AMWAY INDIA ENTERPRISES PVT. LTD. versus RAVINDRANATH RAO SINDHIA & ANR.

Citation: [2021] 3 S.C.R. 50 · Decided: 04-03-2021 · Supreme Court of India · Bench: R.F. NARIMAN · Disposal: Appeal(s) allowed
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Judgment (excerpt)

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SUPREME COURT REPORTS
[2021] 3 S.C.R.
   [2021] 3 S.C.R. 50
50
AMWAY INDIA ENTERPRISES PVT. LTD.
v.
RAVINDRANATH RAO SINDHIA & ANR.
(Civil Appeal No. 810 of 2021)
MARCH 04, 2021
[R. F. NARIMAN AND B. R. GAVAI, JJ.]
Arbitration and Conciliation Act, 1996 – s.11(6) – Appointment
of a sole arbitrator – The respondents were appointed as the
distributors for the appellant – Contract for distributorship was
executed between the parties – Dispute arose between the parties –
Respondents filed petition u/s. 11(6) of the 1996 Act before the High
Court - The High Court appointed a sole arbitrator – Before the
Supreme Court, it was contended that respondents are husband and
wife who are both nationals of and habitually resident in United
States of America – It was further contended that once it is found
that a party to an agreement is an individual who is a national of,
or habitually resident in, any country other than India, then the
case is governed by s.2(1)(f)(i) and the High Court has no
jurisdiction – Held: The respondents had become distributors of
the appellant in India as a sole proprietorship concern under the
relevant forms issued by the appellant – An analysis of s.2(1)(f)
would show that whatever be the transaction between the parties, if
it happens to be entered into between persons, at least one of whom
is either a foreign national, or habitually resident in, any country
other than India; or by the Government of a foreign country, the
arbitration becomes an international commercial arbitration
notwithstanding the fact that the individual, body corporate, or
government of a foreign country referred to in s.2(1)(f) carry on
business in India through a business office in India – Therefore,
the High Court had no jurisdiction to appoint an arbitrator – Now,
the respondents would have to follow the drill of s.11(6) r/w. s.11(9)
of the Act.
Allowing the appeal, the Court
HELD: 1. A reading of the application form as filled in,
together with the Code of Ethics, would show that a distributorship
may be taken up either in individual capacity, a sole proprietorship
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concern, partnership firm, or company. When it comes to a
husband and wife’s distributorship, they are entitled not to two,
but to a single distributorship, it being made clear under clause
3.17 of the Code of Ethics that they are to operate only as a single
entity. The form that was filled in made it clear that the
respondents applied to become a distributor as a sole
proprietorship, it being made clear that the husband was the sole
proprietor/ “primary applicant”, the wife being a “co-applicant”.
[Para 11][62-D-E]
2. The respondents have themselves applied to become
distributors of Amway products in India as a sole proprietorship
concern under the relevant forms issued by the appellant, read
with the Code of Ethics. [Para 15][65-E-F]
3. The argument that there is no international flavour to
the transaction between the parties has no legs to stand on.
Indeed, an analysis of Section 2(1)(f) would show that whatever
be the transaction between the parties, if it happens to be entered
into between persons, at least one of whom is either a foreign
national, or habitually resident in, any country other than India;
or by a body corporate which is incorporated in any country other
than India; or by the Government of a foreign country, the
arbitration becomes an international commercial arbitration
notwithstanding the fact that the individual, body corporate, or
government of a foreign country referred to in Section 2(1)(f)
carry on business in India through a business office in India. This
being the case, it is clear that the Delhi High Court had no
jurisdiction to appoint an arbitrator in the facts of this case.
[Para 16][66-F-H]
Ashok Transport Agency v. Awadhesh Kumar, (1998) 5
SCC 567 – relied on.
Larsen & Toubro Ltd. – SCOMI Engineering Bhd v.
MMRDA, (2019) 2 SCC 271 : [2018] 14 SCR 22 –
distinguished.
TDM Infrastructure (P) Ltd. v. UE Development India
(P) Ltd., (2008) 14 SCC 271 : [2008] 8 SCR 775 –
referred to.
AMWAY INDIA ENTERPRISES PVT. LTD. v. RAVINDRANATH
RAO SINDHIA & ANR.
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SUPREME COURT REPORTS
[2021] 3 S.C.R.
Case Law Reference
[2008] 8 SCR 775
referred to
para 3
[2018] 14 SCR 22
distinguished
paras 3, 13
(1998) 5 SCC 567
relied on
para 15
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 810 of
2021.
From the Judgment and Order dated 03.12.2020 of the High Court
of Delhi at New Delhi in ARB.P. 448 of
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