A.M. SHIKAR Vs. KOHINOOR INTERNATIONAL GENERAL TRADING

JUDGEMENT

(1.) This appeal arises from the order passed by the Court of the Subordinate Judge of Kochi on 31.5.2016 on I.A.No. 676 of 2015 in O.S.No. 12 of 2015. By that order, the court below dismissed the application filed by the appellant under section 8 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as "the Act" for short) to pass an order referring the parties to arbitration and dismissing the suit. The brief facts of the case are as follows:

(2.) The respondent herein is a company registered at Dubai, United Arab Emirates. It is engaged in the business of trading in cashew nuts. It instituted O.S.No. 12 of 2015 in the Court of the Subordinate Judge of Kochi through its power of attorney, joining the appellant as the defendant and prayed for a decree allowing it to realise from the defendant the sum of Rs. 1,59,99,733.20 together with interest at 12% per annum from the date of suit till realisation. The respondent has in the plaint averred that it had supplied cashew nuts to the defendant on various occasions pursuant to a contract entered into between them on 30.4.2012 and yet another contract entered into on 17.5.2012. It is contended that though it has performed its obligations under the contract, the defendant who has taken delivery of the cashew nuts has committed breach of contract by not paying the amounts stipulated in the purchase contracts. The plaintiff has a further contention that the defendant is also liable to pay to it 10% of the contract value as penalty. Going by the averments in the plaint, the plaint claim of Rs. 1,59,99,733.20 consists of the sum of Rs. 60,65,155.20 being the amount due for the cashew nuts supplied as per the agreement dated 30.4.2012, the sum of Rs. 52,87,719.70 being the value of the cashew nuts supplied as per the agreement dated 17.5.2012 and Rs. 11,35,287.30 being the amount payable as penalty. O.S.No. 12 of 2015 was instituted in the Court of the Subordinate Judge of Kochi on 18.2.2015. Along with the plaint, the respondent had produced copies of the agreements dated 30.4.2012 and 17.5.2012, besides various other documents.

(3.) Upon receipt of summons, the appellant/defendant entered appearance and filed I.A.No. 676 of 2015 on 3.6.2015 under Section 8 of the Act with a prayer that an order may be passed referring the parties to arbitration and dismissing the suit. On the very same day, the appellant/defendant also filed his written statement which bears the date 27.5.2015. The appellant has in paragraph 3 of the affidavit filed by him in support of I.A.No. 676 of 2015 contended that plaint item 2 and 12 contracts (meaning thereby the contracts entered into on 30.4.2012 and 17.5.2012, copies of which were produced along with the plaint and are mentioned at serial Nos. 2 and 12 of the list of documents accompanying the plaint), contain identically worded arbitration agreements and therefore, the Sub Court does not have jurisdiction to proceed with the suit. The appellant contended that he is prepared and willing to have the dispute resolved by recourse to arbitration as provided in the contracts between the parties. The relevant averments in that regard contained in paragraphs 3, 4, 5 and 6 of the affidavit filed by the defendant in support of I.A.No. 676 of 2015 are extracted below: