RAMJI DAYAWALA AND SONS (P) LTD.

Vs INVEST IMPORT

IN THE HONBLE SUPREME COURT OF INDIA

In the matter of RAMJI DAYAWALA AND SONS (P) LTD. (APPELLANT) V INVEST IMPORT (RESPONDENT)

On submission to the Honble Supreme Court

MEMORANDUM FOR THE RESPONDENT

COUNSEL FOR THE RESPONDENT ROHIT MOHAN ROLL NO. 116 SEMESTER: II

HIDAYATULLAH NATIONAL LAW UNIVERSITY, RAIPUR

Memorandum on behalf of the Respondent

RAMJI DAYAWALA AND SONS (P) LTD. Vs INVEST IMPORT

TABLE OF CONTENTS

LIST OF ABBRIEVIATIONS.. INDEX OF AUTHORITIES. STATEMENT OF JURISDICTION STATEMENT OF FACTS ISSUES RAISED.... SUMMARY OF ARGUMENTS... ARGUMENTS ADVANCED PRAYER FOR RELIEF

Memorandum on behalf of the Respondent

RAMJI DAYAWALA AND SONS (P) LTD. Vs INVEST IMPORT

LIST OF ABBREVIATIONS

Memorandum on behalf of the Respondent

RAMJI DAYAWALA AND SONS (P) LTD. Vs INVEST IMPORT

STATEMENT OF FACTS
The respondent, a Yugoslavia based company, entered into a sub-contract with the plaintiffappellant, a private limited company, for supply of labour to the respondent in order to carry out the respondents main contract with the Bihar State Electricity Board for setting up a thermal power station at Barauni. The subcontract, which was signed by the parties in Belgrade (Yugoslavia) incorporated an arbitration clause providing: Any mutual disputes should be settled in mutual agreement, however, should they fail to reach an agreement in the way, both contracting parties accept the jurisdiction of the Arbitration by the International Chamber of Commerce in Paris with application of Yugoslav materials and economical law. Just after signing the subcontract, the MD of the appellant-company, who was in then Belgrade, handed over on the very date a letter to the respondent in Belgrade stating that that he had objected to the arbitration clause which was deleted from the appellants revised draft of agreement sent to the respondent in advance and that the arbitration clause would be acceptable to the appellant only if the arbitration was to be done in India according to the rules, regulations and procedures of this country. The letter was followed by a cable reiterating and repeating the objection to the arbitration clause which the MD sent to the respondent immediately on returning to India. The respondent did not respond to the letter and the cable. In carrying out the work undertaken under the sub-contract, the appellant claimed that it carried out some extra work for which it was entitled to recover extra amounts from the respondent. Subsequently, dispute arose between the parties regarding payment of a sum of Rs. 4, 25,243 which was claimed by the appellant to be due from the respondent in connection with the work done by the former in compliance with the subcontract. When the payment was not made by the respondent, the appellant filed a suit in the original side of the High Court. The manager of the respondent, posted at its Calcutta office, moved an application purporting to be under Section 151 of the CPC praying, inter alia, that the suit may be stayed in view of the arbitration clause and that if the provisions of Arbitration Act did not apply, the court may in exercise of its inherent jurisdiction injunct the plaintiffappellant from proceeding with the suit. The Single Judge of the High Court allowed the respondents petition and stayed further proceedings in the suit filed by the appellant. The Division Bench dismissed the appeal filed by the appellant but granted a certificate under Section 133(1) (c) of the Constitution.
Memorandum on behalf of the Respondent

RAMJI DAYAWALA AND SONS (P) LTD. Vs INVEST IMPORT

ISSUES RAISED

Whether the arbitration clause has been mutually agreed by both the parties?

Memorandum on behalf of the Respondent

RAMJI DAYAWALA AND SONS (P) LTD. Vs INVEST IMPORT

SUMMARY OF ARGUMENTS
The agreement between the two parties was mutual as the appellant remained silent and did not reply to the letter sent by the respondent with regard to the arbitration clause.

The respondent sent the arbitration agreement soon after the agreement was signed to the appellant in order to get a response regarding the modification or deletion of the arbitration clause. The appellant did not reply to this letter which clearly signifies the appellants agreement to the arbitration clause.

Memorandum on behalf of the Respondent

RAMJI DAYAWALA AND SONS (P) LTD. Vs INVEST IMPORT

ARUGMENTS ADVANCED

CONTENTION I
There was mutual agreement between the parties in relation to the arbitration clause. Acceptance of a suggestion may be sub silentio reinforced by the subsequent conduct. The general rule is that an offer is not accepted by mere silence on the part of the offeree. There may, however, be further facts which taken together with the offerees silence constitute an acceptance. One such case is where the part of the offer was disputed at the negotiation stage and the original offeree communicated that fact to the offerer showing that he understood the offer in a particular sense. This communication will probably amount to a counter offer in which case it may be that mere silence of the original offerer will constitute his acceptance. The respondent sent the arbitration agreement soon after the agreement was signed to the appellant in order to get a response regarding the modification or deletion of the arbitration clause. The appellant did not reply to this letter which clearly signifies the appellants agreement to the arbitration clause. The mere fact that continuation of the performance of obligations by the appellant expresses the consent to the arbitration clause. In Carrier Air conditioning and Refrigeration Vs M/s Linc Digital Items and Ors1., The
applicant appointed the first respondent as an authorized sales and service dealer of the products of the appellant company vide Dealership Agreement dated 10.1.1998. The agreement was for a period of one year and any further renewal was to be as per mutual agreement. The agreement was terminated by the applicant vide notice dated 23.10.2003. The agreement contains an arbitration clause. The applicant served a notice on the respondents dated 11.10.2006 enumerating therein the disputes, which had arisen between the parties. As there was no named arbitrator, the applicant proposed the names of three persons giving the option to the respondent to appoint anyone of them as the arbitrator. By reply dated 8.11.2006, the respondents denied the liability as well as the subsistence of the arbitration agreement and declined to appoint the arbitrator. Hence the applicant has approached this court under Section 11(6) of the Arbitration and Conciliation Act, 1996 (hereinafter, for brevity's sake, referred to as the Act). The conduct of the parties, as evidenced in the said correspondence and, in particular the appellant's silence on the respondent's letters dated 5.11.1998 and 4.1.1999, coupled with the fact that they continued to use the vessel, manifestly goes to show that except for the charter rate, there was no other dispute between the parties. They accepted the stand of the respondent sub silentio and thus, continued to bind themselves by other terms and conditions contained in
1

KE 968,2012

Memorandum on behalf of the Respondent

RAMJI DAYAWALA AND SONS (P) LTD. Vs INVEST IMPORT

the charter party dated 6.5.1997, which obviously included the arbitration clause." Under the circumstances, the argument raised by the respondents that the renewal can be only by written agreement has to be rejected.

Memorandum on behalf of the Respondent

RAMJI DAYAWALA AND SONS (P) LTD. Vs INVEST IMPORT

PRAYER FOR RELIEF

Wherefore, in light of the facts stated, arguments advanced and authorities cited, the Respondents, humbly prays before the Honble Supreme Court Of India , that: 1. To dismiss the appeals put forward by Ramji Dayawala and Sons (P) Ltd. 2. To adjudge the case in favour of Invest Import. The Court may also be pleased to pass any other order, which the Court may deem fit in light of justice, equity and good conscience.

All of which is most humbly prayed.

06th MARCH, 2013 NEW DELHI

COUNSEL ON BEHALF OF RESPONDENT ROHIT MOHAN

Memorandum on behalf of the Respondent