TaxTMI 
TaxTMI 
2023 (1) TMI 1352
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....he Motoren Werke (BMW) AG, having its registered Office at Bayerische Motoren Werke Aktienge sells chaft Petuelring 130D-80788, Munich, Germany. 4. The petitioner and the respondent No. 1 entered into two separate contracts, namely the Dealership Agreement for the sale of BMW vehicles in the State of Gujarat in 2007 and the Deferred Payment Facility Agreement (DPFA) dated 15th November, 2010. From time to time, new Agreements were executed or renewal letters were issued to continue the dealership. The last Dealership Agreement was entered into on 14th January, 2015 between the petitioner and the respondent No. 1 the Dealership Agreement dated 14th January, 2015 which last came to be renewed for the period of one year i.e., till 31st December, 2017, vide Letter dated 09th January, 2017. Both the Agreements contain an Arbitration Clause. 5. Similarly, the petitioner entered into two separate Agreements with respondent No. 2 namely, the Floor Plan Financing Agreement dated 15th November, 2010 (hereinafter referred to as "FFA") and the Working Capital Demand Credit Facility Agreement (WCDCFA) dated 28th June, 2014; each of these two Agreements also contained an Arbitration Clause. 6....
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....under section 7 of the Insolvency and Bankruptcy Code in CP(1B) No. 161 of 2017 stands admitted. 9. It is submitted that the petitioner has also filed the application bearing No. I.A. 300/2018 under Section 65 in CP (IB) No. 161/2017 of the Insolvency and Bankruptcy Code, 2016 against the respondents. The petitioner has also filed the petition bearing No. O.M.P. (I) (COMM.) 559/2017 under Section 9 of A & C Act, 1996 seeking various reliefs against the respondents. The said petition was dismissed vide Order dated 15th January, 2018. 10. In or around April, 2018, the petitioner filed information vide Case No. 11/2018 before the Competition Commission of India against the respondents for abuse of dominant position and anti-competitive agreement/practices. The same has also been dismissed vide Order dated 30th May, 2018. An Appeal was preferred before the National Company Law Appellate Tribunal vide Competition Appeal No. 52/2018 which has also been dismissed vide Order dated 25th November, 2019. 11. Thereafter, the petitioner issued the Notice dated 18th July, 2018 for invoking arbitration for referring the matter for composite arbitration between the petitioner and the respondent....
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....er and the respondent No. 2. Paragraph 8 of the Notice of Invocation is relevant which reads as under: "8. Parsoli shall issue another letter proposing name of the arbitrator within two weeks. BMW Group is hereby called upon to propose an arbitrator within two weeks of receipt of this letter." 20. It is claimed that the communication dated 18th July, 2018 cannot even remotely be termed as Notice of Invocation of Arbitration under Section 21 of A & C Act, 1996. This baseless communication is against the contractual procedure between the petitioner and respondent No. 2. 21. It is asserted that a similar petition with the similar background involving the respondent No. 2 in the case of Libra Automotives Private Limited vs. BMW India Private Limited & Anr. ARB.P. 163/2019 has been dismissed on 09thJuly, 2019 wherein this Court held as under: "..It can also not be ignored that the invocation of the arbitration agreement is also misconceived. The invocation notice is unspecific and not as per procedure prescribed under the arbitration agreement. Petitioner has not proceeded as per the agreed procedure under any of the Arbitration Agreements. The Petitioner has rather called upon th....
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....and 2 are not privy to any of the transactions. The cause of action against the respondent No. 1 is non-renewal of Dealership Agreement with which the respondent No. 2 has no concern. It is, therefore, submitted that the present petition is without any merit and is liable to be dismissed. 28. The respondent No. 1 in its Reply has asserted that there is a mala fide attempt on the part of the petitioner to mislead this Court; the petition was filed way back on 09th December, 2019, but was kept under defect with the Registry till such time the petitioner got listed the petition before this Court on 02nd June, 2020. This is further evident from the fact that the baseless Notice of Invocation of Arbitration dated 18th July, 2018 has been issued to both the respondents to which the Reply dated 07th August, 2018 has already been filed. 29. It is asserted that the present petition is not maintainable either in law or in facts on the ground that the Agreements are independent between the petitioner and the respondent No. 1 and between the petitioner and the respondent No. 2. Moreover, Arbitration Clauses as contained in the Agreements are independent and distinct and provide a distinct me....
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....e one composite referral to the Arbitrator. While the petitioner has strenuously tried to establish that all the four Agreements were inter-dependent and working of one was facilitated by the other, but it cannot be overlooked that these were four independent Agreements, two with respondent No. 1 and two with respondent No. 2. It may be that the Working Capital Demand Credit Finance Facility Agreement may have been entered into with respondent No. 2 in order to honour the Dealership Agreement with respondent No. 1 and the other two were ancillary Agreements for facilitating this Agreement, but the fact remains that each was an independent Agreement. There may have been some interdependency in so much as for discharging the obligations under one Agreement, the petitioner may be getting requisite support from the other Agreements, but that in itself cannot be a ground to refer the four matters as one composite matter for arbitration to a single Arbitrator. 36. The respondent has further claimed that all four Agreements have a separate mechanism for arbitration. The same may be stated as under : (i) The Dealership Agreement and the Deferred Payment Facility Agreement with responden....
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....e chosen to submit themselves to the jurisdiction of this Court and thus, the place or the venue even if different, cannot be a ground to reject the petition. The Supreme Court in Mankastu Impex Pvt. Ltd. vs. Airsual Ltd. (2020) 5 SCC 399 had observed that the seat and venue of arbitration need not be one and the same. The venue of an arbitration is the physical location where the proceedings are conducted and are determined based on the convenience of the parties and is solely their prerogative. This determination of venue, however, does not affect the right of the parties to determine the law governing the arbitral proceedings. 39. The third objection which has been taken is that there cannot be a composite referral of the disputes under the four Agreements with respondent Nos. 1 and 2 to a common arbitrator. While the petitioner has vehemently made an attempt to show that all these four Agreements are inter-connected and have been entered into to facilitate the Dealership Agreement, but as already observed they all are independent. The petitioner has made a reference to Chloro Controls (supra) in its support, wherein it was observed that the attendant question was whether the m....
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....orporation 2021 (2) SCC 1 to state that there are no arbitrable disputes under the Dealership Agreement as the petitioner has failed to follow the procedure as envisaged in Clause 13.4 of the Agreement which stipulates the parties to undergo a consultation before invoking arbitration. This argument also does not hold water for the simple reason that there is no specific procedure for consultation and so long as the parties were corresponding with each other about their disputes and a Notice was given for invoking arbitration, the pre-requisite of consultation is essentially met. 45. The respondents have further contended that the alleged disputes are deadwood and need not be referred to arbitration. It is asserted that an identical dispute has been adjudicated against the petitioner by the Competition Commission of India vide Order dated 30th May, 2018 which has been reaffirmed in the Appeal by National Company Appellate Law Tribunal (NCLAT) vide judgment dated 25th November, 2019 with an observation that the allegations leveled by the petitioner are merely a counter blast. 46. An identical issue as raised in the present petition was also raised before National Company Law Tribun....