A binding arbitration agreement exists despite challenges to the validity of accompanying contracts, with disputes to be resolved by an appointed arbitrator.

JUDGMENT

Neena Bansal Krishna, J.

1. The present petition has been filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as `A&C Act, 1996') seeking appointment of an independent and impartial arbitrator for adjudication of disputes having arisen between the parties.

2. It is submitted that the respondent Nos. 1 and 2 are brothers and are in the business of share broking for the last 35 years. The respondent No. 3-M/s Action Financial Services India Limited is a Company registered under the provisions of Companies Act, 1956, having its registered office at 31, Rajgir Chambers, 4th Floor, 12/14, ShahidBhagat Singh Road, Fort, Mumbai and is listed with Bombay Stock Exchange through respondent No. 1-Director, vide Resolution of Board of Directors dated 13th March, 1995.

3. The petitioner and the respondents entered into a Memorandum of Understanding (hereinafter referred to as `MoU')dated 01st April, 2012 for the purpose of share broking business, wherein the respondent Nos. 1 and 2 agreed to take the petitioner as their business partner as per the terms and conditions enshrined in the MoU dated 01st April, 2012.

4. The petitioner decided to exit from the business partnership with the respondents and they entered into an Exit MoU dated 14th November, 2014, containing terms and conditions for the exit of the petitioner from the business. The respondents failed to comply with the Exit MoU dated 14th November, 2014 and also requested the petitioner not to initiate any legal action for recovery of the money and an addendum MoU dated 16th February, 2016 was executed between the parties, containing the terms and conditions for the exit of the petitioner. However, the respondents failed to abide by the Addendum Agreement as well and miserably failed to carry out their reciprocal obligations.

5. The petitioner sent a Letter dated 20th May, 2018 to the respondents, demanding her legitimate payments, but the respondents neither expedited nor made the payments and nor did they comply with the MoU dated 16th February, 2016. The respondents vide their Letter dated 07th June, 2018 denied the claims of the petitioner and failed to come forward to solve the disputes between the parties.

6. The disputes and differences have thus arisen between the parties. Clause 9 of the MoU provides for Arbitration for resolution of the disputes, which reads as under:

"Clause 9 -

This MoU shall be governed by or construed and enforced in accordance with laws of India. In case of any dispute with respect to any clause of this MoU, the matter will be referred to the joint arbitrators duly nominated each by the party of the third part and party of the first part and second part as per the provisions of Arbitration and Conciliation Act, 1996 and the jurisdiction of arbitration shall be in Delhi only."

7. Left with no option, the petitioner wrote a Letter dated 16th July, 2018 to the respondents for Invocation of Arbitration Clause and nominated Mr. Justice V.K. Shukla, former Judge of Allahabad High Court, as the Arbitrator in accordance with the terms and conditions enumerated in MoU dated 14th November, 2014 to adjudicate upon the claims of the petitioner. However, the respondents vide their Letter dated 06th August, 2018 refused to accept the Arbitrator nominated by the petitioner and also failed to honour the provisions of the A&C Act, 1996 for appointment of Arbitrator.

8. It is asserted that the petitioner tried to settle the disputes by way of nego