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IN THE HIGH COURT OF DELHI AT NEW DELHI
Chandra Dhari Singh, J.
Sharad Arora & Anr. – Appellants
Versus
Kkh Finvest Pvt. Ltd. & Ors. – Respondents
O.M.P.(I) (COMM.) 56 of 2023
Decided On : 12-04-2023
Arbitration Act - Appointment of Sole Arbitrator - Section 9
Fact of the Case:
The petitioners, former promoters of respondent no. 2 Company, sought relief under Section 9 of the Arbitration and Conciliation Act, 1996 due to disputes arising from a Memorandum of Settlement and Share Purchase Agreements executed between the parties.
Finding of the Court:
The court found that there were disputes between the parties which were arbitrable in nature and in consensus that the disputes may be referred to an arbitrator. Consequently, the court appointed Justice T.S. Thakur as the sole arbitrator to adjudicate the disputes.
Issues: Disputes arising from Memorandum of Settlement, Appointment of Sole Arbitrator
Ratio Decidendi: Existence of Arbitration Clause in the Memorandum of Settlement, Consensus of parties to refer disputes to an arbitrator, Compliance with Section 12(1) of the Arbitration and Conciliation Act, 1996
Final Decision: Appointment of Justice T.S. Thakur as the sole arbitrator to adjudicate the disputes between the parties, directions for compliance with Section 12(1) of the Arbitration and Conciliation Act, 1996, and payment of fees as per the Delhi International Arbitration Centre Rules.
ORDER
Chandra Dhari Singh, J. (Oral)
1. The instant petition under Section 9 of the Arbitration and Conciliation Act, 1996 (hereinafter "Arbitration Act") has been filed on behalf of the petitioners seeking the following reliefs:
"a. Direct the Respondents to withdraw the email dated 31.03.2023 issued by Ravi Burman against Petitioner No. 1
b. Direct/Restrain/Injunct the Respondents from making any disparaging/defamatory/libellous statements against the Petitioners in terms of Clauses 71 and 76 of the MoS dated 09.05.2022;
c. Direct the Respondent No. 1 to deposit before this Hon'ble Court/secure a sum of Rs. 2,00,00,000/- towards the "Severance" amount payable to Petitioner No. 1 in terms of the Memorandum of Settlement dated 09.05.2022;
d. Direct the Respondent No. 1 to deposit before this Hon'ble Court/secure a sum of Rs. 68,74,838 towards dues outstanding and payable to Jonas Haggard mentioned in Schedule 11 of the Memorandum of Settlement dated 09.05.2022;
e. Direct the Respondent No. 1 to deposit before this Hon'ble Court/secure a sum of Rs. 30,90,000/- towards dues outstanding and payable to the Consultants with whom Consultancy Agreements were executed as per the terms of Memorandum of Settlement dated 09.05.2022;
f. Restrain the Respondents from taking any other steps or actions adverse to the interests of the Petitioners;
g. Pass any other or further orders as this Hon'ble Court may deem fit in the facts and circumstances of the case."
2. Mr. Rajshekhar Rao, the learned senior counsel appearing on behalf of the petitioners submitted that the petitioners are former promoters of respondent no. 2 Company where respondent no. 1 is the strategic investor. It is submitted that a Share Subscription and Share Holders' Agreement was executed between the respondent no. 1 and the petitioners on 27th May 2016. However, during the period of the Agreement, several disputes arose between the parties.
3. It is submitted that subsequently, attempts were made by both the parties to settle the disputes amicably and accordingly, a Memorandum of Settlement and Share Purchase Agreements was executed on 9th May 2022.
4. It is submitted that pursuant to the signing of the Memorandum of Settlement, the respondents have not been abiding by the terms and conditions as well as certain clauses laid down therein. It is further submitted that there is a necessity for the parties to settle the dispute as per the terms and conditions alongwith the relevant clauses of the Memorandum of Settlement, and if in case the dispute does not get resolved amicably, then an arbitrator may be appointed by this Court to settle the same.
5. The learned senior counsel for the petitioners submitted that the petitioners have made an attempt to settle the disputes amicably, however, all attempts have gone in vain. Therefore, it is prayed that both the parties may be directed to abide by the terms and conditions of the Memorandum of Settlement.
6. Mr. Sandeep Sethi and Mr. Arvind Varma, the learned senior counsels for the respondents vehemently opposed the averments raised in the petition.
7. After some length of arguments, the learned senior counsels for the parties conceded that the controversy and disputes raised in the instant matter may be raised before and settled by an arbitrator, for which this Court may pass appropriate directions and appoint an independent sole arbitrator.
8. Heard the learned counsel for the parties and perused the record.
9. The petitioners have approached this Court by way of the instant petition seeking urgent relief against the respondents. Upon perusal of the record as well as the arguments advanced on behalf of the parties, it is evident that there are disputes between the parties, which may be adjudicated and settled by an arbitrator. Moreover, the parties are also in consensus that the disputes between them may be referred to an arbitrator.
10. Therefore, it is evident that there is an Arbitration Clause in existence, that is, Cla
The court's decision emphasized the importance of arbitration clauses in settlement agreements and the parties' consensus to refer disputes to an arbitrator.
The existence of an arbitration clause in an agreement, the arbitrability of disputes, and the fulfillment of necessary ingredients for the appointment of an arbitrator under the Arbitration Act are ....
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 in the judgment is the court's authority to appoint a sole arbitrator to adjudicate disputes between parties when there is an agreement to refer the disputes to arbit....
The main legal principle established in the judgment is the court's authority to appoint a Sole Arbitrator and refer disputes arising from a tender to Arbitration in accordance with the provisions of....
The main legal point established in the judgment is the court's authority to refer disputes to arbitration when both parties have invoked the arbitration clause and there are admitted arbitral disput....
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 Arbitra....
The court maintains the power to appoint a sole arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996, when parties have existing arbitration clauses in their agreements and pr....
The court appointed an arbitrator as the parties consented to arbitration under the existing arbitration clause, complying with statutory requirements.
The court's decision emphasized the arbitrability of disputes and the appointment of a sole arbitrator under the Arbitration and Conciliation Act, 1996.
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