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IN THE HIGH COURT OF DELHI
C. Hari Shankar, J.
Innovision Limited - Appellant
Versus
Nayati Healthcare Research Pvt. Ltd. - Respondent
Arb.P. 518 of 2020
Decided On : 05-04-2021
The court upheld the arbitration clause of a security services agreement and referred disputes to the Delhi International Arbitration Centre for resolution.
Headnote:(A) Arbitration and Conciliation Act, 1996 - Section 11(6) - Appointment of arbitrator - Petition filed for appointment of an arbitrator due to disputes arising from a Security Services Agreement dated 03.01.2019 - Respondent failed to clear outstanding dues, leading to arbitration invocation. (Paras 2, 7 and 10)
(B) Arbitration Agreement - Clause 44 of the Security Services Agreement provides for resolution of disputes by arbitration - The parties agreed to refer the disputes to the Delhi International Arbitration Centre for appointment of an arbitrator. (Paras 4 and 6)
Facts of the case:
The petitioner, having provided security services under an agreement, claimed outstanding dues amounting to Rs.67,66,397/-, following the respondent's failure to honor payment obligations.
Findings of Court:
The court referred the matter for arbitration at the DIAC due to unresolved disputes over payment.
Issues: Whether the disputes as described in the petition fell under the arbitration clause of the agreement.
Ratio Decidendi: The court highlighted the necessity to resolve disputes through arbitration as agreed in the contractual terms while emphasizing the importance of adhering to the provisions laid out in the Arbitration and Conciliation Act.
Result: Petition disposed of, referring disputes to DIAC for appointment of an arbitrator.
| Table of Content |
|---|
| 1. dispute regarding unpaid services and arbitration invocation. (Para 2 , 3 , 5) |
| 2. arbitration clause in the security services agreement. (Para 4) |
| 3. referral to diac for appointment of arbitration. (Para 6 , 7 , 8 , 9) |
| 4. final disposition of the petition. (Para 10) |
ORDER (Oral)
1. With the consent of learned counsel for the parties, this petition is being disposed of at this stage.
2. This petition, preferred under Section 11(6) of the Arbitration and Conciliation Act, 1996 ("1996 Act"), seeks appointment of an arbitrator to arbitrate on the disputes between the parties.
3. The substratum of the dispute as set out in the petition and without prejudice to the rights of the respondent to contest the averments in the petition on the facts and in law, may be reproduced thus:
"ii. That the Respondent expressed its desire to avail the Security Services of the Petitioner. The Security Service Agreement dated 03.01.2019 was entered into between the parties to provide Security services. Pursuant thereto, the Respondent, availed the Security Services as detailed in the terms of arrangement. Copy of Security Services Agreement dated 03.01.2019 is marked as Document P/1.
iii. That pursuant to entering the Agreement mentioned above, the Petitioner fulfilled all the requirements of the Respondent and rendered immaculate services at its premises to their utmost satisfaction. The Petitioner provided the Respondent Security Staff, as stipulated in the Agreement mentioned above.
iv. That the Petitioner did not receive certain payments against its bills for the services rendered to the Respondent. There is an outstanding amount of Rs.67,66,397/- (Rupees sixty seven lakh, sixty six thousand three hundred and ninety seven only), excluding 30 days notice period payment. Copy of the Ledger Account from 01.04.2019 to 09.09.2020 is marked as Document P/2.
v. That the Petitioner on several occasions apprised and requested the Respondent through various correspondences and communications to clear the outstanding dues mentioned above. The monthly bills were timely served upon the Respondent. But the Respondent in utter disregard of the agreement, arbitrarily and intentionally, did not settle the outstanding dues.
vi. That subsequently the Respondent started raising false and baseless accusations against the services of the Petitioner. The same was done with a mala fide intention of not releasing the outstanding payments.
vii. That the Petitioner vide Notice dated 23.05.2020 invoked the arbitration and further called upon the Respondent to pay the said amount, due and payable under the Agreement between the parties towards the services rendered to the Respondent by the Petitioner. The Respondent received the said Notice sent via speed post on 26.05.2020. The Respondent released some payment and at present there is an outstanding of Rs.67,66,397/- (Rupees sixty seven lakh, sixty six thousand three hundred and ninety seven only), excluding 30 days notice period payment. Copy of the Notice dated 23.05.2020 along with the postal receipt, tracking report and service endorsement are marked as Document P/3 Colly."
4. Clause 44 of the Security Services Agreement dated 3rd January, 2019, executed between the parties, provides for resolution of the disputes by arbitration, read thus:
"PART XI
GOVERNING LAWS AND SETTLEMENT OF DISPUTE
44. Any claims, dispute and or difference (including a dispute regarding the existence, validity or termination of this Agreement) arising out of, or relating to this Agreement including interpretation of its terms will be resolved through joint discussions of the authorised representative of the Parties. However, if any such claim, dispute or difference cannot be resolved through such joint discussions within thirty (30) days of the date of the notice then the matter shall be referred for adjudication to the arbitration of a sole Arbitrator to be appointed solely by the Client in accordance with the provisions o
