ARB.P./606/2022 of FUSIONNET WEB SERVICES PVT LTD Vs M/S YASH FIBER NETWORK & ANR.

$~1 & 2

*IN THE HIGH COURT OF DELHI AT NEW DELHI

+ARB.P. 606/2022, I.A. 14460/2022

FUSIONNET WEB SERVICES PVT LTD..... Petitioner

Through:Appearance not given

versus

M/S YASH FIBER NETWORK & ANR.

..... Respondents

Through:Mr. Tejvir Bhatia, Mr. Kunal Vats,Advs.

+ARB.P. 607/2022, I.A. 14461/2022

FUSIONNET WEB SERVICES PVT LTD..... Petitioner

Through:Appearance not given

versus

M/S OM FIBER NETWORK & ANR...... Respondents

Through:

CORAM:HON'BLE MR. JUSTICE JASMEET SINGH

O R R%19.03.2024

1.These are petitions seeking appointment of an arbitrator to adjudicatethe disputes between the petitioner and the respondents.

2.It is stated by the learned counsel for the respondents that he does notwish to file reply and his application being an application under Order VIIRule 11 be read as reply to the petition.

3.In the present case, the petitioner entered into franchise and

consultancy agreement with the respondent on 01.09.2018.

4.The obligations of the franchise i.e., the respondent are contained in

clause 4.1 to 4.4 and 4.11 which read as under:

“4.1Franchise will leverage its relationships to help organizeInternet Service in designated Service Area for provisioningInternet and related services during the term of this Agreement.

4.2Franchise shall be responsible for marketing, promotions,sales and distribution of the service to the ultimate subscribersand/or customers of Internet Services in Service Area.

4.3 Franchise shall help Service Provider to develop and marketthe Value Added Services along with Internet Services.

4.4 Franchise will provide full support in submission of details orinformation as required by Service Provider for Service Provider’suseorsubmissionofinformationtotheconcernedGovt.Departments including various ministries in time as per the LicenseAgreement entered into with Government of India, Ministry ofCommunication & IT, and Department of Communication (DOT)and also to Telecom Regulatory Authority of India (TRAI).

4.11 The Franchisee undertakes not to provide, transmit, repeat,facilitate or distribute the data and internet Services in any othermode other than the service provider’s plans.”

5.The arbitration clause is contained in clause 12 of the said agreementwhich reads as under:

“12. ARBITRATION & GOVERNING LAW

If any dispute arises between the Parties during the subsistence ofthis AGREEMENT or thereafter, in connection with the validity,interpretation, implementation or alleged breach of any provisionsof this AGREEMENT, the dispute shall be referred to SoleArbitrator, to be chosen solely by the Service Provider, forArbitration by the Parties under the Indian Arbitration andconciliation Act, 1996 or any of its statutory modifications,

amendments or enactments thereof, and the same shall govern thearbitration proceedings. The arbitration proceedings shall be inEnglish language and the venue of arbitration shall be Delhi. Theaward granted by the Arbitrator shall be binding on the Parties.”

6.Since there were disputes between the parties, the petitioner invokedarbitration vide legal notice dated 18.01.2022. Since the disputes werepending, the present petition has been filed.

7.Learned counsel for the respondent states that there is no arbitraldisputes between the parties. He states that in view of Section 14 of theTelecom Regulatory Authority of India (TRAI) Act, 1997 and Section 15 ofthe Act, it is the TDSAT which will be the authority to adjudicate thedisputes between the parties.

8.The learned counsel relies on the judgment of this Court in “Gaur

Distributors vs. Hathway Cable & Datacom Ltd.” [ARB.P. 129/2016].

9.I have heard learned counsel for the parties.

10.Section 14 and Section 14(A) of the TRAI Act reads as under:

“14. Establishment of Appellate Tribunal.- The Central Governmentshall, by notification, establish an Appellate Tribunal to be known as theTelecom Disputes Settlement and Appellate Tribunal to-

(a) Adjudicate any dispute—

(i)Between licensor and licensee;

(ii)Between two or more service providers;

(iii)Between service provider and group of consumers.

Section 14A: Application for settlement of disputes and appeals toAppellate Tribunal.- (1)The Central Government or State Governmentor local authority or any person may make an application to theAppellate Tribunal for adjudication of any dispute referred to in clause(a)of Section 14.

