- 1 - NC: 2025:KHC:14873 CMP No. 565 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 7TH DAY OF APRIL, 2025 BEFORE THE HON'BLE MR JUSTICE ASHOK S.KINAGI CIVIL MISC. PETITION NO. 565 OF 2024 BETWEEN: KARNATAKA SOAPS AND DETERGENTS LTD., CIN U85110KA1980SGC003871 HAVING ITS REGISTERED OFFICE AT NO. 27, INDUSTRIAL SUBRUB, BENGALURU-PUNE HIGHWAY, RAJAJINAGAR, BENGALURU-560 055, REPRESENTED BY ITS MANAGING DIRECTOR. …PETITIONER (BY SMT. MANJULA D., ADVOCATE) AND: ORIENTAL ENTERPRISE PRIVATE LIMITED CIN U73100GJ1978PTC003085, HAVING ITS CORPORATE OFFICE AT NO. 110, GANGA HOUSE, 2ND FLOOR, LBS MARG VIKHROLI, (WEST) MUMBAI-400 083, REPRESENTED BY ITS MANAGING DIRECTOR, SRI. N. M. JOSHI. …RESPONDENT (BY SRI. R KUMAR., ADVOCATE) THIS CIVIL MISCELLANEOUS PETITION IS FILED UNDER SEC.11(6) OF THE ARBITRATION AND CONCILIATION ACT 1996 PRAYING TO a. APPOINT A SOLE ARBITRATOR TO ADJUDICATE UPON DISPUTE AND DIFFERENCES THAT HAVE Digitally signed by SUNITHA K S Location: HIGH COURT OF KARNATAKA - 2 - NC: 2025:KHC:14873 CMP No. 565 of 2024 ARISEN BETWEEN THE PETITIONER AND THE RESPONDENT OUT OF OR IN CONNECTION WITH THE WORK ORDER BEARING NO. KSDL-AGM(M) 18-19-571 DATED 08.02.2019 EXECUTED BETWEEN BOTH THE AFORESAID PARTIES WHICH IS PRODUCED AS ANNEXURE C. b. TO IMPOSE ORDER OF COST OR INCIDENT TO THIS PETITION BEBORNEBY THE RESPONDENT. THIS PETITION, COMING ON FOR ADMISSION, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE ASHOK S.KINAGI ORAL ORDER This Civil Miscellaneous Petition is filed under section 11(6) of the Arbitration and Conciliation Act, 1996 for the appointment of an arbitrator to adjudicate upon the disputes and differences between the petitioner and the respondent as per clause 33 of the tender notification dated 30.07.2018 vide Annexure- A and in connection with the work order dated 08.02.2019 vide Annexure-C executed between the parties to the petition. - 3 - NC: 2025:KHC:14873 CMP No. 565 of 2024 2. The brief facts leading rise to the filing of this petition are as follows: The petitioner issued a tender dated 30.07.2018 to procure a ‘Guerze Pleat Wrapping Machine’ Model No.PL 150 to wrap/package 120 soaps per minute to replace the existing ‘Hand operated’ pleat wrapping machines, which require significantly more manpower for their operation, and increase the manufacture of soaps as per the increased demand. The amount put to tender was at Rs.3,97,66,000/-. The respondent was the successful bidder, and accordingly, a work order was issued on 08.02.2019 in favour of the respondent with a stipulation that the petitioner should deliver the machine within 9 months, i.e., by November 2019. 2.1. Based on the work order, a Memorandum of Understanding came to be signed between the petitioner and the respondent. The petitioner received the machine after the considerable delay. The respondent failed their duty as per the terms and conditions of the contract as the - 4 - NC: 2025:KHC:14873 CMP No. 565 of 2024 said machine did not perform satisfactorily and did not produce the desired result of wrapping 120 soaps per minute, as mentioned in the tender specification. 2.2. The respondent took back one head out of the two ‘heads’ of the machine for redesigning to rectify the defects in the machines wrapping output to confirm the tender specifications. 2.3. The petitioner got issued a legal notice on 09.11.2022, inter alia, calling upon the respondent to set right the machine within 15 days. The respondent replied to the legal notice on 23.11.2022. The petitioner issued another letter dated 07.09.2023, informing the respondent that legal action would be initiated against the respondent, i.e., OEPL for recovery of 25% advance payment (Rs.99,41,500/-) along with the interest. The respondent wrote a reply seeking a further extension of 20 days time to deliver the redesigned/modified ‘Guerze Pleat Wrapping Machine’. - 5 - NC: 2025:KHC:14873 CMP No. 565 of 2024 2.4. The petitioner constituted a committee to conduct a performance test in the respondent’s presence, on the machine. In the meeting, a representative of the respondent - OEPL admitted that one ‘head’ of the wrapping machine which was supplied could wrap only about 25 to 30 soaps per minute and the two heads, when put together, could wrap about 50 soaps per minute. Hence, the petitioner was constrained to invoke the Arbitration clause by issuing arbitration notice under Section 21 of the Arbitration and Conciliation Act, 1996, in terms of clause 33 of the tender notification dated 30.07.2018. The respondent replied to the arbitration notice dated 13.08.2024. The petitioner sent a rejoinder to the reply. Thus, the petitioner is constrained to file this petition. 3. The respondent filed a statement of objections contending that the civil miscellaneous petition is not maintainable either in law or on facts and liable to be - 6 - NC: 2025:KHC:14873 CMP No. 565 of 2024 dismissed and raised several grounds in the statement of objections and prays to dismiss the petition. 