT

(1.) This Arbitration Request has been filed under Sec. 11 of the Arbitration and Conciliation Act, 1996 (for short 'the Act') seeking the appointment of a sole Arbitrator for the determination of all disputes and differences between the applicant and the respondent as per the Memorandum of Understanding executed in between them.

(2.) The petitioner claims to be a Society registered under the Travancore Cochin Literary Scientific and Charitable Societies Registration Act, 1955 engaged in the field of providing management consultancy services to other institutions. The 1st respondent represented by the 2nd respondent, is also a Society registered under the aforesaid Act involved in providing management education in Kerala. On 23/7/2016, the petitioner and the respondents are said to have entered into a Memorandum of Understanding as per which the petitioner agreed to provide consultancy services for the purpose of improving curriculum standards, training methodologies, career orientation etc. to the respondents. It is stated that the petitioner took all steps for attaining the standards promised by them and achieved the same within a very short time. The term of Memorandum of Understanding was for a period of ten years. However, the petitioner would allege that the respondents started making lame excuses to avoid payment of consultancy fee and expenses after the achievement of the objectives. It is the further allegation that the respondents started raising frivolous issues and demanded unilateral amendments to the Memorandum of Understanding and delayed paying the dues to the petitioner. To the reminder letter dtd. 14/12/2021 issued by the petitioner in connection with outstanding invoices, the respondents sent a letter dtd. 16/12/2021 terminating the Memorandum of Understanding with immediate effect on the basis of allegations which the petitioner term as unfounded and frivolous. Thereupon, the petitioner is said to have issued a letter dtd. 21/12/2021 calling upon the respondents to pay the outstanding dues of Rs.5,52,28,657.00 and other potential dues. As the respondents disputed the above liability vide letter dtd. 8/1/2022, the petitioner is said to have issued a letter dtd. 14/1/2022 seeking the concurrence of the respondent for conciliatory discussions for an amicable settlement of the issue. The respondents allegedly evaded the request for amicable settlement for one reason or other. The respondents also disagreed for the appointment of a sole Arbitrator in accordance with Clause 8(b) of the Memorandum of Understanding as suggested by the petitioner by the notice dtd. 18/10/2022. Upon the above grounds, the petitioner has approached this Court with this Arbitration Request under Sec. 11(5) of the Act for the appointment of a Sole Arbitrator for the resolution of the disputes with the respondents.

(3.) The respondents appeared through their counsel and filed counter affidavit disputing the right and authority of the signatory to this Arbitration Request to approach this Court as a representative of the petitioner Society. According to the respondents, the person claiming to be the authorised representative of the petitioner is not competent to sue for and on behalf of the petitioner. The respondents further contended that there was no valid and enforceable arbitration agreement and that the dispute sought to be resolved is not arbitrable. The respondents challenged the legal sanctity of the Memorandum of Understanding alleging that it was executed without any authority by the petitioner. It is the further allegation of the respondents that the petitioner failed to achieve the standards of consultancy services promised to be provided and that the petitioner deceitfully charged and siphoned off enormous amounts as consultancy charges and other claims. For the above reasons, the respondents seek dismissal of the Arbitration Request.