VINAYAK ARTS Vs. INDUSIND BANK LTD. AND ORS.

JUDGEMENT

(1.) THIS application is preferred to have appointment of independent sole arbitrator as per Section 11 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act of 1996') to resolve the dispute between the parties. Briefly stated, facts of the case are that the applicant, a partnership firm, entered into an agreement for foreign exchange transaction with respondent Indusind Bank Ltd. on 26.2.2013. On the same day an agreement was executed between the applicant and the respondent wherein foreign exchange upto Rs. 80 lacs was agreed to be booked by the respondent for transactions entered by the applicant. On basis of it the applicant entered into an agreement with regard to forward contract dealing in a tune of Euro 70,000/ - and US $ 25,000/ -. On 12.6.2013 another forward contract for a sum of Rs. Euro 16,000/ - was signed. The agreement was executed at Jodhpur and transaction referred above also undertook at Jodhpur.

(2.) AS per clause 14 of the agreement for foreign exchange transactions dated 26.2.2013, FX contract shall be governed by and construed in accordance with the laws of India. As per clause 15, any dispute, difference, controversy or claim arising out of or in connection with the agreement shall be resolved by arbitration. Clause 15 referred above reads as under: -

(3.) CERTAIN disputes cropped up between the parties and the respondent bank on 13.9.2013 repudiated the agreement dated 26.2.2013. The applicant to get the dispute resolved sent a legal notice dated 31.12.2013 to the respondent bank to invoke arbitration clause. Shri Murlidhar Vaishnav, retired District Judge) was proposed as arbitrator of the applicant, however, by a communication dated 24.1.2014 the respondent refused to accept the arbitrator with assertion that in view of the provisions of clause 15 of the agreement, arbitration could be organised before the Indian Merchants Chambers at Mumbai. On being failed to get arbitrator nominated by the respondent bank, this application was filed on 10.3.2014.