Mother Boon Foods Pvt Ltd vs Mindscape One Marketing Pvt Ltd
The respondent, a bread manufacturing company, entered into a manufacturing agreement with petitioner, Mother Boon on July 25, 2012. Under this agreement, the Petitioner was appointed as a contract manufacturer to manufacture and package bread as specified by the respondent. In July 2013 commercial production was commenced. The respondent was to take quality control measures. Disputes arose between the parties which led to the termination of the agreement. The respondent initiated the arbitration proceeding and appointed the arbitral tribunal. The petitioner did not participate in the arbitration. The arbitral award rendered in this proceeding was challenged by the petitioner under Section 34 of Arbitration and Conciliation Act,1996.
The arbitration clause here stated:-
“ 17.2 Arbitration'
17.2.1 Any and all claims, disputes, questions or controversies-involving the Parties and arising out of or in connection with or relating to this- Agreement, or the execution, interpretation, validity, performance, breach or termination hereof, including, without limitation, the provisions of this Clause (individually, a Dispute) that is not settled to the satisfaction of the Parties under Article 17.1 above shall be finally resolved by arbitration in accordance with the rules of Indian Arbitration and Conciliation Act, 1996 and any amendment of the same effected and enacted from time to time.
17.2.2 For the purpose of such arbitration, the Company shall appoint the Sole Arbitrator. 17.2.3 The place of arbitration shall be Delhi.”
The above-quoted excerpt indicates the appointment of a sole arbitrator was agreed upon between the parties. However, the Respondent appointed a three-member tribunal for arbitration.
Whether an oral demand or agreement can supersede a written agreement in an arbitration?
The court examined the arbitration clause in order to note that the clause indicates the appointment of a sole arbitrator by the respondent and raised objection on the basis of the three-member tribunal constituted by the respondent. The court ruled that in case the respondent by appointing a three-member tribunal wanted to adopt a fair attitude then this should have been done with the consent of the petitioner. According to the 1996 act, an arbitration agreement should be in writing, and since in this case, the agreement was in writing so it could not have surpassed an oral agreement or demand. The court also acknowledged the possibility that the petitioner may have agreed on a three-member tribunal orally. However, the procedure assumed by the respondent was held to be impermissible. Thus the court ruled that an oral agreement or demand cannot supersede a written agreement. The award rendered was set aside on the grounds that the arbitral tribunal appointed was not permissible in accordance with the agreement between the parties.
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.