M/S SUPREMA INC Vs. 4G INDENTITY SOLUTIONS PVT LTD

Supreme Court of India (Single Judge)

Arbitration Case, 8 of 2015, Judgment Date: May 13, 2015

                                                              NON-REPORTABLE


                        IN THE SUPREME COURT OF INDIA

                         CIVIL ORIGINAL JURISDICTION

                    ARBITRATION CASE (CIVIL) NO.8 OF 2015


M/S SUPREMA INC                                                 ...PETITIONER

                                 VERSUS

4G IDENTITY SOLUTIONS
PVT. LTD.                                                       ...RESPONDENT


                               J U D G M E N T


1.    The petitioner Company which is incorporated under  the  laws  of  the
Republic  of  Korea  carries  on  the  business  of   biometrics   research,
development and manufacturing.  It has  invoked  the  jurisdiction  of  this
Court under Section 11(6) of the  Arbitration  and  Conciliation  Act,  1996
(hereinafter referred to as “the Act”) for appointment of an  arbitrator  to
go into the disputes and differences that have arisen  with  the  respondent
Company which is a private limited company incorporated in India  under  the
Companies Act, 1956.

2.    The averments made in the present application would go  to  show  that
pursuant to  the  contract  awarded  by  Electronics  Corporation  of  India
Limited (hereinafter referred to as “the ECIL”) to  the  respondent  Company
for supply of Real Scanner G 10 fingerprint  scanner  (hereinafter  referred
to as “the  product”)  the  respondent  Company  in  turn  entered  into  an
agreement with the petitioner Company for supply  of  10,500  units  of  the
product in question.

3.    According to the petitioner Company, the  aforesaid  10,500  units  of
the product was duly supplied and delivered to the  respondent  Company  and
bills totalling a sum of USD 3,212,000 were raised  on  the  respondent  for
payment.

4.    The efforts of the petitioner to receive  payment  of  its  Bills  for
supply of the product did not succeed.  Consequently, the petitioner  issued
notice of arbitration dated 20th June, 2013 to the respondent  in  terms  of
the Master Agreement dated 15th July, 2011 entered into by and  between  the
parties.  The said reference to the Arbitration was in terms of  Article  16
of the aforesaid Master Agreement.

5.     Pursuant  thereto,  arbitration   commenced   under   the   Singapore
International  Arbitration  Act.   The  proceedings  in   Arbitration   were
objected to by the respondent on the  ground  that  the  Singapore  Arbitral
Tribunal had no jurisdiction as the  purchase  orders  in  question  had  no
connection with the Master Agreement.   In  the  objections  raised  by  the
respondent it was, however, stated  that  the  purchase  orders  though  not
relatable to the Master Agreement were governed  by  the  Supply  Agreement.
The Supply Agreement contained a specific  dispute  resolution  clause  i.e.
D12 which is to the following effect:

“All disputes and differences  arising  in  connection  with  this  contract
shall be referred to 'the arbitration  authority  under  provisions  of  the
Arbitration and Conciliation Act, 1996'”


6.    Accordingly, the Singapore Arbitral Tribunal by  an  award  dated  8th
April, 2014 held that it had no jurisdiction to decide the dispute.  In  the
aforesaid  circumstances,  the  present  petition  has  been  filed  seeking
appointment of an Arbitrator.

7.    We have heard Shri Chinmoy Pradip  Sharma,  learned  counsel  for  the
petitioner.  In spite of due  service  of  notice,  the  respondent  is  not
represented.  Though the petition could have been  heard  ex  parte  on  the
date fixed i.e. 27th April, 2015, a further opportunity was granted  to  the
respondent and the case was adjourned to 11th May, 2015.  Even on 11th  May,
2015 there is no representation on behalf of the respondent.  In  the  above
circumstances, there is no option but  to  proceed  ex  parte   against  the
respondent in the matter.

8.    On a consideration of the averments made in  the  present  arbitration
petition and the oral submissions advanced by the learned  counsel  for  the
petitioner, it is clear that disputes and differences  have  arisen  between
the parties with regard to the entitlement of the petitioner to receive  the
amount of bills raised by it i.e. USD 3,212,000.  Clause D12 of  the  Supply
Agreement,  which  according  to  the   respondent,   governs   the   matter
specifically provides for reference of all disputes and differences to  “the
arbitration authority under provisions of the Arbitration  and  Conciliation
Act, 1996”.

9.    In the above view of the matter, there can be no manner of doubt  that
the petitioner is entitled to  have  its  claim  to  receive  the  aforesaid
amount of the bills adjudicated by an  Arbitrator  appointed  by  the  Court
under Section 11(6)  of  the  Act.    Consequently,  we  allow  the  present
petition and appoint Shri Justice B. Sudershan  Reddy,  a  former  judge  of
this Court as the Arbitrator and request him to resolve the dispute  between
the parties at an early date.  The terms of appointment of Shri  Justice  B.
Sudershan Reddy as the Arbitrator will be settled in consultation  with  the
parties.
10.   Let this order be communicated to the learned Arbitrator so  that  the
arbitration proceedings  can  commence  and  conclude  as  expeditiously  as
possible.

11.   The arbitration petition is disposed of in the above terms.

                                          ................................J.
                                                              (RANJAN GOGOI)

NEW DELHI
MAY 13, 2015