........”

11.A perusal of the above clearly shows that the TDSAT will have powerto adjudicate disputes between the licensor and licensee, two or more serviceproviders, service provider and group of consumers.

12.In the present case, perusal of the obligations of the franchise clearlyshows that the franchise/respondent is only engaged to market, promote, saleand distribute the services of the petitioner to the ultimate subscribers anddevelop the market for the petitioner.

13.In essence, the job of the respondent is to promote the servicesprovided by the petitioner and to ensure its smooth operations.

14.The argument of learned counsel for the respondent that therespondent is covered under “any other person” mentioned in section 14(A)is also misconceived as it only deals with applications which may be movedto the Appellate Tribunal and not as regards the disputes which havementioned in section 14(a)(i)(ii)(iii). The person mentioned in 14A(1) canonly refer the disputes contemplated u/s 14(a). Hence, the scope of Section14A(1) is restricted to disputes within the contours of Section 14(a).

15.The definition of licensee is as under:

“2(e) “licensee” means any person licensed under sub-section (1)of Section 4 of the Indian Telegraph Act, 1885 (13 of 1885) forproviding specified public telecommunication services;”

16.The definition of service provider is as under:

“2(j) “service provider” means the [Government as serviceprovider] and includes licensee;”

17.In my understanding, the respondent is neither licensor, licensee nora service provider. Admittedly, the respondent is not group of consumers.18.Thejudgmentrelieduponbytherespondent,namelyGaur

Distributors (supra) is also not applicable as in para 5 of the judgment, it has

clearly been mentioned as under:

“5. It is an undisputed fact that both the petitioner as well as therespondent are 'service providers' within the meaning of Section14(a)(ii) of the Telecom Regulatory Authority of India Act, 1997(hereinafter referred to as "TRAI Act") therefore, it is to beexamined as to whether the dispute is arbitrable or as per Section15 of the TRAI Act it is only to be determined under the TelecomDisputes Settlement and Appellate Tribunal (hereinafter referred toas "TDSAT") which has exclusive jurisdiction to entertain andadjudicate the present disputes.”respondent are 'service providers' within the meaning of Section14(a)(ii) of the Telecom Regulatory Authority of India Act, 1997(hereinafter referred to as "TRAI Act") therefore, it is to beexamined as to whether the dispute is arbitrable or as per Section15 of the TRAI Act it is only to be determined under the TelecomDisputes Settlement and Appellate Tribunal (hereinafter referred toas "TDSAT") which has exclusive jurisdiction to entertain andadjudicate the present disputes.”

The parties were both service providers in the above case.

19.In the present case, for the reasons stated, I am of the view that therespondent does not come within the definition of licensee or serviceprovider.

20.For the reasons stated, the petitions are allowed and disposed of withthe following directions:

i) Mr. Suryadeep Singh (Adv.) (Mob. No. [REDACTED]) is appointed as aSole Arbitrator to adjudicate the disputes between the parties.Sole Arbitrator to adjudicate the disputes between the parties.

ii)The arbitration will be held under the aegis of the Delhi InternationalArbitration Centre, Delhi High Court, Sher Shah Road, New Delhihereinafter, referred to as the ‘DIAC’). The remuneration of the learnedArbitrator shall be in terms of the Fourth Schedule of the Arbitration &Conciliation Act, 1996.Arbitration Centre, Delhi High Court, Sher Shah Road, New Delhihereinafter, referred to as the ‘DIAC’). The remuneration of the learnedArbitrator shall be in terms of the Fourth Schedule of the Arbitration &Conciliation Act, 1996.

iii) The learned Arbitrator is requested to furnish declaration in terms ofSection 12 of the Act prior to entering into the reference.Section 12 of the Act prior to entering into the reference.

iv) It is made clear that all the rights and contentions of the parties,including as to the arbitrability of any of the claim, any otherincluding as to the arbitrability of any of the claim, any other

preliminary objection, as well as claims on merits of the dispute ofeither of the parties, are left open for adjudication by the learnedarbitrator.

v) The parties shall approach the learned Arbitrator within two weeksfrom today.from today.

MARCH 19, 2024/DM

JASMEET SINGH, J

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