IMPORTANT POINT
The court established that an arbitration agreement can be inferred from the conduct of the parties and the documents exchanged, and that a signed delivery challan containing an arbitration clause constitutes a valid agreement under the Arbitration and Conciliation Act, 1996.

JUDGMENT/ORDER

1. Heard learned counsel for the parties.

2. By this application filed under Sec. 11 of the Arbitration and Conciliation Act, 1996, the applicant is seeking appointment of arbitrator on the basis that there is an arbitration agreement between the parties. It is submitted that in the facts and circumstances of the present case, a dispute has arisen between the parties. According to the applicant, certain amounts are due and payable to it from respondent No.1, in respect of which a notice invoking arbitration was issued to the respondents, which ultimately led to the applicant appointing a sole arbitrator.

2. According to the applicant, since a specific objection was raised on behalf of the respondents, on the basis that the arbitrator was unilaterally appointed, the arbitrator recused, necessitating filing of the present application.

3. The facts in the present case are in a narrow conspectus. According to the applicant, it is engaged in the business of renting various IT hardware equipments such as computers, laptops etc. Respondent No.1 had approached the applicant for taking such equipments on rent. In pursuance of the negotiations between the parties and the documents exchanged between them, the hardware equipment was made available to respondent No.1. According to the applicant, respondent No.1 failed to pay amounts that were payable for the equipments provided by the applicant and hence, the applicant is entitled to certain amount from respondent No.1.

4. The applicant issued an invocation notice dtd. 7/10/2021 to the respondents and relied upon clause 'U' of the deliver challans, claiming the same to be an arbitration clause / agreement executed between the parties and invoked the said arbitration clause. The applicant proceeded to appoint the sole arbitrator in terms of the said clause in the delivery challans and the arbitrator did enter upon reference and initiated the proceedings. Respondent No.1 objected to the said arbitration proceedings, inter alia, on the ground that the arbitrator had been unilaterally appointed, which was in the teeth of the provisions of the said Act and the position of law recognized by the Supreme Court. In that light, the sole arbitrator took note of the objections raised on behalf of the respondents and withdrew from the arbitration, pursuant to which the applicant has approached this Court by filing the present application.

5. The applicant has annexed certain documents to the application and in the light of the stand taken on behalf of the respondents, and the documents filed along with their reply affidavit, the applicant has relied upon further documents filed with the rejoinder affidavit. It is contended on behalf of the applicant that there is sufficient material on record to indicate that the parties need to be sent to arbitration by appointing a fit and proper person as a sole arbitrator. The respondents filed their reply to the application and at the outset, took objection to respondent Nos.2 to 4 being added as parties to the present proceedings. It was submitted that respondent Nos.2 to 4 being officers of respondent No.1 company, there was no basis for the applicant to have arrayed them as respondents. It was further the stand of the respondents that in the present case, there is no arbitration agreement between the parties as known to law. It is submitted that the delivery challan, containing the purported arbitration clause, is a unilateral document, not signed by any authorized person in accordance with law on behalf of respondent No.1 and that therefore, in the absence of an arbitration agreement, there is no question of the present application being entertained. The reply affidavit has placed on record certain documents to support the contentions raised on behalf of the respondents.

6. The learned counsel appearing for the applicant relied upon the application, additional affidavits, as well as the rejoinder affidavit and the documents filed therewith to contend