The main legal point established in the judgment is the interpretation of contract terms and the determination of the existence of a valid arbitration agreement under the Arbitration and Conciliation Act, 1996.

1. By this petition filed under section 34 of the Arbitration and Conciliation Act, 1996, the petitioner has impugned the arbitral award dated 27th December, 2011 allowing the claims made by the respondent and directing the petitioner to pay the sum of Rs.7,18,673/- with interest at the rate of 12% per annum w.e.f. 4th April, 2011 till payment. Some of the relevant facts for the purpose of deciding this petition are as under:-

2. Sometime in the year 2009, the petitioner was desirous of selling their entire shareholding to a prospective buyer/investor for an amount of Rs.25 crores. The petitioner wanted to avail of the services of an intermediary to sell of the company of the petitioner. On 8th September, 2009 the petitioner and the respondent entered into an agreement under which the petitioner appointed the respondent as an intermediary for the sale of the petitioner company on the terms and conditions recorded therein. Under the said agreement, the scope of the services of the respondent was defined. Under clause III of the said agreement, the fees payable to the respondent was described as under:-

iii. “Our Fees

ACMIIL will charge :

a. If the proposed sale to strategic/Financial Investor(s) is executed, a fee equivalent to 2.25% of the total transaction value.

3. It is not in dispute that pursuant to the said agreement, the respondent introduced a party known as Ortus Capital. The said Ortus Capital by their e-mail dated 5th June, 2010 to the petitioner herein forwarded the letter of intent with agreed terms and called upon the petitioner to send executed copy with the signatures of all the shareholders of the petitioner. The said writing was admittedly executed between the petitioner and the said M/s.Ortus Capital.

4. It is not in dispute that on execution of the said agreement between the petitioner and the respondent, the petitioner has already paid a sum of Rs.0.15 million payable on signing of the said document as front fees to the respondent.

5. It is not in dispute that upon execution of the said agreement dated 5th June, 2010, the said transaction did not materialize between the petitioner and the said M/s.Ortus Capital.

6. The respondent issued an invoice upon the petitioner for making a claim towards 25% of the total fees payable to the respondent from the petitioner under the said agreement on receipt of the term sheet from the prospective investor. The petitioner did not pay the said amount. Dispute arose between the parties and was referred to the arbitration. The arbitrator was nominated by the respondent by invoking clause 3 of the said agreement entered into between the parties.

7. Pursuant to the directions issued by the learned arbitrator both parties filed pleadings. No oral evidence was led by any of the parties before the learned arbitrator.

8. By the impugned award, the learned arbitrator directed the petitioner to pay a sum of Rs.7,18,673/- with interest at the rate of 12% per annum from the date of invoking arbitration i.e. 4th April, 2011 till payment. This award had been impugned by the petitioner in this petition filed under section 34 of the Arbitration and Conciliation Act, 1996.

9. Mr.Singh, learned counsel appearing for the petitioner submits that under the agreement entered into between the petitioner and the respondent the petitioner has already paid a sum of Rs.0.15 million on the signing of the said agreement. It is submitted that in so far as further sum of 25% of the total fees payable to the respondent is concerned, the said fees was payable only if the sale transaction of the petitioner company would have bee