The court's decision emphasized the importance of appointing an arbitrator when efforts at amicable resolution have not succeeded, and there is no stipulation for amicable resolution in the arbitration clause.

JUDGMENT :

(Video-Conferencing)

1. This petition under Section 11(6) of the Arbitration & Conciliation Act, 1996 (hereinafter referred to as “the 1996 Act”) invokes the provision for arbitration as contained in Clause 12 of a Share Buyback Agreement, dated 27th March, 2018, executed between the petitioner and the respondents.

2. Insofar as the dispute between the parties is concerned, it would be most appropriate to reproduce paras a to s of the petition, thus:

“a. That by way of a Employment Contract dated 01.04.2013 (hereinafter referred to as "Employment Contract"), Respondent No.1 Company i.e. M/s Ozone Overseas Pvt. Ltd. (hereinafter referred to as "Respondent No. 1 Company") employed the Petitioner as Director (Sales) in Respondent No.1 Company on certain terms and conditions.

b. That in accordance with the mutual arrangement and understanding between the Parties at the time of joining the Respondent No. 1 Company, an allotment of 42,707 equity shares of the Respondent No.1 Company was made in favour of the Petitioner @ 0.5% of the outstanding shares of Respondent No. 1 Company, for each year of service. In furtherance of the aforesaid, an allotment of 31,871 equity shares of Respondent No. 1 Company was made in the form of sweat equity shares on 06.05.2016 for service from 01.04.2013 to 31.03.2016 and an allotment 10,836 equity shares was made in form of sweat equity shares on 24.11.2016 for service in financial year 2016-20 17.

c. It is stated that the aforementioned sweat equity shares were issued with a lock-in period of 3 years from date of issue. Lock-in period with respect to the above mentioned 31,871 number of equity shares expired on 05.05.2019 whereas the lock-in period with respect to the 10,836 number of equity shares expired on 23.11.2019. Thus, as on date, the Petitioner is the beneficial owner of and is holding the aforesaid 42,707 number of equity shares bearing folio no. 24 and share distinctive nos. 2124735 to 2156605 and 2167224 to 2178059 (hereinafter referred to as the "Said Shares") in Respondent No. 1 Company.

d. That as per a verbal mutual understanding between the Petitioner and the Respondent No.2, who was acting on behalf of the Respondent No. 1 Company, at the time of the Petitioner's joining, the terms of employment of the Petitioner were to be renewed and a fresh employment contract had to be executed between the Petitioner and Respondent No. 1. Based on the Petitioner's outstanding performance and firm commitment shown by the Petitioner during the course of his employment, the Respondent No.1 Company promoted the Petitioner as CEO of Respondent No.1 Company, and offered additional sweat equity shares employee stock options, and fresh terms and conditions for employment were discussed between the Parties. The draft of the said terms were in fact duly agreed between the Parties and the final draft agreement was also exchanged between the Parties, however, on one pretext or the other, Respondent No. 1 Company and its management avoided the execution/signing of the revised employment agreement.

e. That during the course of Petitioner's employment, the aforementioned Share Buyback Agreement was executed amongst the Petitioner, Respondent No. 1 Company's Promoter Group represented by its Managing Director namely Shri Alok Aggarwal (Respondent No.2), and Respondent No. I Company. It is stated that in addition to the general terms and conditions the Share Buyback Agreement inter alia specifies valuation methodology, as well as dispute resolution mechanisms for the purchase of the Said Shares by the Promoter Group and/or Respondent No. 1 Company as the case may be.

f. That in terms of Para C of the preamble of the Share Buyback Agreement, after the expiry of the lock-in period, Petitioner became entitled to sell the Said Shares by offering it first to the Promoter Group duly represented by Respondent No. 2 or its nominees; and in the event the Promoter Group or its nominee refuses to buy the Said Shares wit