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REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICITION
ARBITRATION PETITION NO.10 OF 2010
Omnia Technologies P. Ltd. ...Petitioner
Versus
W.M.A. Van Loosbroek ...Respondent
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
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Components 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.”
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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,
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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 13 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
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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:
“4. 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.”
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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
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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.
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7. 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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