18.11.

2023
Ref No.: IER873409
By registered post, fax and hand delivery
To,
Rajeev Khandelwal
Dear Sir,
Sub: NOTICE INVOKING ARBITRATION UNDER CLAUSE 13 OF THE
AGREEMENT TO SUPPLY LEATHER
Upon instructions and on behalf of our client, FootLux Creations Pvt. Ltd.
(hereinafter referred as “Our Client”), a company incorporated under the provisions
of the Companies Act, 1956 and having its registered office at Malviya Nagar, Delhi,
we hereby serve you with the present notice, the contents of which are as under: -
1. Our Client is a leading manufacturer of high-quality footwear, specializing in
athletic shoes, formal footwear, and casual footwear, catering to a wide range of
consumers.
2. At the outset, Our Client states that,
FootLux Creations Pvt. Ltd., a leading manufacturer of high-quality footwear,
entered into a supply agreement with Khandelwal and Sons Leather Manufacturing
Company (hereinafter referred to as "Khandelwal and Sons") for the procurement of
leather.
Khandelwal and Sons agreed to supply a 500 kg of leather as per the agreed-upon
terms. FootLux Creations Pvt. Ltd. fulfilled its obligations by making timely
payments for the initial deliveries. However, issues arose when Khandelwal and
Sons failed to fulfill subsequent orders, and outstanding dues began accumulating.
They denied return of INR 2crores for which they could not supply the leather
material, inspite of FootLux Creations Pvt. Ltd constant reminders.
3. Along with the above, Point no 13 of the agreement stated that “It is hereby
expressly provided and agreed by the parties here to that both parties that All
disputes, claims and questions whatsoever which may arise between the Parties
hereto with respect to this Agreement or relating to or arising out of this Agreement,
or as to any act or omission of any act or as to any other matter in any way relating to
this Agreement or the rights, duties and liabilities of the parties under this
Agreement shall be referred to the arbitration of a Sole Arbitrator to be nominated
and appointed jointly by the parties. The arbitration proceedings shall be governed
by the arbitration and Conciliation Act, 1996 or any statutory modifications or
amendments or re-enactments thereof for the time being in force and rules made
there under. The venue of Arbitration shall be Delhi and the arbitration proceedings
shall be conducted in English. The costs of Arbitration will be borne and paid by the
parties equally.
That Any decision or award resulting from arbitrations shall be final and binding
upon the parties the parties hereto hereby waive to the extent permitted by law any
rights to appeal or to review of such award by any court of tribunal their parties
hereto agree that the arbitral award may be enforced against the parties to the
arbitrations proceedings of their assets wherever they may be found and that a
judgement upon the arbitral award may be entered in any court having jurisdiction
thereof.
That pending the submission of and or decision on a dispute or until the arbitral
award is published the parties shall continue to perform all of their obligations under
this agreement without prejudice to a final adjustment in accordance with such
award”.
4. In view of the above continuous denial by the [other side] in clearing the
outstanding recoverable Claim amounts due and payable to Our Client, Our Client
issued a Demand Notice dated [1.12.2022], inter alia reiterating the facts mentioned
hereinabove and providing details of the Claims and seeking release of the total
outstanding recoverable dues of all the Claims together of [INR 2 Crores] (“Total
Outstanding Amount”) due from the [other side] under the [Agreement/Contract] to
be payable within a period of [period of time allowed under the demand notice] days
(“Demand Notice”).
5. However, admittedly you have failed to respond to the said Demand Notice within
the prescribed period of [15] days.
6. The Total Outstanding Amount payable by the [other side] to Our Client under the
[Agreement/Contract] as on date is as under: -
(i) Total Outstanding Amount of the Claims is Rs. [INR 2 Crores], details of which
are more specifically mentioned hereinabove.
(ii) Interest at the rate of [5] % per annum on Total Outstanding Amount from the
date of this notice upto the initiation of the arbitration proceedings.
(iii) an amount of Rs. [Approx INR 3.5 crores] towards damages suffered by Our
Client on account of denial in returning the amount paid by our client.
7. The aforesaid acts and events therefore make it abundantly clear that the [other
side] are unwilling to comply with their obligations under the [Agreement/Contract]
to indemnify Our Client against all damages incurred or suffered by Our Client based
upon, resulting from or relating to any breach of warranty, undertaking or any
obligation of the [other side] as well as with respect to any amount of tax liability
incurred by, imposed upon, due from or payable by [other side], in relation to the
period up to and including the Closing Date of the [Agreement/Contract], as set out
hereinabove and under various communications issued in this regard. Thus, Our
Client states that disputes have arisen between the parties and further repeated
attempts to amicably settle the disputes regarding the non-payment of amounts due
to them have been made. Therefore, bearing in mind the situation as set out
hereinabove, Our Client is left with no other alternative but to invoke arbitration in
accordance with Clause [13] of the [Agreement]. The said arbitration clause is
reproduced below for your ready reference:
8. In terms of Clause [13] of the [Agreement] (reproduced above) we on behalf of Our
Client nominate [•] Rahul Dhawan as the arbitrator on behalf of Our Client. You are
therefore requested to nominate the arbitrator on your behalf and inform us of the
same within a period of 30 (thirty) days from the date of receipt of the present notice,
failing which Our Client shall be constrained to file appropriate proceedings in this
regard, which please note.

Yours sincerely,
[Adv. Archana Pradhan]
[Lal Gupta]