Purchase order and invoice between plaintiff and defendant did not contain arbitration clause. The arbitration clause between the defendant and other companies is not applicable. Section 8 of the AA cannot be invoked.
A.No.5041 of 2022 in C.S. (Comm Div) No.70 of 2022
Order dated 29.9.2023 of the High Court of Madras.
The plaintiff filed the suit for $19,005,310.00 against the defendant in respect of supply of Air Conditioners in March 2019.
The defendant filed section 8 application for dismissal of the suit and to refer the dispute for arbitration on the ground that the plaintiff and others are associate / subsidiary of parent company FGL, Japan. The group companies are engaged in manufacture and sale of air conditioners, etc.
The FGL and FGS had entered into Master Technical Licence and Distribution Agreement dated 22.12.1999 with the defendant for business in India. These agreements contained arbitration clause.
HELD
Transaction between the plaintiff and the defendant is totally independent of the agreements between the defendant, FGL, FGI and FGA. The plaintiff was not party to the said agreements.
The agreements do not refer to the purchase and sale between the plaintiff and the defendant.
Moreover, the purchaser orders and the invoices between the plaintiff & the defendant do not refer to the agreements between the defendants and other parties.
The purchase orders and invoices between the plaintiff and the defendant do not contain arbitration clause.
Therefore, the agreement between the plaintiff and the defendant was simplicitor one for purchase and sale.
The concept of group companies is not applicable since the transactions under the agreements and the purchase orders are independent and distinct contracts.
The application was dismissed.
