Deyasini Das 6 Jul 2021


Civil Appeal No. 810 OF 2021 (ARISING OUT OF SLP(CIVIL) NO.15982 OF

Decided on March 4th, 2021


In the present case the Supreme Court had to set aside the judgement after allowing the appeal. Amway India, the  Appellant  were the distributor for the respondent for marketing, distribution and sale of its product in the country. In the name of Sindhia Enterprises’ with ABO No. 141935,-The sole proprietorship was registered with Amway India as Amway Direct Seller (ADS) or Amway Business Owner (ABO). As stated by the petitioner, their contribution in setting up large number of sponsorship for the respondent company lead to the joining of almost 1500 Ads. These ADs are now in the Silver or Gold or Platinum or Sapphire or  Emerald categories with their huge networks. 

A Code of Ethics and Rules of Conduct in 2015 was formulated by the respondent to govern the harmonious relationship of the Ads and his own. In April, 2019 as the petitioner logged into the respondents website, the access was allowed only as a PC but not as an ABO account holder and view of their LoS was denied. It was informed to them by the respondent’s Major Accounts Manager that since the criteria of sale were not fulfilled in 12 months period, the account got reclassified as PC.  However, according to the petitioner, neither the requirement was conveyed nor any termination notice was issued to him. This criterion was regarded violatthe provided guidelines of Direct Selling, 2016. The petitioners had requested repeatedly the respondent company to restore the account, mutual rounds of discussion were held to solve the issue till December 2019. But, Amway India failed to perform the request of restoration of the Ads account.  

The plea on behalf of Amway India, in the Delhi High Courtstated that the petition filed I the court was not maintainable since the dispute falls within the ambit of Section 2(1)(f)(i) of the Arbitration Act, international commercial arbitration,as the respondent couple were also residents and nationals of the United States of America

The bench of the Hon’ble Court held that, an analysis of Section 2(1)(f) shows, “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 the government of a foreign country referred to in Section 2(1)(f) carry on business in India through a business office in India.” 

Thus, according to the facts of the case, Delhi High Court had no jurisdiction to appoint an arbitrator.


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