The court confirmed the validity of an arbitration agreement in a commercial contract despite challenges to its execution, emphasizing the importance of honoring arbitration clauses within contractual disputes.

JUDGMENT

Sanjeev Narula, J. (Oral):--The present petitions under consideration, one filed under Section 11 (6) of the Arbitration and Conciliation Act, 1996 [hereinafter referred to as the `Act'] and the other filed under Section 9 of the Arbitration and Conciliation Act, 1996, pertain to an Authorised Dealer Agreement dated 20th February, 2018, executed between the parties, containing an arbitration clause.

2. The facts giving rise to the disputes between the parties are summarised as follows:

i. The Petitioner - Hero Motocorp Limited, is a company incorporated under the Companies Act, 1956, and is involved in the business of manufacturing of two-wheeler automobiles [hereinafter referred to as `HML']. Respondent No. 1, R.K. Mahajan Enterprises, is a partnership firm [hereinafter referred to as `RKME'], of which Mr. Ravi Karan Mahajan [Respondent No. 2 in Arb. P. 468/2020 and Respondent No. 3 in OMP(I)(Comm) 313/2020.] and Ms. Chand Rani [Respondent No. 3 in Arb. P. 468/2020 and Respondent No. 2 in OMP(I)(Comm) 313/2020] are partners. For the sake of completeness of facts, it is noted that there is a sister concern of RKME, titled M/S. RKM Global, of which Mr. Ravi Karan Mahajan is the sole proprietor [hereinafter referred to as `RKMG'].

ii. On the basis of the representations of RKME, vide Letter of Appointment dated 08th March, 1985, the Firm was appointed as a non-exclusive dealer of HML's products at Jalandhar, Punjab. Pursuant to the said appointment, RKME and its partners started carrying out business as authorised dealers of HML, including sale of products and spare parts, and servicing thereof.

iii. Thereafter, the parties entered into an Authorised Dealer Agreement dated 20th February, 2018, which was executed in counterparts with one original copy being available with each party [hereinafter referred to as `the Agreement']. It was executed on behalf of RKME by Mr. Ravi Karan Mahajan in his capacity as partner.

iv. Owing to the arrears of payments, HML was constrained to issue a termination letter dated 28th August, 2019 wherein, it called upon RKME to clear outstanding dues and to adhere to Clause 19.2 of the Agreement (being consequences of termination of Agreement), and further called upon RKME to refrain from carrying out any activities of an authorised seller as well as from using the trademark/trade names of HML.

v. On 18th July, 2020, HML received an email from Bank of Baroda, GT Road Branch, Jalandhar, Punjab stating that RKME had availed credit facilities from its bank, for which it had submitted the Agreement with HML, and further sought confirmation as to whether RKME was still the Dealer of HML.

vi. Thereafter, HML invoked arbitration vide notice dated 11th March, 2020, and called upon RKME to either agree to the name of a Sole Arbitrator suggested therein or to treat the said name as a nominee of HML and further called upon RKME to nominate its Arbitrator for constituting an arbitral tribunal in terms of the Arbitration Clause.

vii. According to HML, as on 22nd September, 2020, an amount of Rs. 6.45 Crores, (including Rs. 5.25 Crores as principal and Rs. 1.24 Crores on account of interest on delayed payments) is due and payable by RKME and its partners to HML towards products supplied by HML after deducting security deposit of Rs. 4 Lakhs.

3. In the above noted factual background, HML has now approached this Court by way of two separate petitions for: (a) appointment of the arbitral tribunal,