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IN THE HIGH COURT OF DELHI
Suresh Kumar Kait, J.
MBD Printographics Pvt. Ltd. - Appellant
Versus
Paragon Paper Industries - Respondent
Arb.P. 506 of 2021
Decided On : 13-01-2022




The court affirmed the necessity for arbitration as agreed by the parties in their contracts, appointing a sole Arbitrator to resolve multiple disputes arising from distinct agreements.

Headnote:(A) Arbitration and Conciliation Act, 1996 - Section 11(6)(A) - Petition for appointment of sole Arbitrator - Parties agreed to refer disputes arising from multiple agreements to arbitration - Respondents have not objected to the appointment of the Arbitrator, and multiple arbitration proceedings to adjudicate distinct agreements are permitted. (Paras 7, 17, 18)

(B) Agreements - Clauses stipulating indemnification and dispute resolution through sole Arbitrator - Terms of agreements explicitly mandate reference to Arbitration in case of disputes. (Paras 10, 11)

(C) Proceedings - The learned Arbitrator directed to adjudicate disputes through three different arbitration proceedings based on the agreements between the parties. (Paras 18, 19)

Facts of the case:
The petitioner company, engaged in paper products, invoked arbitration against the respondents for unpaid debt amounts to Rs.8,52,03,262/- as per several agreements dated 11.10.2018. Respondents failed to resolve disputes amicably and declined to appoint an Arbitrator when requested.

Findings of Court:
The petition for the appointment of a sole Arbitrator was allowed and the Arbitrator directed to handle the disputes separately according to agreements.

Issues: The main issues included the refusal of respondents to comply with arbitration requests and the need to appoint a sole Arbitrator.

Ratio Decidendi: The court ruled that the disputes under the agreements necessitate arbitration and appointed a sole Arbitrator to adjudicate, emphasizing the parties' agreement on arbitration clauses.

Result: Petition allowed; sole Arbitrator appointed.

Table of Content
1. applications processed and order concluded. (Para 1 , 4 , 5 , 6 , 21 , 22)
2. appointment and procedures for arbitrator established. (Para 2 , 17 , 18 , 19 , 20)
3. dispute resolution agreement accepted. (Para 3 , 15 , 16)
4. arbitration agreements defined and invoked. (Para 7 , 8 , 9 , 10 , 11 , 12 , 13 , 14)

JUDGMENT (Oral)

I.A. 9063/2021 (u/O. 1 R. 10 r/w S. 151 CPC)

I.A. 9061/2021 (u/O. 1 R. 10 r/w S. 151 CPC)

1. The present applications have been filed by the applicants/respondent Nos.6 and 7, respectively, seeking striking off their names from the array of the parties.

2. Notice issued.

3. Learned counsel for petitioners accepts notice and submits that he has no objection if the present applications are allowed.

4. Accordingly, the present applications are allowed and respondent Nos.6 and 7 are deleted from the array of the parties.

5. Petitioner is directed to file amended memo of parties within three days.

6. Accordingly, the present applications stand disposed of.

ARB.P. 506/2021

7. The present petition has been filed under Section 11(6) (A) of the Arbitration and Conciliation Act, 1996 seeking appointment of sole Arbitrator to adjudicate the disputes inter-se b/w the parties.

8. As per the averments made in the present petition, petitioner is a company engaged in the business of paper and paper products. Respondent No. 1 is a partnership firm formed vide partnership deed dated 08.10.2018. Respondent Nos.2 and 3 are involved in the business of paper and paper products. The Respondent No. 4 & 5 are companies run and managed by the partners of respondent No.1 having same office address and operated with the same set of management.

9. It is further averred in the present petition that respondent No.1 through respondent Nos.2 & 3, approached the petitioner for the purpose of processing the raw materials thereby manufacturing of paper and paper products from the paper mill of the petitioner on the terms and conditions set out in agreements signed between petitioner and respondents. On 11.10.2018, the petitioner and respondents executed a Job Work agreement. Parties also entered into another Agreement, i.e. Improvement Plan Agreement, on the same date. Petitioner also entered into two more separate agreements with respondent No.4 and respondent No.5, i.e. Project Management Agreement and Agreement for Sale Purchase of Paper and Paper Products, respectively. Petitioner and Respondents agreed on the terms set out in the respective agreements for further smooth conduct of their businesses.

10. It is further averred that in the agreements dated 11.10.2018, it is abundantly clear that in the event of any default/breach of terms and conditions under the agreements, the respondents shall indemnify the petitioner.

11. Further, all the four agreement dated 11.10.2018 executed between the parties abovementioned separately prescribed at Clause 17.1 & 17.2 in the Agreement for Job Work, Clause 10.1 & 10.2 in the Improvement Plan Agreement, Clause 15.1 & 15.2 of the Project management Agreement and Clause 15.1 & 15.2 of the Agreement for Sale Purchase of Paper and Paper Products that in the event of any dispute of whatsoever nature is incapable of being resolved amongst the parties amicably then and in that event the parties have agreed to refer all dispute to the sole Arbitrator.

12. Further, petitioner approached the respondent Nos. 1, 2 & 3 vide notice dated 03.06.2020 subjected: "Demand letter cum notice of Invocation of Termination for material default in payments of commitment charges and other payables taxes as stipulated under the agreement for Job work dated 11.10.2018."

13. Respondents and the Petitioner had discussions on several occasions to resolve the dispute between them and on 05.10.2020, respondent No.3 in the capacity of Partner/Managing Director of respondents/institutions had ensured and undertaken the modalities to resolve the dispute/claim against each other however, no step

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