The main legal point established is that the present dispute arising from the loan agreement is arbitrable in accordance with Clause 17 of the agreement, despite the attachment of properties under the TNPID Act.

JUDGMENT

(Prayer: Arbitration Original Petition filed under Section 11(5) of the Arbitration and Conciliation Act, 1996 to appoint an Arbitrator to adjudicate the disputes between the petitioner and the respondent in terms of the Arbitration agreement dated 19.01.2013 and to direct the respondent to pay costs.)

1. This Arbitration Original Petition has been filed under Section 11(5) of the Arbitration and Conciliation Act, 1996, (hereinafter called as “the Act”) to appoint an Arbitrator to adjudicate the disputes between the petitioner and the respondent in terms of the Arbitration agreement dated 19.01.2013 and to direct the respondent to pay costs.

2. The learned counsel for the petitioner would submit that the petitioner had lent money by virtue of the loan agreement dated 19.01.2013 for a sum of Rs.15,00,000/- with interest at the rate of 28.44% per annum to the respondent. Apart from the loan agreement, the respondent had also executed a Demand Promissory Note dated 19.01.2013 to the petitioner. However, the respondents had failed to return the said amount as agreed by him in terms of the loan agreement. Hence, the petitioner invoked Clause 17 of the said loan agreement and referred the dispute to the arbitration. The Clause 17 of the said loan agreement reads as follows: “Clause 17:- Arbitration and Disputes settlement

a) All disputes differences and/or claims arising out of this agreement whether during its subsistence or thereafter, shall be settled by Arbitrator in accordance with the provisions of the Arbitration and Conciliation Act 1996 or any other statutory modification earlier or reenactment for the time being in force and shall be conducted by a Sole Arbitrator to be appointed by the Lender under the provisions of the Arbitration and Conciliation Act 1996. The applicable law shall be Indian Laws. In the event of incapacity or resignation or death of the Sole Arbitrator so appointed the Lender shall be entitled to appoint another Arbitrator in the place of the earlier Arbitrator and the proceedings shall continue from the stage at which the predecessor had left. b) The award given such an Arbitrator shall be final and binding on parties to this agreement. The costs of the arbitration shall be borne with by the party/parties in accordance with award passed by the Arbitrator.

c) The Venue of the arbitration shall be as specified in schedule (1) hereto and the proceedings shall be conducted in accordance with the award passed by the arbitrator.”

3. After initiating the arbitration proceedings in ACP.No.101 of 2014, the award was passed by the learned Arbitrator on 29.12.2014. The same was challenged by the respondents herein in O.P.No.53 of 2022 before this Court. The said award was set aside by this Court vide order dated 08.09.2021 granting liberty to the petitioner to initiate a fresh arbitration proceedings. Accordingly, the petitioner had issued a notice to the respondents under Section 21 of the Act on 11.04.2022 appointed a sole Arbitrator and a claim statement was also filed before him on 10.05.2022. The learned Arbitrator had also issued a notice to the respondents with regard to the hearing on 13.05.2022. The first respondent filed a memo before the learned Arbitrator on 27.05.2022 stating that since the appointment of Arbitrator was made unilaterally, the said appointment is non-est in law and the same is against the law laid down by the Hon''ble Apex Court in Perkins Eastman Architects DPC Vs. HSCC (India) Ltd., reported in 2019 SCC OnLine SC 1517.

4. Under these circumstances, on 13.06.2022, the Arbitrator conducted the arbitration proceedings and at that point of time, the petitioner expressed his intention to file a petition under Section 11 of the Act before the High Court of Judicature at Madras and requests the Tribunal to adjourn the case for a month and thereafter, the petitioner filed the present petit