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Reva Electric Car Company P. Ltd. Vs. Green Mobil

Appellants: Reva Electric Car Company P. Ltd. Vs. Respondent: Green Mobil

Decided On: 25.11.2011, (2012) 2 SCC 93, Bench- Hon'ble Justice S.S. Nijjar

Facts: The Petitioner has filed the present application under Sections 11(4) and (6) of the Arbitration and Conciliation Act, 1996 read with paragraph 2 of the Appointment of the Arbitrators by the Chief Justice of India Scheme, 1996. It is stated that the parties had entered into a legally valid and enforceable Memorandum of Understanding ('MOU') dated 25th September, 2007, providing, inter alia, for the respective obligation of both the parties in connection with the marketing of the cars of the Petitioner.

The Petitioner makes a reference to various requests made by the Respondent for supply of cars in terms of MOU on 22nd April, 2008; 24th August, 2008; and 1st April, 2009. The Petitioner further claims that sometime in September 2009, disputes arose between the parties. The Petitioner, therefore, claimed that the Respondent did not have in place the necessary resources to build the brand of the Petitioner. Consequently, through e-mail dated 25th September, 2009 the Petitioner requested the Respondent to immediately stop sales and marketing activities on their behalf and take necessary steps of providing sales and service to existing car owners, for such time the Petitioner appointed new distributor. The Petitioner claims that the aforesaid e-mail duly constituted the termination of the contractual relationship between the parties as covered under the MOU.

Held: Section 16(1)(a) of the Arbitration and Conciliation Act, 1996 provides that an arbitration clause which forms part of the contract shall be treated as an agreement independent of the other terms of the contract. Accepting the submission of Ms Ahmadi that the arbitration clause came to an end as the MoU came to an end by efflux of time on 31-12-2007 would lead to a very uncertain state of affairs, destroying the very efficacy of Section 16(1).

As noticed earlier, the disputes that have arisen between the parties clearly relate to the subject-matter of the relationship between the parties which came into existence through the MoU. Clearly, therefore, the disputes raised by the petitioner need to be referred to arbitration. Under the arbitration clause, a reference was to be made that the disputes were to be referred to a single arbitrator. It is necessary for this Court to appoint the arbitrator since the parties have failed to appoint an arbitrator under the agreed procedure,

In exercise of powers under Sections 11(4) and (6) of the Arbitration and Conciliation Act, 1996 read with Para 2 of the Appointment of Arbitrators by the Chief Justice of India Scheme, 1996, hereby appoint Hon'ble Mr Justice R.V. Raveendran, r/o 8/2, Krishna Road, Basavangudi, Bangalore, Former Judge of the Supreme Court of India, the sole arbitrator to hear the disputes between the parties, on such terms and conditions as the learned sole arbitrator deems fit and proper. Undoubtedly, the learned sole arbitrator shall hear the disputes between the parties without being influenced by any prima facie opinion expressed in this order, with regard to the respective claims of the parties.

The Registry is directed to communicate this order to the sole arbitrator to enable him to enter upon the reference and decide the matter as expeditiously as possible. The arbitration petition is accordingly disposed of.


  • Section 16 of Arbitration and Conciliation Act
  • (2012) 2 SCC 93
  • Supreme Court Judgement Dated- 25.11.2011

BY : Shardul Srivastava

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