The court upheld the arbitration agreement and allowed the appointment of a Sole Arbitrator to adjudicate the disputes between the parties.

JUDGMENT

Sachin Datta, J. The present petition under Section 11 of the Arbitration and Conciliation Act, 1996 (the "A&C Act") seeks constitution of the Arbitral Tribunal to adjudicate the dispute between the parties.

2. The disputes between the parties have arisen in the context of a Share Purchase Agreement ("SPA") dated 17.04.2018, entered into between the petitioners and the respondents. In terms of the said SPA, the petitioners, inter alia, agreed to sell/transfer their shareholding in respondent no.2 to respondent no.1 for certain consideration.

3. The respondents have placed on record the original duly stamped SPA.

4. The petitioners, inter alia, claim alleged failure on part of the respondents to pay "adjusted consideration" equivalent to potential tax refunds in terms of Clause 3.1 (b) read with Clause 5.1.3 and other clauses of the SPA, and also alleged outstanding loan amount of Rs.44,00,000/- extended by petitioner no.1 to respondent no.2. It is also averred that respondent no.1 being the purchaser was also obligated to facilitate the repayment of the entire loans standing in the accounts of respondent no.2.

5. The aforesaid Share Purchase Agreement dated 17.04.2018 contains an arbitration agreement in the following terms:

"12. Governing Law, Arbitration and Submission to Jurisdiction

12.1 Governing Law and Jurisdiction: This agreement and the documents to be entered into pursuant to it, save as expressly referred to therein, and any obligations arising out of or in connection with this Agreement and such documents (including non-contractual obligations) shall be governed by and construed in accordance with the laws of Republic of India. The Courts at Delhi shall have exclusive jurisdiction.

12.2 Dispute Resolution: If any dispute, difference, controversy or claim arises out of, in relation to or in connection with this Agreement (including but not limited to any question regarding its existence, validity, interpretation, breach or termination) (a "Dispute"), it shall be referred, upon written notice (a `Dispute Notice") given by one Party to the other, to a final and binding arbitration.

12.3. Any Dispute which has not been satisfactorily resolved within thirty (30) days of the Dispute Notice being issued shall be referred to arbitration.

12.4, The arbitration shall be conducted by an arbitral tribunal consisting of three (3) arbitrators, with each disputing party appointing 1 (one) arbitrator and the 2 (two) arbitrators so appointed jointly appointing 1 (one) more arbitrator, who shall act as the third and presiding arbitrator.

12.5. The arbitration proceedings will be carried out in accordance with the Indian Arbitration and Conciliation Act, 1996 and the seat of arbitration will be New Delhi, India. The arbitration proceedings will be conducted in the English language.

12.6. Each Party shall pay its own fees, disbursements and other charges, including legal fees, except as may be determined by the arbitral tribunal. The arbitral tribunal have the power to award interest on any sum awarded pursuant to the arbitration proceedings and such sum would carry interest, if awarded, until the actual payment of such amount.

12.7. Save as required by Law or regulation, no Party or person involved in any way in the creation, coordination or operation of the arbitration of any Dispute may disclose the existence, content or results of the Dispute or any arbitration conducted under this Agreement in relation to that Dispute to a third party."

6. The petitioners invoked the aforesaid arbitration agreement vide notice dated 01.11.2022, whereby the petitioners named its nominee arbitrator and called upon the respondents to name its nominee in terms of the aforesaid clause. Without prejudice to the same, the petitioners also sought waiver of the requirement of constitution of a three-member arbitral and requested the respondents to consider appointment of the arbitrator suggested by the petitioners as the Sole Arbitrator. No reply the