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IN THE HIGH COURT OF DELHI AT NEW DELHI
Chandra Dhari Singh, J.
Vimal Banka Karta of Vimal Kumar Bhajan Lal Banka Huf – Appellant
Versus
Royalgolf Link City Project Private Limited & Ors. – Respondents
Arb.P. 856 of 2022
Decided On : 27-02-2023
Arbitration - Appointment of Sole Arbitrator - Arbitration and Conciliation Act, 1996, Section 11(6)
Fact of the Case:
The petitioner sought appointment of a sole arbitrator under section 11(6) of the Arbitration and Conciliation Act, 1996 for disputes arising from a Memorandum of Understanding (MoU) and subsequent Renewal Agreements related to a real estate investment.
Finding of the Court:
The court found the dispute to be arbitral in nature and appointed a sole arbitrator to adjudicate the disputes between the parties as per the MoU and Renewal Agreements.
Issues: Appointment of sole arbitrator, compliance with Section 12(1) of the Arbitration and Conciliation Act, 1996, and determination of arbitrator's fees.
Ratio Decidendi: The court's decision was based on the nature of the dispute and the arbitration clause in the Renewal Agreement, leading to the appointment of a sole arbitrator and directions for compliance with relevant provisions of the Arbitration and Conciliation Act, 1996.
Final Decision: The court appointed Mr. Apoorv Kurup as the sole arbitrator, directed compliance with Section 12(1) of the Act, and determined the arbitrator's fees. The parties were instructed to appear before the arbitrator, and all contentions were kept open.
ORDER
Chandra Dhari Singh, J. (Oral)
1. The present petition has been filed by the petitioner under section 11(6) of the Arbitration and Conciliation Act, 1996 seeking appointment of sole arbitrator for adjudication of disputes between the parties arising out of Memorandum of Understanding (MoU) dated 15th June, 2016.
2. Learned counsel appearing on behalf of the petitioner submitted that the petitioner, Vimal Kumar Banka, is a Karta of Vimal Kumar Bhajan Lal Banka (HUF) and a resident of B-03, Sector-44, Noida, Uttar Pradesh. It is further submitted that he booked a Golf Suit Apartment (Project of Respondent No.1) with the number TF06/12/S3 for investment purposes.
3. It is submitted on behalf of the petitioner that the respondent No.1 is a company constituted under the terms of the Companies Act, 2013 with its registered office located at M-53, II Floor, Block-M, Greater Kailash-II, New Delhi-110048. The respondent No. 1 is involved in the real estate industry. The respondent No.2 is a director of respondent No.1 who provided a personal guarantee to the petitioner on behalf of respondent No.1 for the amount invested as well as the return/interest. The respondents No. 3 and 4 are also directors of respondent No. 1 company.
4. It is submitted that the respondent No. 1 and the petitioner signed an MoU dated 15thJune, 2016. The petitioner purchased a Golf Suit Apartment bearing No. TF06/12/S3 in the project "The Hemisphere" at REP-2, Sector-27, Greater Noida at a rate of Rs. 943.40 per square foot for investment purposes through the aforementioned MoU dated 15thJune, 2016. In furtherance of the same, the petitioner has paid Rs. 15,00,000/- to respondent No. 1.
5. It is submitted that in light of the above-mentioned MoU, it was agreed between the respondent No. 1 and the petitioner that the respondent No. 1 will pay interest on the mentioned amount @26% p.a. to the petitioner. It is further submitted that it was agreed between the petitioner and the respondents that the petitioner would surrender the above-mentioned apartment to respondent No. 1 upon receipt of the above-mentioned whole investment amount plus appreciation. Also, it was agreed between the petitioner and respondent No. 1 that the petitioner is allowed to maintain the aforementioned apartment until respondent No. 1 returns the total investment amount plus appreciation.
6. It is submitted on behalf of the petitioner that respondent No.1 was unable to pay the booking/invested sum of Rs.15,00,000/- together with the appreciated value of Rs.15,00,000/- to the petitioner following the expiration of the aforementioned MoU by 12 months. Thus, the petitioner and the respondent No.1 mutually agreed to extend the above-mentioned MoU for an additional 12 months, and a Renewal Agreement dated 24th August, 2017 to the MoU dated 15thJune, 2016 was executed between respondent No.1 and the petitioner.
7. It is submitted on behalf of the petitioner that vide the said Renewal Agreement, it was agreed between the parties that subsequent to expiry of 12 months from the signing of the renewal agreement the respondent No. 1 will pay Rs. 30,00,000/- to the petitioner. It is further submitted that following the expiration of 12 months from the above- mentioned Renewal Agreement dated 24thAugust, 2017, respondent No. 1 was unable to pay the booking/invested sum of Rs.15,00,000/- in addition to Rs.15,00,000/- in appreciation to the petitioner. The respondent No. 2 and the petitioner reached an agreement to extend the prior Renewal Agreement for an additional year. Therefore, the petitioner and the respondent No. 1 inked a Renewal Agreement dated 11thAugust, 2018 to the MoU dated 15thJune, 2016.
8. It is submitted on behalf of the petitioner that respondent No. 1 again failed to pay the said amount in view of the above-mentioned Renewal Agreement. Subsequent thereto, another Renewal Agreement dated 22nd July, 2019 to the MoU dated 15thJune, 2016 was executed between the parties.
9.
The court's decision emphasized the importance of arbitration clauses in agreements and the applicability of the Arbitration and Conciliation Act, 1996 in resolving disputes.
The presence of an arbitration clause in an agreement, the arbitrability of disputes, and the fulfillment of necessary requisites under the Arbitration Act influence the court's decision to appoint a....
The arbitration clause in a contract should be treated as an independent agreement, and the court has the authority to refer the matter to arbitration even if the main contract is disputed.
The court confirmed the right to appoint an arbitrator due to the respondent's non-compliance with the terms of the agreement, affirming that the disputes were arbitrable.
The court's decision emphasized the arbitrability of the disputes and the appointment of a sole arbitrator under Section 11(5) of the arbitration and Conciliation act, 1996.
The court's authority to appoint a sole arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996.
The main legal point established is the court's authority to appoint a sole arbitrator under Section 11(6) of the arbitration and Conciliation act, 1996 when the parties fail to mutually appoint one,....
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