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IN THE HIGH COURT OF DELHI
V. Kameswar Rao, J.
Oyo Hotels and Homes Pvt. Ltd. - Appellant
Versus
Agarwal Packers and Movers Limited - Respondent
Arb.P. 1010 of 2021
Decided On : 01-09-2022




The limited scope of judicial review under Section 11 of the Arbitration and Conciliation Act 1996 confirms that existence of an arbitration agreement alone is examined, without delving into the merits of the underlying disputes.

Headnote:(A) Arbitration and Conciliation Act, 1996 - Section 11(6) and Section 11(8) - Petition filed for appointment of Sole Arbitrator due to disputes under Service Agreement dated June 26, 2020 - The petitioner alleged breach of agreement, resulting in missing inventory worth Rs.2,29,00,000 - Respondent argued no services rendered post-Agreement's effective date of July 1, 2020, and that disputes regarding past services are non-arbitrable. (Paras 45-68)

(B) Legal Principles - The court emphasized the scope of review under Section 11 is limited to the existence of an arbitration agreement and does not extend to resolve underlying disputes. (Para 48)

(C) Findings - The court appointed a retired Judge as a Sole Arbitrator whilst confirming that both parties' legal claims concerning the loss and subsequent allegations remain open for determination by the Arbitrator. (Paras 67-70)

Table of Content
1. factual background of the case. (Para 1 , 2 , 3 , 4 , 5)
2. arguments of the petitioner regarding contract violation. (Para 6 , 7 , 8 , 9 , 10 , 11 , 12 , 13 , 14 , 15 , 16 , 17 , 18)
3. court observations on arbitration agreement and its implications. (Para 19 , 20 , 21 , 22 , 23 , 24 , 25 , 26 , 27 , 28 , 29 , 30 , 31 , 32 , 33 , 34)
4. ratio decidendi regarding arbitration and claims. (Para 35 , 36 , 37 , 38 , 39 , 40 , 41 , 42 , 43 , 44 , 45 , 46 , 47 , 48)
5. final conclusion and order of the court. (Para 53 , 54 , 55 , 56 , 57 , 58 , 59 , 60 , 61 , 62 , 63 , 64 , 67 , 68 , 69 , 70)

JUDGMENT

V. Kameswar Rao, J. This petition has been filed under Section 11(6) and Section 11(8) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as `A&C Act, 1996.) with the following prayers:

    "In view of the above submissions, the petitioner humbly prays before this Hon'ble Court that this Hon'ble Court be pleased to-

    i. Appoint a Sole Arbitrator for adjudication of disputes/claims between the Petitioner and the Respondent arising out of the Services Agreement and/or;

    ii. Pass any such orders that this Hon'ble Court may deem fir and proper in the facts and circumstances of the present case."

2. It is a case wherein the petitioner is a company registered under the Companies Act of 1956 which holds a long-standing business in the managing hospitality sector. It is submitted that with the investment of considerable time and monies, the petitioner has developed a unique and distinctive system to provide high quality accommodation services.

3. The respondent is a private limited company involved in the business of providing material transportation, warehousing and logistics movements.

4. It is submitted that in the year 2020, respondent approached the petitioner representing that it has the requisite expertise, experience, and resources to provide services like dismantling, material packing, transportation and warehouse storage. Thereafter, based on the respondent's representation a Service Agreement (herein referred as "Agreement") dated June 26, 2020, was entered into by parties, i.e., petitioner and respondent.

5. As per the Service Agreement dated June 26, 2020, the respondent was to perform certain "services". As per the Agreement, the services were in relation to end-to-end dismantling, packing and transportation of materials from identified OYO branded hotel properties located at various locations across India and storing them in the respondent's warehouses. Further, the Agreement stated the obligations of the respondent to include transportation and storage of the goods/inventory of the petitioner at the respondent's warehouses and thereafter raising invoices on the petitioner in relation thereto. At the time when the Agreement commenced, the respondent picked up goods of the petitioner and stored the same in its warehouses located at various locations in different cities. Consequently, emails dated July 11, 2020 and August 22, 2020 sent by the respondent confirmed the quantities of the material so picked.

6. Mr. Prashanto Chandra Sen, the learned Senior Counsel appearing for the petitioner stated that the petitioner is aggrieved by the failure of performance of the Agreement dated June 26, 2020, by the respondent. The respondent failed to comply with Clause 3.5 in Annexure I of the Agreement. The respondent under the said provision was obligated to keep written records and report the progress of the services. Furthermore, at the time of taking delivery of goods, the respondent was indebted to store them in accordance with the provisions of the Agreement dated June 26, 2020 as well as undertake all necessary documentation associated with it, like receipt, storage and handling as per the Agreement.

7. It is submitted that the respondent in violation of the terms of the Agreement dated June 26, 2020, had altered the inventory list of goods of the petitioner thereby showing a shortfall of goods

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