The court confirmed that a prima facie arbitration agreement exists under Section 11(6) of the Arbitration and Conciliation Act, limiting judicial scrutiny to the agreement's existence, deferring substantive issues to arbitral proceedings.

JUDGMENT :

HARISH VAIDYANATHAN SHANKAR, J.

1. The present Petition, under Section 11 (6) of theArbitration and Conciliation Act, 1996, Act, has been filed seeking the appointment of a sole Arbitrator for the purpose of adjudication of disputes stated to have arisen between the parties in relation to theFacilities Agreement dated 21.02.2022, [Agreements].

2. As stated in the Petition, in or around March 2022, the Respondent Company was engaged in the business of manufacturing and trading aluminium hot rolled products, aluminium cold rolled products and aluminium sheets, foils, etc. It is further stated in the Petition that the Petitioners had, from time to time, granted credit facilities/unsecured loans for the purpose of the Respondent Company's capital expenditure and general corporate expenses.

3. Thereafter, a Tripartite Share Purchase Agreement dated 03.02.2022, Share purchase agreement was entered into between the erstwhile shareholders, Respondent and one OMAT Business Pvt. Ltd., which is the fully-owned subsidiary of OFB Tech Pvt. Ltd.

4. Consequently, in order to discharge the liabilities of the Respondent Company under the credit facilities/unsecured loans granted by the Petitioners, OFB Tech Pvt. drafted and shared a Facilities Agreement vide email dated 07.02.2022.

5. It is further stated in the Petition that loans were also granted by the erstwhile shareholders of the Respondent Company, and in view thereof, two Facilities Agreements were drafted by OFB Tech Pvt. Ltd., being “Project Laxmi-USL (Shareholders as Lenders)” and “Project Laxmi-USL (Non-shareholders as Lenders)”.

6. It is stated that the Facilities Agreement in the present case, being Project Laxmi- USL (Non-Shareholder as Lenders), was duly executed by the Petitioners and delivered to the Respondent and to its parent company, OFB Tech Pvt. Ltd., on 21.02.2022.

7. It is stated in the Petition that the Agreement envisaged the Arbitration Clause being Clause 7.7, which reads as under :

“7.7 Arbitration

7.7.1. If any dispute arises amongst the Parties in relation to or in connection with this Agreement (including in respect of the validity, interpretation, implementation or alleged breach of any provision of this Agreement) (a “Dispute”), the Parties shall attempt to resolve such Dispute amicably through discussions amongst the senior executives of the Parties.

7.7.2. Arbitration. In the case of failure by the Parties to resolve the Dispute in the manner set out in Clause 7.7.1 above within 30 (thirty) days from the date when the Dispute arise, the Dispute shall be finally settled by arbitration in accordance with the Arbitration and Conciliation Act, 1996. All arbitration proceedings shall be conducted in the English language. The seat and venue of arbitration will be Delhi.

7.7.3. Each Party shall appoint 1 (one) arbitrator each, and the 3^rd (third) arbitrator shall be appointed by the 2 (two) arbitrators so appointed (the “Arbitration Tribunal”).

7.7.4. Enforcement. The arbitral award(s) rendered by the Arbitration Tribunal shall be made in writing and shall be final and binding upon the Parties and shall set out the reasons for the Arbitration Tribunal's decision.”

8. It is further stated that upon the culmination of the Facilities Agreement, a total principal amount of Rs. 24,69,134/- came to be the amount repayable by the Respondent Company to the Petitioners.

9. Upon the failure of the Respondent Company to discharge its liability and repay the aforenoted amounts, the Petitioners issued legal notices dated 20.07.2022 and 26.07.2022 demandi