The unilateral appointment of an Arbitrator is invalid, and parties retain the right to seek an independent substitute Arbitrator for unresolved counter-claims following termination of arbitral proceedings.

JUDGMENT

Sanjeev Narula, J. (Oral)

I.A. No. 3810/2021 (seeking condonation of delay of 564 days in filing the present accompanying petition)

1. In light of the relaxation of limitation granted through several orders of the Supreme Court vide Suo Moto W.P. (C) 3/2020, Re: Cognizance for extension of limitation, and also for the grounds and reasons stated in the application, the delay of 564 days in filing the present petition, is condoned and the application is allowed.

2. The application stands disposed of.

O.M.P. (T) (COMM.) 31/2021

3. The Petitioner/counter-claimant could not file its counter-claims within the prescribed time during the course of the arbitral proceedings before the Sole Arbitrator - Hon'ble Ms. Justice Pratibha Rani (Retd.), former Judge of this Court, who was unilaterally appointed by the Respondent. With the Respondent deciding not to pursue its claims and inability of Petitioner to raise any counter-claim(s), the Arbitrator terminated the proceedings. In this in this background, Petitioner relying on the law as laid down in Perkins Eastman Architects DPC and Anr. v. HSCC (India) Ltd., 2019 SCC OnLine SC 1517 has preferred the present petition seeking appointment of an independent substitute Arbitrator, for adjudication of its counter-claims.

- Statutory provisions invoked - Section 14 r/w Section 15 of the Arbitration and Conciliation Act, 1996 [hereinafter "the Act"].

- Relevant Order of the Tribunal - Termination Order dated 22nd August, 2019 passed by the Sole Arbitrator [hereinafter "Termination Order"].

BRIEF FACTS

4. The facts necessary for deciding the present lis are set forth in seriatim as under:

4.1. Prime Interglobe Pvt. Ltd. [hereinafter "PIPL"] entered into 12 Franchise Agreements [hereinafter "FAs"] with Super Milk Products Pvt. Ltd. [hereinafter "SMPPL"]. In addition to FAs, parties also executed one `Master Franchise Agreement' dated 03rd October, 2016 [hereinafter "MFA"].

4.2. On 27th May, 2019, SMPPL terminated FAs which was objected to by PIPL leading to disputes between the parties. SMPPL invoked arbitration vide letter dated 06th June, 2019 and unilaterally appointed the Arbitrator.

4.3. In the first hearing before the Arbitrator on 12th June, 2019, SMPPL filed an application under Section 17 and PIPL filed an application under Section 16 of the Act. During the course of second hearing on 14th June, 2019, an offer was made by PIPL to comply with some of the prayers made in the application under Section 17. The same were accepted by SMPPL and the matter was listed for arguments on afore-noted applications. Vide communication dated 13th July, 2019 addressed to the Arbitrator, SMPPL sought extension of time for filing Statement of Claim [hereinafter "SOC"] which was allowed and the next date of hearing was fixed as 17th August, 2019.

4.4. In the meantime, on 27th July, 2019, SMPPL wrote a letter to the Arbitrator stating that it did not wish to file its SOC or pursue its monetary claim under the FAs and prayed that the Consent Order dated 14th June, 2019 passed in the application under Section 17 of the Act, be passed as a final award in favour of the Claimant. Relevant portion of the said correspondence reads as under:

"Against this background, we state, that the Claimant does not wish to further pursue its monetary claims under the 12 Franchise Agreements forming subject matter of the present arbitral proceedings and prays that the Consent Order dated 14 June 2019 be passed as a final award in favour of the Claimant in the Application under Section 17 of the Act.

All rights and contentions of the Claimant/our Client under the MFA including claims and dues are expressly reserved and nothing stated hereinabove shall be deemed to be an admission or waiver of claims on part of the C