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Judgment
Aravind Kumar, J.—Heard Sriyuths Sunil Kumar and Bharath, learned Advocates appearing for petitioner.
Petitioner is seeking for appointment of Mr. Ramakrishna Bhat, Advocate, Bangalore as sole Arbitrator or in the alternate, an Arbitrator as provided under the Franchise Agreement dated 15.05.2012 (Annexure-C) contending inter alia that certain disputes have arisen between the parties and as agreed to under Clause 12 of the said Franchise agreement, matter can be resolved through arbitration and as such, petitioner is seeking for appointment of an Arbitrator. Clause 12 of the Franchise Agreement reads as under:
"12. DISPUTE RESOLUTION
The following provisions apply with respect to dispute resolution:
A. Arbitration. Any dispute or difference which cannot be resolved pursuant to the provisions of Section 12B within 30 (thirty) days of the relevant mediation notice having been given, the parties may refer the dispute or any unresolved matter to arbitration. All arbitration shall be conducted in accordance with the Arbitration and Conciliation Act, 1996 subject to the following conditions:
(i) The Parties shall mutually appoint 1 (one) arbitrator or either party may approach the High Court of Bangalore to appoint a sole arbitrator. The arbitrators appointed must have at least 5 (five) years experience in the area of law dealing with franchise agreements.
(ii) The place of arbitration shall be Bangalore and the arbitral proceedings shall be conducted in English.
(iii) Any arbitration must be resolved on an individual basis and not joined as part of a class action or the claims of other parties.
(iv) The awards and findings of the arbitrators shall be final and binding on the parties. The arbitrators must follow the law and not disregard the terms of this Agreement.
The arbitrators may not under any circumstances: (i) stay the termination or proposed termination of this Agreement; (ii) assess punitive or exemplary damages; or (iii) make any award which extends, modifies or suspends the Terms of this Agreement or any reasonable standard of business performance that Franchisor set.
Before the filing of any arbitration, the parties agree to mediate any dispute, under confidentiality, that does not include injunctive relief or specific performance actions covered under Section 12C, provided that the party seeking mediation must notify the other party of its intent to mediate prior to the termination of this Agreement. Mediation will be conducted by a mediator or mediation program agreed to by the parties and will take place in Bangalore, India. Persons authorized to settle the dispute must attend any mediation session. The parties agree to participate in the mediation proceedings in good faith with the intention of resolving the dispute if at all possible within 30 (thirty) days of the notice from the party seeking to initiate the mediation procedures.
B. Mediation Procedure:
The party hereto who issues a mediation notice must briefly describe in the notice the matter to be discussed, their position in respect of that matter and their evidence and arguments in support of their position. Within 10(ten) Business Days of the service of a mediation notice, the other party hereto must give a written response to the party who issued the notice to briefly describe and discuss their position in respect of the matter and their evidence and arguments in support of their position. The parties must mutually decide on a mediator and resolve and close the matter. In the event the parties fail to resolve the dispute through mediation within a period of 30 (thirty) days from the party seeking to enter into mediation, the parties may refer to arbitration." 3. Sri Bharath, learned Advocate appearing for petitioner would also contend that petition in question has been preceded by several communications forwarded by petitioner to respondent through e-mails which has not been responded to and petitioner left with no other option, got issued legal notice on 11.12.2014 (Annexure-F) exercising its right to seek appointment of Arbitrator as provided under clause 12-A of the agreement by indicating the name of arbitrator to be appointed as a sole Arbitrator. On account of there being no response to the said notice which has been duly received by the respondents, petitioner is perforced to seek for appointment of an Arbitrator through this petition.
Clause 12-A of the Franchise Agreement which has been pressed into service when perused, would indicate that only such dispute which cannot be resolved through mediation, parties can seek for being resolved through arbitration. Clause 12-A is specific, clear and unambiguous on this issue. In fact, said clause specifically excludes the parties invoking arbitration clause without taking recourse to Mediation and it would indicate that it had agreed between parties that before initiating for appointment of arbitrator, both parties have agreed to mediate the dispute under confidentiality which does not include injunctive relief or specific performance actions covered under clause 12-C of the said Franchise Agreement.
Undisputedly, petitioner has not invoked clause 12-B of the agreement indicating its intention to resolve the dispute through mediation before taking recourse to appointment of Arbitrator. Sri Bharath, learned Advocate appearing for petitioner has drawn the attention of the Court to one of the e-mails which has been forwarded to respondents by petitioner dated 20.02.2014 to contend that contents of the said e-mail would suggest the intention of the petitioner was to resolve the dispute by mediation and as such, said notice be construed as one issued in compliance with clause 12-B of Franchisee Agreement. This Court is not inclined to accept the said submission for the simple reason that contents of the said e-mail dated 20.02.2014 which is at page 135 of case papers does not even remotely suggest about the intention of petitioner to get the dispute resolved through mediation. In other words, petitioner has not exhausted alternate dispute resolution mechanism agreed with respondents as could be seen from clause 12-A of the agreement. This view is also fortified by the contents of legal notice dated 11.12.2014 (Annexure-F) which is issued by petitioner to respondents calling upon them to concur with the appointment of Arbitrator as suggested in the said notice which is in compliance with Section 11(5) of the Act. There is not even an whisper in the said notice of petitioner having expressed its intention to resolve the dispute through mediation before initiating proceedings to get an Arbitrator appointed.
At the cost of repetition, it requires to be noticed that petitioner without invoking the clause 12-B of Franchise Agreement which provides for resolution of the dispute through mediation, has invoked clause of 12-A of Franchise Agreement which provides for appointment of Arbitrator and said recourse can be taken by both parties only after they seek resolution for dispute being resolved through mediation and not earlier to the same. Hence, present petition has to be held as premature. In that view of the matter, petition is liable to be dismissed and accordingly, it stands dismissed.
However, it is made clear that dismissal of this petition would not come in the way of petitioner issuing fresh notice as provided under clause 12-B of the Franchise Agreement and approach this Court thereafter if so advised.