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2023 Supreme(Bom) 2350

IN THE HIGH COURT OF BOMBAY
Bharati Dangre, J.
K Sera Sera Box Office Pvt.Ltd and ors. - Petitioners
Versus
City Services and ors. - Respondents
Commercial Arbitration Petition (L) No.2467 of 2023 With Arbitration Application (L) No. 1345 of 2023
Decided On : 07-07-2023

Advocates:
Advocate Appeared:
For the Petitioner: Mr. Mutahhar Khan with Mr.S.A. Pathak
For the Respondent: Mr.Sanjay Kumar with Mr. Ashish Dubey

Headnote:(A) Arbitration and Conciliation Act, 1996 - Sections 9 and 11 - Appointment of Sole Arbitrator - The court emphasizes the imperative nature of arbitration agreements as found in three identically worded contracts executed on 18-12-2021 - Disputes regarding franchisee operations necessitate arbitration, with appointment made in absence of consensus on arbitrator - The terms of appointment and subsequent procedures are detailed for smooth conduct of arbitration. (Paras 1-5)

Facts of the case:
The dispute arises from three agreements related to a franchise operation, wherein the applicant contends that the respondent has violated terms leading to arbitration invocation on 25-04-2023. The respondent acknowledged the existence of the arbitration agreement, yet a consensus on the arbitrator was not reached.

Findings of Court:
The court finds that an arbitration agreement exists and appoints a specific individual as the Sole Arbitrator to adjudicate the disputes arising from the franchise agreements.

Issues: The primary issue was the appointment of an arbitrator amidst disputes regarding the agreement and the corresponding operational claims between parties.

Ratio Decidendi: The court upheld the necessity of appointing an arbitrator when an arbitration agreement is acknowledged, emphasizing the importance of resolving the disputes as per the provisions of the Arbitration and Conciliation Act, 1996.

Result: Both petitions disposed off with directions for arbitration proceedings to commence.

Table of Content
1. existence of arbitration agreements leads to dispute resolution. (Para 1 , 2)
2. disputes arose regarding the arbitration terms and content. (Para 3)
3. both parties acknowledged arbitration agreement but disagreed on arbitrator. (Para 4 , 5)
4. authority of the court to appoint an arbitrator. (Para 6)
5. disposition of the petition and application with orders for arbitration. (Para 7)

JUDGMENT :

Bharati Dangre, J.

Arbitration application under section 11 and petition filed under section 9 of the Arbitration and Conciliation Act, 1996, seek distinct reliefs.

Dealing with the application seeking appointment of the Arbitrator, in the wake of the Arbitration clause, contained in three distinct agreements executed on the very same day i.e. 18/12/2021, in form of a Franchise Agreement, Content Agreement and Franchisee Food Business and Safety Agreement, all the three comprising of a clause for resolving the disputes arising between the parties.

The said agreements being identically worded unequivocal, make it imperative for the parties to refer their disputes to arbitration and contemplate the outcome of the disputes in form of award, to be binding on both the parties.

The arbitration proceedings are contemplated to be conducted in the city of Mumbai and governed by the Arbitration and Conciliation Act, 1996.

2. The Franchisee Agreement and other agreements came to be executed as the respondent desired to acquire the franchisee of 'Chhotu Maharaj cine cafe' and the three agreements set out the terms and conditions subject, to which the franchisee would be awarded.

3. Certain disputes arose between the parties, which resulted in filing of the police complaint by the applicant and also filed the proceedings under section 9 seeking certain interim measures. Correspondence was also exchanged between the parties on the matter of dispute, as the applicant claim that respondent has been showcasing the content provided by the competitors of the agreement at the cine cafe while utilizing its infrastructure.

At one point of time, the applicant received a legal notice from the respondent, indicating to take back material and refund the amount paid by the respondent.

4. In the wake of the dispute, the applicant invoked arbitration on 25/4/2023, and even indicated that the disputes can be resolved amicably and this was responded on 30/4/2023 by the respondents, where there is no denial to the existence of the Arbitration agreement, or that the disputes have arisen. However, the name suggested as an arbitrator was not accepted and another name for the proposed Arbitrator was suggested.

Ultimately, no consensus could be arrived between the parties on the name of the Arbitrator and this has constrained the applicant to approach this Court.

5. The respondents have placed on record an affidavit affirmed on 5/7/2023, and on it's careful reading, an attempt is made by the respondent to create a conundrum about the actual agreement executed between the parties, which was ultimately notarized. The dispute raised is about an agreement dated 28/12/2021 forwarded to the other side, but what was notarized in Mumbai, was an agreement dated 18/12/2021 when the respondent no.2 and 3 were not present in Mumbai.

In any case, since there is no dispute about the existence of an arbitration agreement, and the learned counsel for the respondent while making the submissions do not make a specific statement that no agreement was ever executed between the parties, and which is sought to be invoked for the purpose of appointing a Sole Arbitrator, with the statement coming from the counsel for the applicant that once an Arbitrator is appointed, the petition under section 9 shall be permitted to be converted into an application under section 17 and the interim relief can be prayed, I deem it appropriate to exercise it's power under sub-section (6) of Section 11 and appoint an arbitrator, particularly when the arbitration clause exist in the three distinct agreements exe

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