Omnia Technologies P.
Ltd. Vs W.M.A. Van Loosbroek
J U D G M E N T
T.S. THAKUR, J.
1.
The
respondent is a Dutch citizen. He entered into an agreement dated 14th January,
2008 with the petitioner-company whereby the latter appointed him as its
marketing representative to promote sale of RFID Tags and 2Components manufactured
by the petitioner-company in European market. Clause (1) of the agreement executed
between the parties stipulated the terms on which the respondent was to work as
the petitioner's representative. It reads: "1. OMNIA does hereby appoint PIM
as its Representative for Europe, and PIM hereby accepts the aforesaid appointment,
upon the following terms:
a. PIM would market the Products
manufactured by OMNIA, on an exclusive basis, to his clients in Europe, and
would be responsible for obtaining the business in the nature of contracts, for
supply by OMNIA.
b. PIM would be the
front-end, dealing with the clients in Europe, and OMNIA would be introduced as
the Indian Parent Company.
c. In all situations, PIM
would be required to introduce the two parties to this Agreement, as a single entity,
responsible for managing clients/prospective clients in the whole of Europe.
d. All proposals, documentation
submitted, would be in the name of OMNIA as the Indian Parent Company, with PIM
being reflected as Sole Representative in Europe."
2.
The
agreement in Clauses 2 and 3 thereof set out the obligations which the
respondent was to discharge and those to be discharged by the petitioner. Other
conditions like remuneration etc. were also stipulated by the agreement including
obligations cast upon the parties after termination of the agreement. Clause 13
of the agreement relevant in this regard, reads: "13. Obligations Upon
Termination
a. The termination of this
agreement shall not affect any liability of either party to the other, accruing
prior to the date of termination, or arising out of this agreement.
b. Upon termination, PIM
agrees to immediately discontinue the use of any trademarks or trade names in
whole or in part belonging to OMNIA.
c. After termination PIM
shall not represent, and shall not continue any practices, which might take it,
appear, that he is still an authorized OMNIA agent and shall permanently discontinue
any use of the word "OMNIA" thereform, all without any expenses to
OMNIA.
d. PIM shall return all manuals,
informational materials, instruction booklets, and all data and information in printed
form or stored in floppies, CD-ROMS, computer diskettes, or in any other
version or medium that was given by OMNIA pursuant to this agreement, immediately
on termination of this agreement. Electronic mail messages are excluded. PIM shall
destroy or render unusable all other proprietary material and copies thereof,
which for any reason cannot be delivered to OMNIA. In such event, PIM shall certify
in writing to OMNIA that all proprietary material has been delivered to OMNIA
or destroyed and that PIM has discontinued use of the same.
e. Both the parties agree
to fulfill all obligations to each other under all the work orders in force at the
time of termination of this agreement until the completion of the services
specified in the work orders."
3.
It
is common ground that the agreement in question was terminated by the parties in
terms of another agreement dated 29th February, 2008 executed between the parties.
This termination purported to be in conformity with the provisions of Clause 11
of the Original Agreement. The Petitioner-company's case in the present petition
under Section 11(6) and (9) of the Arbitration and Conciliation Act, 1996 is
that the respondent has committed a violation of the Original Agreement inasmuch
as obligations cast upon the respondent under clause of the agreement (supra)
have not been discharged by the respondent thereby giving rise to disputes that
are in terms of Clause 15 of the original agreement arbitrable. The petitioner-company
appears to have invoked the arbitration clause and asked for appointment of an Arbitrator
but since the respondent refused to do the needful, the petitioner has filed the
present petition and prayed for the appointment of an independent Arbitrator to
adjudicate upon the said disputes.
4.
Respondent
has appeared and filed a counter-affidavit in which it was, inter alia, asserted
that there is no subsisting `arbitrable' disputes to call for the appointment
of an Arbitrator. The respondent has in this regard relied upon Clause 4 of the
termination agreement which reads as under: "
Subject to the signing
of this termination agreement by the parties, the parties hereby grant each other
full and final discharge from all claims, rights and obligations arising out of
or relating to the termination of the Representative Agreement. The parties
acknowledge that thereafter no claims, rights or obligations will remain existing
on whatever ground or whatever relation between the parties in respect of the
issue at hand. This termination agreement constitutes the entire agreement and
understanding between the parties."
5.
When
this petition came up for hearing before me on 15th November, 2010, it was
pointed out to learned counsel for the respondent that in case this Court was
to pronounce upon the effect of Clause 4 of the termination agreement finally
and further in case this Court were to hold that Clause 4 did not prevent the petitioner
from raising the disputes regarding post-termination obligations of the parties,
the Arbitrator appointed by this Court shall have no option but to fall in line
and accept that determination as final and binding on the parties. Learned
counsel for the respondent was, therefore, asked to take instructions whether interpretation
of Clause 4 which was by itself a disputed matter and requires to be
adjudicated upon, could be left to be determined by the Arbitrator.
Learned counsel for the
respondent has, in response filed a letter consenting to the appointment of an Arbitrator
for adjudication of all issues including the existence of arbitrable disputes by
the Arbitrator so appointed. The relevant portion of the letter filed on behalf
of the respondent is as under: "In this connection, learned Senior
Advocate Mr. U.U. Lalit had mentioned the subject arbitration petition on Friday
February 4, 2011 before Hon'ble Justice T.S. Thakur in Court No.8 and informed
the Hon'ble Court that the Respondent has consented to the appointment of the arbitrator
by the Hon'ble Supreme Court of India and further consented to raising all issues
including the existence of the arbitral dispute before the appointed
arbitrator. As the power of attorney holder of the respondent is not in the
country, I, the Advocate on Record of the Respondent after having taken instructions
would like to place on record through this letter that a) The Respondent has consented
to the appointment of arbitrator b) the Respondent has consented to raising all
the issues including the existence of the arbitral dispute before the said arbitrator."
6.
In
the light of the above I see no reason why the present petition cannot be allowed
and all disputes including the dispute regarding interpretation and effect of
Clause 4 of the termination agreement referred for adjudication by arbitration.
87. I accordingly allow this petition and refer all disputes between the
parties relating to and arising out of agreement dated 14th January, 2008 and
termination agreement dated 29th February, 2008 including Clause 4 thereof to the
sole Arbitration Mr. Justice Anil Dev Singh, former Chief Justice of Rajasthan High
Court. The parties are directed to appear before the nominated Arbitrator on 2nd
April, 2011. The Arbitrator shall be free to fix his fee and charges and the ratio
in which the same shall be paid by the parties. Registry shall forthwith
forward a copy of this order along with a copy of the petition to the worthy Arbitrator
for information and necessary action.
.................................J.
(T.S. THAKUR)
New
Delhi
March
3, 2011
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