4. Heard the arguments of the learned counsel for the petitioner and learned counsel for the respondent. 5. Learned counsel for the petitioner submits that the respondent was a successful bidder and agreed to supply, a ‘Guerze Pleat Wrapping Machine’ Model No.PL 150, and a work order dated 08.02.2019 was issued to the respondent. It was agreed that the respondent shall deliver the wrapping machine within 9 months, i.e., by November 2019. The machine supplied by the respondent was defective. The petitioner requested the respondent to rectify the defects, despite the said request, the respondent did not rectify the defects. The petitioner issued a legal notice on 09.11.2022 calling upon the respondent to set right the machines within 15 days. The respondent replied to the legal notice but did not rectify the defects in the machine. The petitioner invoked the arbitration clause No.33 of the tender notification dated - 7 - NC: 2025:KHC:14873 CMP No. 565 of 2024 30.07.2018, by issuing notice dated 13.08.2024, under Section 21 of the Arbitration and Conciliation Act and proposing the name of learned Mr. Vishwanath V Angadi, retired District and Sessions Judge to act as an Arbitrator. The respondent replied to the said arbitration notice on untenable grounds. 6. The petitioner filed a rejoinder to the reply notice dated 23.09.2024. He submits that there is an arbitration clause in the tender notification. The dispute has arisen between the petitioner and the respondent, and the same has to be resolved by the Arbitrator. Hence, on these grounds, he prays to allow the petition. 7. Learned counsel for the respondent submits no objection to allow the petition. Hence, on these grounds, he prays to dismiss the petition. 8. Perused the records and considered the submissions of the learned counsel for the parties. - 8 - NC: 2025:KHC:14873 CMP No. 565 of 2024 9. The point that arises for consideration is as follows: “Whether the petitioner has made out grounds to refer the dispute to the Arbitrator as per clause 33 of the tender notification dated 30.07.2018?” 10. There is no dispute that the petitioner has issued a tender to procure wrapping machine Model No.PL150 to wrap/package 120 soaps per minute to replace the existing ‘Hand operated’ pleat wrapping machines, cost of Rs.3,97,66,000/- . The respondent was the successful bidder, and the petitioner issued a work order in favour of the respondent, and it was agreed that the respondent should deliver the machine within 9 months. The Memorandum of Understanding came to be executed between the petitioner and respondent on 28.11.2018. The respondent supplied the machines, but the machines supplied by the respondent were defective. The petitioner issued a legal notice calling upon the respondent to set right the defects in the machine within - 9 - NC: 2025:KHC:14873 CMP No. 565 of 2024 15 days. The respondent did not rectify the defects in the machines. Thus, the petitioner invoked the Arbitration clause. 11. I have perused the tender notification, which provides an Arbitration clause. Clause 33: Arbitration: If any dispute arises out of the given purchase order, the case will be referred to arbitration by an arbitrator to be named by the KS &DL, Managing Director who shall conduct the arbitration in accordance with the Indian Arbitration Act and the rules there under. 12. Admittedly, the petition is filed by the Managing Director of Karnataka Soaps and Detergents Ltd. Admittedly, there is an arbitration clause on the tender notification dated 30.07.2018 in connection with the work order dated 08.02.2019. Though the respondent has denied that there is no arbitration clause, from the perusal of the tender notification, clause No.33 provides an arbitration clause. While considering the petition under - 10 - NC: 2025:KHC:14873 CMP No. 565 of 2024 Section 11(6) of the Act, 1996, this Court is required to consider whether there exists an arbitration clause. If there exists an arbitration clause, the Court has no other option except to appoint an Arbitrator. The scope of Section 11(6) of the Act, 1996 is very limited. This Court cannot enter into the merits of the case. The respondent can raise all the contentions before the Arbitrator. The petitioner has made a ground to refer the dispute to the Arbitrator to resolve the dispute between the parties to the petition. In view of the above discussion, I answer the point for consideration in the affirmative. 13. Accordingly, I proceed to pass the following: ORDER i. The Civil Miscellaneous Petition is allowed. ii. Shri. Basavaraj S. Tadahal, retired District Judge is nominated as an Arbitrator to resolve the dispute between the parties to the petition as per the provisions of the Act, 1996 and rules. - 11 - NC: 2025:KHC:14873 CMP No. 565 of 2024 iii. The office is directed to forward a copy of this order to the learned Arbitrator and the Arbitration and Conciliation center in Bengaluru. Sd/- (ASHOK S.KINAGI) JUDGE sks