REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICITION

ARBITRATION PETITION NO.10 OF 2010  

Omnia Technologies P. Ltd. …Petitioner

Versus

W.M.A. Van Loosbroek …Respondent

J U D G M E N T

T.S. THAKUR, J.

1. The respondent is a Dutch citizen. He entered into an  

agreement  dated  14th January,  2008  with  the  petitioner-

company whereby the latter appointed him as its marketing  

representative to promote sale of RFID Tags and  

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Components  manufactured  by  the  petitioner-company  in  

European  market.  Clause  (1)  of  the  agreement  executed  

between  the  parties  stipulated  the  terms  on  which  the  

respondent was to work as the petitioner’s representative. It  

reads:

“1. OMNIA  does  hereby  appoint  PIM  as  its  Representative  for  Europe,  and  PIM  hereby  accepts  the  aforesaid  appointment,  upon  the  following terms:

a) PIM  would  market  the  Products  manufactured by OMNIA, on an exclusive  basis, to his clients in Europe, and would  be responsible for obtaining the business  in the nature of contracts, for supply by  OMNIA.   

 b) PIM would be the front-end, dealing with  

the clients in Europe, and OMNIA would  be  introduced  as  the  Indian  Parent  Company.

c) In all situations, PIM would be required  to  introduce  the  two  parties  to  this  Agreement,  as  a  single  entity,  responsible  for  managing  clients/prospective clients in the whole of  Europe.

d) All  proposals,  documentation submitted,  would be in the name of OMNIA as the  Indian Parent Company, with PIM being  reflected  as  Sole  Representative  in  Europe.”   

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2. The agreement in Clauses 2 and 3 thereof set out the  

obligations which the respondent was to discharge and those  

to  be  discharged  by  the  petitioner.  Other  conditions  like  

remuneration  etc.  were  also  stipulated  by  the  agreement  

including obligations cast upon the parties after termination  

of the agreement.  Clause 13 of the agreement relevant in  

this regard, reads:

“13. Obligations Upon Termination

a) The  termination  of  this  agreement  shall  not  affect any liability of either party to the other,  accruing  prior  to  the  date  of  termination,  or  arising out of this agreement.

b) Upon termination, PIM agrees to immediately  discontinue the use of any trademarks or trade  names in whole or in part belonging to OMNIA.

c) After termination PIM shall not represent, and  shall  not continue any practices, which might  take it,  appear,  that he is  still  an authorized  OMNIA  agent  and  shall  permanently  discontinue  any  use  of  the  word  “OMNIA”  thereform, all without any expenses to OMNIA.

d) PIM  shall  return  all  manuals,  informational  materials,  instruction  booklets,  and  all  data  and  information  in  printed  form or  stored  in  floppies,  CD-ROMS, computer diskettes, or in  any other version or medium that was given by  OMNIA pursuant to this agreement,  

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immediately  on  termination  of  this  agreement.  Electronic  mail  messages  are  excluded.  PIM  shall  destroy  or  render  unusable  all  other  proprietary material and copies thereof, which  for any reason cannot be delivered to OMNIA.  In such event,  PIM shall  certify  in  writing to  OMNIA that all  proprietary material  has been  delivered to OMNIA or destroyed and that PIM  has discontinued use of the same.

e) Both the parties agree to fulfill all obligations  to each other under all the work orders in force  at  the time of  termination of  this  agreement  until the completion of the services specified in  the work orders.”          

3. It is common ground that the agreement in question  

was  terminated  by  the  parties  in  terms  of  another  

agreement dated 29th February, 2008 executed between the  

parties. This termination purported to be in conformity with  

the provisions of Clause 11 of the Original Agreement. The  

Petitioner-company’s  case  in  the  present  petition  under  

Section 11(6) and (9) of the Arbitration and Conciliation Act,  

1996 is that the respondent has committed a violation of the  

Original Agreement inasmuch as obligations cast upon the  

respondent under clause 13 of the agreement (supra) have  

not been discharged by the respondent thereby giving rise  

to disputes that are in terms of Clause 15 of the original  

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agreement  arbitrable.  The  petitioner-company  appears  to  

have  invoked  the  arbitration  clause  and  asked  for  

appointment  of  an  Arbitrator  but  since  the  respondent  

refused  to  do  the  needful,  the  petitioner  has  filed  the  

present  petition  and  prayed  for  the  appointment  of  an  

independent Arbitrator to adjudicate upon the said disputes.  

