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IN THE HIGH COURT OF DELHI
V. Kameswar Rao, J.
Sequoia Fitness and Sports Technology Pvt. Ltd. - Appellant
Versus
GD Goenka Pvt. Ltd. - Respondent
Arb.P. 194 of 2022
Decided On : 31-10-2022




An enforceable arbitration agreement requires mutual consent evidenced by signed documents; mere communications cannot establish such consent.

Headnote:(A) Arbitration & Conciliation Act, 1996 - Section 11(6) - Appointment of Arbitrator - Petitioner filed for the appointment of an arbitrator to resolve disputes with respondents regarding a sports training program agreement, alleging non-payment of invoices - Respondents denied existence of an arbitration agreement, contending no signed document established mutual consent for arbitration - Court found no binding agreement as no document was executed between the parties - The petition was dismissed for lack of a valid arbitration agreement. (Paras 28, 44)

(B) Enforcement of Agreements - Agreement enforceability requires valid and legal contracts; mere communications do not suffice to demonstrate mutual consent. (Paras 32, 42)

Facts of the case:
The petitioner entered into discussions with the respondents regarding a sports training program that included an arbitration clause. Despite submitting proposals and invoices, the respondents failed to formalize the agreement or make payments for services rendered. Disputes arose leading to this petition for arbitration.

Findings of Court:
The court concluded that in the absence of a signed agreement, there was no enforceable arbitration agreement between the parties.

Issues: Whether the absence of a signed document negates the possibility of binding arbitration between the parties over payment disputes.

Ratio Decidendi: The court emphasized that enforceability of an arbitration agreement hinges on the existence of mutual consent, demonstrated through signed documents or clear mutual agreement, which was lacking in this case.

Result: Petition dismissed.

Table of Content
1. factual background of the parties and contract. (Para 2 , 3 , 4 , 5 , 6)
2. petitioner's arguments about service provision. (Para 7 , 8 , 9 , 10 , 11 , 12 , 13 , 14 , 15 , 16 , 17 , 18 , 19 , 20)
3. jurisdiction and maintainability of the suit. (Para 21 , 22 , 23)
4. respondents' counterarguments on agreement execution. (Para 25)
5. court’s analysis on arbitration agreement's validity. (Para 27 , 28 , 29 , 30 , 31 , 32 , 33 , 34 , 35 , 36 , 37 , 38 , 39 , 40 , 41 , 42 , 43)
6. conclusion dismissing the petition. (Para 44)

JUDGMENT

V. Kameswar Rao, J. At the outset, I may state, the learned counsel for the petitioner had on May 27, 2022, made a statement that he shall press this petition qua respondents 2 to 4 and not against respondent No.1. Hence, the present petition is being considered for appointment of sole Arbitrator qua respondents 2 to 4.

2. This is a petition filed under Section 11 (6) of the Arbitration & Conciliation Act, 1996 (for short, `A&C Act, 1996') with the following prayers:

    "Prayers:

    Therefore, based on the facts and the circumstances of the matter, it is most humbly and respectfully prayed that this Hon'ble Court may graciously be pleased to:

    1. Pass an order for appointing an independent and impartial Sole Arbitrator, to adjudicate upon the pending disputes between the Petitioner and the Respondent; and/or

    2. Pass and order directing the Respondent No. 1 to compensate the Petitioner for costs of this litigation; and/or

    3. Pass such further or other orders which this Hon'ble Court may deem fit in the light of the facts and circumstances of the case and in the interest of justice, equity, and good conscience."

3. In the present case Sequoia Fitness and Sports Technology Pvt. Ltd. (hereinafter referred to as `Petitioner') is a Company incorporated under the provisions of the Companies Act, 1956, having its registered office at 2216, D2 Vasant Kunj, New Delhi-110070 and principal office at 127, 1st Floor, Tower B3, SpazeITech Park, Sohna Road, Sector 49, Gurugram, Haryana-122018.

4. On the other hand, respondent No.1/(GD Goenka Pvt. Ltd.) is running schools in the name and style of GD Goenka International School at Naukuchiatal. Distt., Nainital/(respondent No. 2) and GD Goenka International School, Kashipur/(respondent No. 3). It is submitted that respondent No.1 is a private limited company incorporated under the relevant provisions of the erstwhile Companies Act, 1956, having its registered office at N-85, Connaught Place, New Delhi-110001.

5. According to the facts of this case, the petitioner emailed the profile of the Company to the respondents for entering into a sports training and coaching arrangement, called the `Fitness 365' (hereinafter referred to as `Program') for the students studying in the schools being operated by the respondent No.1 on November 05, 2018. Thereafter, several rounds of meetings were held between the petitioner and the respondent No.4 for conducting the program offered by the petitioner in the schools operated by respondent Nos.2 and 3. That apart, an In-person meeting was also held on November 24, 2018 between the respondents and the petitioner, AT Templeton Head Office, Nainital.

6. It is the case of the petitioner that it shared the copy of the proposal-cum-agreement for conducting the Program during the meeting dated March 16, 2019. The proposal contained exhaustive terms & conditions including arbitration clause clearly stipulating, referring of the disputes arising out of the proposal-cum-agreement to the Arbitral Tribunal consisting of a sole arbitrator.

SUBMISSIONS ON BEHALF THE PETITIONER

7. Mr. Himanshu Mahajan, the learned counsel for the petitioner submitted, the respondents had orally accepted the proposal and the terms & conditions stipulated thereof. On verbal assurances given by the respondents, the petitioner had posted one coach on April 13, 2019, with respondent No.3, and thereafter three more coaches on April 14, 2019. Consequently,

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