O R D E R

% 11.09.2024

1. This is a petition filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 (“Act of 1996”) seeking appointment of an Arbitrator to adjudicate the disputes between the parties.

2. The petitioner is a Multinational Corporation (MNC) engaged in the business of Information and Technology and software development. On 17.09.2020, the petitioner and the respondent executed a Software Development and Service Agreement (“Agreement”) wherein the petitioner was to provide its services for development of e-wallet platform and the respondent was to pay a sum of Rs. 2 crores plus GST.

3. As per the petitioner, the petitioner developed the software and raised invoices which the respondent failed to pay.

4. The petitioner filed a petition under section 9 of the Insolvency and Bankruptcy Code, 2016 before the NCLT seeking initiation of insolvency proceedings against the respondent. The NCLT vide Order dated 04.09.2023 dismissed the said petition on the ground that there were disputed questions. Against the said order, an appeal was filed before the NCLAT which was also dismissed on 10.01.2024.

5. Thereafter, the respondent invoked pre-litigation mediation under section 12A of the Commercial Courts Act, 2015 (“Act of 2015”) and Delhi High Court Mediation and Conciliation Centre appointed a Mediator to settle the matter. However, the matter was not settled.

Hence, the petitioner filed the present petition.

6. This Court vide Order dated 05.04.2024 issued notice to the respondent.

7. Mr Batra, learned Counsel appear for the respondent and has filed a reply wherein a preliminary objection has been taken with regard to the arbitration clause being vague and invalid.

8. Before going into the merits of the matter, it is pertinent to note that the petitioner in the present case has not invoked the arbitration clause by issuing notice under section 21 of the Act of 1996.

9. It is settled law that notice invoking arbitration under section 21 is a pre requisite condition before filing appointment petition under section 11 of Act of 1996. Reliance is placed on Alupro Building Systems Pvt. Ltd. v. Ozone Overseas Pvt. Ltd., 2017 SCC Online Del 7228, BSNL v. Nortel Networks (India) Private Limited, (2021) 5 SCC 738 and Arif Azim Co. Ltd. v. Aptech Ltd. (2024) 5 SCC 313. Recently this Court in Kotak Mahindra Prime Ltd. v. Manav Sethi, 2024 SCC OnLine Del 4819 has observed as under:-

“15. In any event, once the Supreme Court has spoken on the issue in Nortel Networks and Arif Azim Co. and this Court has also held likewise in Alupro Building Systems, there can be no dispute about the fact that a Section 11(6) petition is not maintainable unless it is preceded in the first instance by a Section 21 notice, followed by failure, on the part of the opposite party, to agree to the appointment of the suggested arbitrator.”

10. Hence, in view of the settled position of law, the present petition is liable to be dismissed on this ground alone. However, I am proceeding to decide the objection taken by the respondent also.

11. Clause 3.4 of the Agreement reads as under:-

“3.4 Disputes. In case of any issue in the Services provided or error in the amount raised in the invoice, PAYMONK shall bring the same to the notice of the Service Provider within 15 (Fifteen) Business Days of receipt of the invoice (“Disputed Service Fees”). Both Parties shall then provide the other with such necessary information to enable them to reconcile the issues and upon amicable settlement, PAYMONK shall make payment towards the said disputed invoice within 5 (Five) Business Days thereafter (“Agreed Due Date”). In the event that a dispute in relation to the Disputed Service Fees has not been settled within 21 (Twenty One) days of the Service Provider being notified about the Disputed Service Fees by PAYMONK, the parties shall refer such disputes to Arbitration in compliance with Clause 16 of this Agreement. Notwithstanding the above, PAYMONK shall however make payment