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M/S Suprema Inc v. 4G Identity Solutions Pvt. Ltd.

Arbitration Petition · Neutral citation not assigned (Arbitration Petition No. 8 of 2015)Decided 13 May 2015
Arbitration Petition No. 8 of 2015
Justice Ranjan Gogoi

Background

The petitioner, a South Korean biometrics company, had supplied fingerprint scanners worth about USD 3.2 million to the respondent, an Indian company, under a supply agreement linked to a larger contract with a government entity. When payment was not made, the petitioner first sought arbitration in Singapore under a separate Master Agreement, but the Singapore tribunal held it had no jurisdiction since the actual dispute arose under the Supply Agreement, which instead pointed to arbitration under India's Arbitration and Conciliation Act, 1996. The petitioner then approached the Supreme Court under Section 11(6) of that Act asking the Court to appoint an arbitrator; the respondent did not appear despite notice.

Decision Breakdown

The Supreme Court found that a genuine dispute over unpaid bills existed between the parties and that Clause D12 of the Supply Agreement specifically provided for disputes to be referred to arbitration under the Arbitration and Conciliation Act, 1996. Proceeding ex parte because the respondent did not appear despite being served, the Court held the petitioner was entitled to have an arbitrator appointed to resolve the payment dispute. It allowed the petition and appointed a former Supreme Court judge, Justice B. Sudershan Reddy, as the arbitrator, with the terms of his appointment to be settled with the parties.

Lesson Learnt

When a commercial contract's dispute-resolution clause points to arbitration under Indian law, a party can approach the Supreme Court directly to have an arbitrator appointed if the other side fails to cooperate or does not show up: the Court will decide that specific request even though the underlying payment dispute itself is left for the arbitrator to resolve.

Official source (sci.gov.in)View Judgment (PDF)

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