1. This is a proceedings under Section 11(6) of the Arbitration and Conciliation Act, 1996 (the Act) for appointment of arbitrator.
2. The petitioner is the proprietor of a concern engaged in providing cable TV services. He has been providing cable TV services to his customers based on Annexure A-1 franchise agreement entered into with the respondent on 16.11.2010. Annexure A-1 agreement provides for resolution of the disputes by recourse to arbitration. It is stated by the petitioner that though the said franchise agreement was entered into for a period of ten years, on the expiry of the said term, the petitioner requested the respondent, in terms of A.R. No. 89 of 2019 3 Annexure A-4 letter to renew the agreement for another ten years and on the basis of the said request, the agreement continued without interruption. It is alleged by the petitioner that in the course of business, dispute arose between the parties as regards the amounts payable to the petitioner. It is also alleged by the petitioner that though the petitioner called upon the respondent to take steps to resolve the dispute by recourse to arbitration in terms of Annexure A-2 communication, the request made by the petitioner in this connection has not been acted upon by the respondent. The petitioner, therefore, seeks orders appointing an Arbitrator for resolution of the disputes raised by him.
3. A statement has been filed by the respondent. The stand taken by the respondent in the statement is that Annexure A-1 agreement was executed only for a period of 10 years; that the agreement has not been renewed thereafter; that the dispute raised is not in respect of the period covered by Annexure A-1 agreement and that the dispute is, therefore, A.R. No. 89 of 2019 4 not liable to be resolved by recourse to arbitration.
4. Heard the learned counsel for the petitioner as also the learned Senior Counsel for the respondent.
5. The learned counsel for the petitioner conceded that there is no agreement in writing to renew Annexure A-1 agreement. The learned counsel however contended that since it is admitted by the respondent that the business arrangement between the parties continued even after the expiry of the term specified in Annexure A-1 agreement, the petitioner is entitled to invoke the arbitration clause contained in the agreement for resolution of the dispute.
6. Per contra, the learned Senior Counsel for the respondent pointed out that only arbitration agreements in writing can be taken note of for the purposes of the proceedings under the Act. It was contended that insofar as it is admitted that there is no arbitration agreement between the parties in writing for the period after the expiry of the term specified in Annexure A-1 agreement, and insofar as the A.R. No. 89 of 2019 5 dispute raised is not a dispute arose during the period during which the arbitration agreement was in force, the same is one to be resolved otherwise than by recourse to arbitration.
7. I have given my thoughtful consideration to the contentions advanced by the learned counsel for the parties.
8. In the light of the provision contained in Section 11(6A) of the Act, and the decision of the Apex Court in Duro Felguera S.A. v. Gangavaram Port Limited, (2017) 9 SCC 729, the only point arising for consideration is as to whether there exists an arbitration agreement between the parties. The fact that there is an arbitration clause in Annexure A-1 agreement is not disputed by the respondent. The said arbitration clause reads thus:
Any dispute arising out this agreement shall be referred for Arbitration as per the provisions of the Arbitration and Conciliation Act 1996. There is no dispute also to the fact that Annexure A-1 agreement was one entered into for a period of ten years A.R. No. 89 of 2019 6 commencing from 16.11.2000 and the said term has expired on 16.11.2010.
There is also no dispute to the fact that no written agreement to renew Annexure A-1 agreement was entered into between the parties. There is also no dispute to the fact that the dispute, for the resolution of which the proceedings are initiated, is a dispute arose after 16.11.2010. The specific case of the petitioner is that in the light of Annexure A-4 request sent by the petitioner to the respondent on the expiry of the term of Annexure A-1 agreement, the very same agreement continued for another term of ten years and since the dispute arose during the said period, the petitioner is entitled to invoke the arbitration clause contained in Annexure A1 agreement for resolution of the dispute. The relevant portion of Annexure A-4 request, in terms of which the petitioner stated to have claimed extension of the term of Annexure A-1 agreement for a further period of ten years, reads thus:
“This is to inform that M/s Kannileth Cable T.V. Net Works wishes to extend the term of the above referred A.R. No. 89 of 2019 7 franchisee agreement for a further term of ten years and have a successful business relation with Asianet Satellite Communications Pvt. Ltd.”
The respondent has no case that they have not received Annexure A-4 request. On the other hand, as regards the said case, the stand taken by the respondent is that the arrangement continued only for collection of subscription charges. The relevant portion of paragraph 10 of the statement of the respondent wherein the aforesaid admission is made reads thus:
“10. It is submitted that on expiry of ten years, the agreement was not renewed. It was not extended. However the arrangement for collection of subscription charges alone continued.”
The pleadings of the respondent in the statement filed by them indicate beyond doubt that in terms of the franchise agreement entered into between the petitioner and the respondent, the petitioner was virtually acting as the agent of the respondent for collection of subscription charges. The pleadings of the A.R. No. 89 of 2019 8 parties would also indicate that the agreement was not renewed since there was dispute between the parties as to the share of the petitioner out of the collection charges. True, ordinarily, an offer is not accepted by mere silence on the part of the offeree, yet it does not mean that an acceptance always has to be given in so many words. Under certain circumstances, the offeree's silence, coupled with his conduct, which takes the form of a positive act, may constitute an acceptance, an agreement sub silentio. In the light of the aforesaid principle, according to me, on facts, it can be certainly inferred that the franchise agreement entered into between the petitioner and the respondent continued even after the expiry of the term made mention of in Annexure A-1 agreement, on the same terms except as regards the share of the petitioner out of the collection charges. In other words, the arbitration clause contained in Annexure A1 agreement is also very much a part of the arrangement continued after the expiry of the original term, especially in the absence of any A.R. No. 89 of 2019 9 material indicating a contrary intention. No doubt, in the light of Section 7 of the Act, the arbitration agreement for the purpose of the Act shall be one entered into between the parties in writing. Similarly, there cannot be any dispute to the proposition that the existence of the arbitration agreement is a sine qua non for making a reference under Section 11 (6) of the Act. But, I do not find any requirement under law that the arbitration clause in a case of this nature needs to be extended and re-affirmed in writing for the purposes of the Act, even while the parties were continuing the arrangement on the very same terms except as regards the share of the petitioner out of the subscription charges. The requirement under Section 7 of the Act is not desecrated according to me, since the original agreement containing the arbitration clause is one entered into in writing. Needless to say that the petitioner is entitled to invoke the arbitration clause contained in Annexure A1 agreement for resolution of t
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he dispute raised, not withstanding that the agreement was not renewed in writing. A.R. No. 89 of 2019 10 It is seen that in a similar matter, in Bharat Petroleum Corpn. Ltd. v. Great Eastern Shipping Co. Ltd., (2008) 1 SCC 503, the Apex Court has also taken an identical view. In the result, the arbitration request is allowed and Adv.Sreelal Warriar, Warriar & Co., Advocates, Arbitrators and Mediators, Warriam Road, P.B.No.5000, Cochin - 682 016 is appointed provisionally as the Arbitrator to resolve the dispute between the parties. The Registry is directed to obtain disclosure statement under Section 11(8) of the Arbitration and Conciliation Act, 1996 from the Arbitrator and place the matter before the court for confirmation of the appointment of the Arbitrator. The Registry shall retain the original of the disclosure statement and append a copy of the same to the order.