JUDGMENT :

(Prayer: This Petition has been filed under Sections 11(5) and 11(6) of the Arbitration and Conciliation Act 1996 praying to appoint an Arbitrator to adjudicate the disputes between the petitioner and the respondents in terms of Clause 15 of the Facility Agreement dated 29.03.2019.)

1. A lender, Northern ARC Capital Limited, has filed this petition against the borrower, Feedback Infra Private Limited, and the guarantor, Mission Holdings Private Limited, for the appointment of a sole arbitrator.

2. The borrower, who is the first Respondent herein, approached the Petitioner seeking loan facilities. Thereafter, the Petitioner and the first Respondent entered into a Facility Agreement dated 29.03.2019(the FA) by which the Petitioner agreed to extend a loan of Rs.2,50,00,000/- to the first Respondent. Such loan was repayable with interest thereon at 13% per annum in 24 equated monthly installments. The FA admittedly contains an arbitration clause in Clause 15 thereof. In connection with the grant of loan facilities, several other documents and agreements were executed contemporaneously. These documents or agreements included a deed of hypothecation, demand promissory note, special power of attorney, deed of guarantee, facility letter, etc. Of particular relevance to this case is the Deed of Guarantee dated 29.03.2019 (the Guarantee Deed), which was executed by the second Respondent in favour of the Petitioner. The Guarantee Deed, which is both unconditional and irrevocable, does not contain an arbitration clause.

3. On 08.12.2020, the Petitioner issued a loan recall notice on the ground that the first Respondent had failed to discharge its obligations under the FA. Upon issuance of the loan recall notice, the entire amount due and payable under the FA became repayable immediately. On the same date, the Petitioner also issued a notice to the second Respondent under the Guarantee Deed calling upon the second Respondent to pay a sum of Rs.1,74,53,291/- by 14.12.2020. Since payments were not made either by the borrower or the guarantor, a dispute arose. The Petitioner issued a notice under Section 21 of the Arbitration and Conciliation Act, 1996 (the Arbitration Act) on 11.05.2021 and proposed the name of a sole arbitrator. In spite of receipt of such notice, the Respondents did not accept the person proposed by the Petitioner. The present petition is filed in the above facts and circumstances.

4. The Petitioner contended that the FA is the mother agreement and that the other documents executed contemporaneously therewith are ancillary thereto. Therefore, it is contended that these documents are closely inter-connected and constitute an integrated whole. The second contention of the Petitioner is that the arbitration clause in the FA is wide and, therefore, any dispute arising out of the Guarantee Deed is also within the scope of the said arbitration clause. The third contention of the Petitioner is that the signatory to the FA on behalf of the first Respondent was also the signatory to the Guarantee Deed on behalf of the second Respondent. This underscores the inter-connected nature of the parties. The last contention of the Petitioner was that the second Respondent is the the largest shareholder of the first Respondent as evidenced by the list of shareholders of the first Respondent as on 31.03.2020. In specific, the Petitioner pointed out that the second Respondent holds 67,34,500 shares in the first Respondent aggregating to 41.16% of the total paid-up share capital. Thus, according to the Petitioner, the first and second Respondents are definitely companies constituting a group of companies. Keeping in mind the inter-connected nature of the FA and the Guarantee Deed and the fact that both the Respondents are part of a group of companies with the second Respondent being effectively in control of the first Respondent, the dispute between the Petitioner, on the one hand, and the two Respondents, on the other, may be referred to