IMPORTANT POINT
In view of the existing disputes, arbitration clause and failure of arbitration procedure between the parties, the rights of the petitioner are not superseded by the settlement agreement.

ORDER

Ganguly, J. —

1. This petition has been filed under Section 11 of the Arbitration and Conciliation Act, 1996 (hereinafter, “the said Act”) by the Petitioner praying for appointment of an arbitrator to adjudicate the claims and disputes between the petitioner and the respondent as the parties have been unable to concur upon the arbitrator.

2. The first petitioner (hereinafter, P1) is Sirajuddin Kasim, an Indian, who is the Director, Promoter and shareholder of the second petitioner holding 75% of issued share capital of the second petitioner (hereinafter P2). P2 is a company incorporated under the laws of the Republic of Singapore and inter alia deals and trades in cotton, timber, logging, acquisition, operation and sale of oil and gas assets, mining of Manganese and other metals. The respondent on the other hand is a company incorporated under the Laws of Mauritius. The respondent is engaged inter alia in the business of making investments by way of equities in private and public companies on a negotiated basis.

3. The petitioners’ case is that the understanding between the parties was that the respondent would procure farm out transactions of oil and gas blocks for P2. For such farm out transactions, the respondent would be paid a commission separately. On the date of the Shareholders’ Agreement (SHA), P2 was allotted oil and gas blocks in the Republic of Gabon. There were proposed oil blocks to be procured by execution of Production Sharing Contract (“PSC”) in Brunei as well as in Tajikistan. In their affidavit the respondent admitted this arrangement between the petitioners and the respondent and also admitted the receipt in the name of Valpro, a sum of US $ 625,000, claiming that the same was paid by the petitioners for services rendered in relation to the farm out contracts.

4. In March, 2006 the respondent was successful in farming out the oil blocks of P2 through Oil India Limited and Indian Oil Corporation Limited for which their company Valpro Private Limited was paid a commission of US $ 625,000 i.e. 5% of the value of the farm out. Subsequently, attempts were purported to be made by the respondent to farm out oil and gas blocks for P2, but the respondent could not procure any farm out transaction. Between March, 2006 and 23rd April, 2008 correspondence was exchanged between the parties i.e. P1 and P2 and the respondent. From that correspondence, it will appear that disputes and differences cropped up between the parties. Allegations were made by the respondent that P1 was allegedly falsifying and manipulating the accounts of P2. There were several other allegations which are not required to be discussed in detail.

5. The petitioners’ case is that the respondent was deliberately postponing and delaying the holding of the AGMs of P2 and was thereby delaying the finalization of accounts which was absolutely necessary for submission of proposals to foreign Governments for procuring oil block. The petitioners’ further case is that the respondent through its representatives, Anshuman Khanna, Santosh Gadia and their company Seana Energy Pte. Ltd. were making presentations to prospective purchasers/operators for farming out assets of P2 in breach of the Shareholders’ Agreement and was unjustifiably demanding remittances without the desired business for P2. The correspondence exchanged between the petitioners and the respondent between 28th August, 2006 and 22nd April, 2008 would show that disputes were brewing between the parties.

6. On 23rd April, 2008 a Settlement Agreement (Annexure-P8 pg. 116 Vol.1) was executed between P1 and the respondent; Clause C thereof stipulates that there have been disputes and differences between P1 and the respondent in relation to SHA and the management of the company and with a view to amicably resolve the same, P1 agreed to purchase the entire interest of the respondent in P2.

7. Clause 2(c)(i) and (ii) of the Settlement Agreement stipulates:

“2(c) An amount equal to 10% of the gross