4. Respondent has appeared and filed a counter-affidavit  

in  which  it  was,  inter  alia,  asserted  that  there  is  no  

subsisting ‘arbitrable’ disputes to call for the appointment of  

an Arbitrator.  The respondent has in this regard relied upon  

Clause  4  of  the  termination  agreement  which  reads  as  

under:

“4. Subject  to  the  signing  of  this  termination  agreement by the parties, the parties hereby grant  each other full  and final  discharge from all  claims,  rights and obligations arising out of or relating to the  termination  of  the  Representative  Agreement.  The  parties acknowledge that thereafter no claims, rights  or  obligations  will  remain  existing  on  whatever  ground or whatever relation between the parties in  respect of the issue at hand.

This  termination  agreement  constitutes  the  entire  agreement and understanding between the parties.”

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5. When this petition came up for hearing before me on  

15th November, 2010, it was pointed out to learned counsel  

for the respondent that in case this Court was to pronounce  

upon the effect of Clause 4 of the termination agreement  

finally and further in case this Court were to hold that Clause  

4 did not prevent the petitioner from raising the disputes  

regarding  post-termination  obligations  of  the  parties,  the  

Arbitrator appointed by this Court shall have no option but  

to  fall  in  line  and  accept  that  determination  as  final  and  

binding on the parties. Learned counsel for the respondent  

was,  therefore,  asked  to  take  instructions  whether  

interpretation  of  Clause  4  which  was  by  itself  a  disputed  

matter and requires to be adjudicated upon, could be left to  

be determined by the Arbitrator.  Learned counsel  for the  

respondent has, in response filed a letter consenting to the  

appointment of  an Arbitrator for  adjudication of  all  issues  

including  the  existence  of  arbitrable  disputes  by  the  

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Arbitrator so appointed.  The relevant portion of  the letter  

filed on behalf of the respondent is as under:

“In this connection, learned Senior Advocate Mr. U.U.  Lalit  had mentioned the subject arbitration petition  on Friday February 4,  2011 before  Hon’ble  Justice  T.S. Thakur in Court No.8 and informed the Hon’ble  Court  that  the  Respondent  has  consented  to  the  appointment  of  the  arbitrator  by  the  Hon’ble  Supreme  Court  of  India  and  further  consented  to  raising  all  issues  including  the  existence  of  the  arbitral dispute before the appointed arbitrator.   

As  the  power  of  attorney  holder  of  the  respondent is not in the country, I, the Advocate on  Record  of  the  Respondent  after  having  taken  instructions  would  like  to  place  on  record  through  this letter that

a) The  Respondent  has  consented  to  the  appointment of arbitrator

b) the Respondent has consented to raising  all  the issues including the existence of  the  arbitral  dispute  before  the  said  arbitrator.”    

6. In  the  light  of  the  above  I  see  no  reason  why  the  

present petition cannot be allowed and all disputes including  

the dispute regarding interpretation and effect of Clause 4 of  

the  termination  agreement  referred  for  adjudication  by  

arbitration.

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7. I accordingly allow this petition and refer all  disputes  

between the parties relating to and arising out of agreement  

dated 14th January, 2008 and termination agreement dated  

29th February, 2008 including Clause 4 thereof to the sole  

Arbitration Mr. Justice Anil Dev Singh, former Chief Justice of  

Rajasthan High  Court.  The  parties  are  directed  to  appear  

before  the  nominated  Arbitrator  on  2nd April,  2011.   The  

Arbitrator shall be free to fix his fee and charges and the  

ratio in which the same shall be paid by the parties. Registry  

shall forthwith forward a copy of this order along with a copy  

of the petition to the worthy Arbitrator for information and  

necessary action.    

……………………………J. (T.S. THAKUR)

New Delhi March 3, 2011

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