Agreement of 2015 for two years – Arbitration invoked in 2022 for claims 2019 to 2021.
By the distributor agreement dated 9.6.2015, the respondent was given exclusive rights to distribute products of the applicant for a period of two years. By the notice dated 17.11.2021, the applicant demanded outstanding amount of Rs.12.09 crores that “pursuant to the expiry of the Distributor Agreement” the distributorship has continued as mutually agreed on the terms and conditions of the Agreement. By the notice dated 11.7.2022, arbitration clause 18.1. of the Agreement due to disputes between the parties. On 14.3.2023, the Arbitral Tribunal was appointed.
The distributor, by the reply dated 2.9.2022, informed that the said business continued the same terms even after expiry of the said agreement. The distributor did not assert that there was no valid agreement in force.
On 14.7.2023, the respondent filed section 16 application that there was neither any written contract nor any subsisting arbitration agreement between the parties.
The Arbitral Tribunal held that even if there was extension of agreement (either in writing or by conduct) unless the arbitration clause is explicitly reiterated in writing, it would stand extended.
In that context, it was HELD that if parties to an agreement are held to have extended a contract, all the terms of that agreement would stand extended susb silentio and by necessary implication. The exchange between notices and reply show that the agreement stood extended and is a strong pointer to the intention of the parties and consensus ad idem between the parties.
The doctrine of ante litem motam and post litem motam are invoked to evaluate the reliability of the statements of the parties on the question of extension of agreement on the same terms and conditions including arbitration agreement.
Ante litem motam is the legal principle showing that the statements made before any legal dispute are considered from biases and distortions occur once litigation is anticipated. The statements are presumed to be more reliable because they were made without the influence of pending litigation.
Post litem motam is the legal principle that the statements made after litigation are viewed with caution or biased.
Judgment dated 21.2.2025 of the High Court of Bombay in Arbitration Petition (L) NO.232 of 2024 of Raymond Limited Vs. M/s. Miltex Aparels with connected matters
