Quick Heal Technologies Limited V. M/S. Ncs Computech Private, 5 June 2020
FACTS OF THE CASE:
The Petitioner Company is engaged within the business of development and manufacture of anti-virus software under the name "Quick Heal", whose products are popularly referred to as "Quick Heal Range of Products". Respondent is a Private Limited Company and is carrying on the business of distribution of software products.
In 2011, the administrators of Respondent approached the Petitioner and represented that they were desirous of selling and distributing the "Quick Heal Range of Products" developed and made by the Petitioner and requested the Petitioner to appoint them as 'Distributors' for an equivalent.
According to the discussions between the said parties, on 2nd April 2011, the Petitioner entered into an Agreement with the Respondents. Clause 17 of the said Agreement pertains to Dispute Resolution
the balance amount payable by Respondent to the Petitioner as of 31st March 2013, was Rs.32 Lakh. Despite the confirmation of balance, the Respondents failed to pay the amounts to the Petitioner. Since disputes arose between the parties, the Petitioner, through a letter dated August 7th, 2017 addressed to the Respondent invoked the Arbitration Agreement contained in Clause 17 of the said Agreement and proposed the name of the Mr. S.R.Sathe as the Sole Arbitrator. Sub-clause (a) of Section 17 of the said Agreement, provides that before commencing the arbitration, the parties through their designated personnel, 'shall' discuss all the disputes under the Agreement in an attempt to resolve. The said process has in a realistic sense been exhausted, as the repeated requests made by the Petitioner to the Respondents to pay the amounts and settle the matter have failed.
The Petitioner is, therefore, constrained to fled the above Arbitration Petition under Section 11 of the Act seeking appointment of a Sole Arbitrator. The Respondent has filed its Affidavit back. It is only just in case of failure to resolve the disputes by conciliation that the parties may comply with referring their dispute to Arbitration as began in Clause 17 and such amicable discussion for resolution has not taken place between the designated personnel of every party and therefore the Petitioner has filed this Petition by by-passing the agreed procedure, which is mandatory/binding on the parties.
ISSUE OF THE CASE:
The issue of this case is that if an arbitration clause, which discusses a discretion to the disputing parties to invoke arbitration, would it still qualify as an arbitration clause.
DECISION OF THE COURT:
The court, in the case, held that since there was no scope for settlement between the parties, the invocation of the arbitration without complying with the pre-arbitration mediation clause was not fatal. The court then said that if the clause was a valid arbitration clause then in the instant case there was no pre-existing agreement between the parties which stated that they will or they should refer their disputes to arbitration. The court interpreted the terms “may” and “shall” used in the said clause and held that the parties clearly made it optional for them to refer their disputes to arbitration by using the word may.
This Article Does Not Intend To Hurt The Sentiments Of Any Individual Community, Sect, Or Religion Etcetera. This Article Is Based Purely On The Authors Personal Views And Opinions In The Exercise Of The Fundamental Right Guaranteed Under Article 19(1)(A) And Other Related Laws Being Force In India, For The Time Being.