Premature petitions under Section 11 of the Arbitration and Conciliation Act, 1996, are not maintainable when a Sole Arbitrator has already been appointed, and unresponsiveness of the current Arbitrator is not a valid ground for such a petition.

ORDER

Chandra Dhari Singh, J. (Oral)--The instant petition under Section 11 of the Arbitration and Conciliation Act, 1996 (hereinafter "the Act") has been filed on behalf of the petitioner seeking the following reliefs:

"a) Allow the present petition and appoint an independent and impartial sole Arbitrator on DIAC, Delhi High Court panel with a direction to adjudicate upon the disputes having arisen between the parties to the present petition;

b) Pass such other order and further orders as this Hon'ble Court may deem fit and proper."

2. Learned counsel for the petitioner submits that the petitioner is a company incorporated under the Companies Act, 2013. Learned counsel for the petitioner submits that the petitioner entered into a Manufacturing agreement dated 25th July 2012 with Mindscape one marketing Pvt. Ltd., which has been amalgamated with the respondent vide order dated 4th October 2016 passed by the High Court of Rajasthan.

3. Learned counsel for the petitioner further submits that as per the manufacturing Agreement, the petitioner agreed to manufacture specified breads in accordance with the specifications and standards provided by the respondent from time to time. He further submitted that the said Agreement was for an initial term of seven years unless renewed by the parties and could be terminated by giving a prior notice of ninety days by any of the parties. The said agreement also provided an arbitration clause as reproduced below:

"17.2 Arbitration

17.2.1 Any and all claims, disputes or controversies involving the parties and arising out of or in connection with or relating to this agreement, or the execution, interpretation, validity, performance, breach or termination hereof, including, without limitation, the provisions of this clause (individually, a dispute) that is not settled to the satisfaction of the parties under Article 17.1 above shall-be finally resolved by arbitration in accordance with the rules of Indian Arbitration and Conciliation Act, 1996 and any amendment of the same effected and enacted from time to time.

17.2.2 For the purpose of such arbitration, the Company shall appoint the Sole Arbitrator.

17.2.3 The place of arbitration shall be Delhi."

4. Learned counsel for the petitioner submits that the petitioner started functioning after setting up the plant within time frame provided in the agreement. However, within few months, the respondent started acting in violation of the terms agreed between the parties. He further submits that the respondent was not placing the purchase orders in accordance with the promises made in relation to its quantitative demands, acting on which the petitioner invested in huge amount of time and money on the capacity of the plant and machinery.

5. It is submitted that the respondent kept holding the payments of the invoices issued by the petitioner, while on the other side, the petitioner was incurring costs to keep running the plant including the interest which it was paying for the loans taken from the banks. He further submits that when the petitioner started complaining about the same, the respondent illegally, arbitrarily and suddenly terminated the agreement between the parties vide letter dated 14th March 2014 by alleging inter alia that petitioner failed to provide the congenial and conducive atmosphere to the supervisory team deputed by it in the factory premises.

6. Learned counsel for the petitioner submits that several Emails were sent by the petitioner to the respondent to release the payments but the respondent was unresponsive. It is further submitted that the respondent without replying to any Emails, letters and legal notice sent by the petitioner and in violation of the arbitration clause as provided under the Agreement, constituted an arbitral tribunal unilaterally on 12th April 2014 and appointed three members to it on its own. The petitioner objected to the unilateral constitution of the Arbitral Tribunal by the respondent and further wrote an