The court reinforced that unilateral appointment of an arbitrator contradicts arbitration laws, allowing a petition for appointing a Sole Arbitrator despite an ongoing moratorium under IBC.

JUDGMENT

[VIA VIDEO CONFERENCING]

Sanjeev Narula, J. (Oral):--The existence of arbitration agreement between the parties is not in dispute, yet Delhi Transport Corporation rigidly opposes this petition filed under Section 11 of the Arbitration and Conciliation Act, 1996 [hereinafter, `the Act'] seeking appointment of a sole arbitrator. Let's examine the merits of the objections.

2. The factual matrix is as follows:

(i) Pursuant to a request for proposal issued in January, 2015 by the Respondent, the Petitioner submitted a bid. It was declared to be the successful bidder, and this led to issuance of Letter of Acceptance dated 1st September, 2015. A formal Work Order was executed shortly thereafter on 30th September, 2015. The said agreement contains an Arbitration Clause, which reads as under:

"5.2 Settlement of Disputes

A. Performance of the contract is governed by the terms &conditions of the contract. In case of dispute arises between the parties regarding any matter under the contract, either party the contract may send a written notice of dispute to the other party. The party receiving the notice of dispute will consider the notice and respond to it in writing within 30 days after receipt."

B. Arbitration:

i. Amicable Resolution

1. Save where expressly stated otherwise in this Agreement. Any dispute, difference or controversy of whatever nature howsoever arising under, out of or in relation to this Agreement between the Parties and so notified in writing by either Party to the other (the "Dispute'') in the first instance shall be attempted to be resolved amicably by the Parties and failing such resolution of the same in accordance with the procedure set forth in sub-article (2) below.

2. Either Party may require the Dispute to be referred to the Chairman-cum-MD. DTC and CEO of the prospective 1A or any officer/executive authorized by them for amicable settlement. Upon such reference, both the Parties and the CMD or his nominee shall meet at the earliest mutual convenience and in any event within 15 (fifteen) days of such reference to discuss and attempt to amicably resolve the Dispute. If the Dispute is not amicably resolved within 15 (fifteen) days of such meeting, the Party may approach for reference of Dispute to arbitration in accordance with the provisions of indicated below.

ii. Appointment of Arbitrator

1. Any dispute which is not resolved amicably as provided in Amicable Resolution: point no-1, then the same shall be referred to the Sole Arbitrator CMD, Delhi Transport Corporation or to some other person appointed and nominated by him/her. There will be no objection to the contractor that the arbitrator is an employee or the Delhi Transport Corporation that he had dealt with matters to which contract relates or that in the course of his duties as an employee of DTC he had expressed his opinion or views on all or any of the matter in dispute or difference.

2. In the event of Arbitrator dying, neglecting or refusing to act or resigning or unable to act for any reason or his award being set aside by the court for any reason, it shall be lawful for the authority appointing the arbitrator to appoint another arbitrator in place of outgoing arbitrator in the manner aforesaid.

(Emphasis Supplied)"

(ii) According to the Petitioner, they started fulfilling their obligations under the aforenoted agreement, but the Respondent did not extend its cooperation. Hinderances were created to ensure that Petitioner did not achieve critical milestones as envisaged under the agreement. Despite that, Petitioner raised invoices in conformity with the agreement, to which no dispute was raised by the Respondent, yet, payments were not made