Bombay High Court: In a petition filed for dealing with a primary issue for consideration that whether a clause contemplating reference of disputes and differences arising out of, or in relation to a contract or order of advertisement, bill or otherwise breach thereof, to be referred to Sole Arbitrator, printed at the back of the tax invoice would amount to an arbitration clause, Bharati Dangre, J., held that the parties have acted upon the invoices and there was no denial of the invoices raised by the applicant, the clause contained in the invoices which clearly stipulate a reference to arbitration, deserve to be construed as an arbitration clause.
The applicant, a News Media Company indulging into various activities like news publishing, T.V, internet, radio and outdoor domain, had an interface with the respondent, an advertising agency, to be approached by various advertisers to place advertisements in the applicant’s newspapers, channels, radio and other outdoor publications via release orders.
Both parties entered into an agreement that on release orders received from the respondent, the applicant would publish the requisite advertisement in distinct media platforms, physical and virtual and subsequently raise an invoice upon the respondent for payment towards issuance of such advertisement. The respondent, however, defaulted in making the payments in a timely manner despite the invoices being raised. Aggrieved by this, the applicant invoked the arbitration seeking appointment of the sole arbitrator as contemplated in the Dispute Resolution Clause, which is a part of the tax invoice.
Thus, the issue before the Court arises from the fact that such a clause in the tax invoice will be construed as a tax invoice or not.
Reliance was placed on a decision of the present Court rendered by G S Kulkarni, J., in Concrete Additives and Chemicals v. S.N. Engineering Services Pvt. Ltd., Arbitration Application (L) No. 23207 of 2021, wherein the Court dealt with a clause where the dispute had arisen under the unpaid invoices which have been received, acknowledged, and acted upon by the respondent, which contained the terms of supply and a process for being referred to arbitration, thus, the Court crystallized the law that to the effect that any document in writing exchanged between the parties which provide a record of the agreement and in respect of which there is no denial by the other side, would squarely fall within the ambit of Section 7 of Arbitration and Conciliation Act, 1996 and would amount to an arbitration clause.
The Court held that it can be clearly seen that the parties have acted upon the invoices and there was no denial of the invoices raised by the applicant, the clause contained in the invoices which clearly stipulate a reference to arbitration, deserve to be construed as an arbitration clause.
The Court appointed Justice Akil Kureshi (Retd. Chief Justice) as the sole arbitrator to decide the disputes and differences between the parties under the documents referred to above.
[Bennett Coleman & Co. Limited v. MAD (India) Pvt. Ltd., 2022 SCC OnLine Bom 7807, decided on 22-12-2022]
Advocates who appeared in this case :
Mr. Ashish Kamat with Mr. Pradeep Mane, Ms. Huzan Bhumgara and Mr. Dhruv Dandekar i/b Desai & Diwanji for the applicant/petitioner;
Mr. Girish Kedia with Mr. Kushang Kedia for the Respondent.
*Arunima Bose, Editorial Assistant has reported this brief.