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2025 Supreme(Online)(DEL) 271
HIGH COURT OF DELHI
Subramonium Prasad, J
ASHISH KAPUR & ANR. – Appellant
Versus
DEEPAK SETH & ORS. – Respondent
ARB.P.-1524/2024
Dr. Amit George, Ms. Bhargavi Kannan, Ms. Shivani Karmakar, Ms. Kavya Sarin, Mr. Prithvi Rohan Kapur, Ms. Payal Chandra
The referral court's role under Section 11(6) of the Arbitration Act is limited to determining the prima facie existence of an arbitration agreement, deferring complex issues regarding non-signatories to the Arbitral Tribunal.
Headnote:(A) Arbitration and Conciliation Act, 1996 - Section 11(6) - Petition for appointment of an Arbitrator - Disputes arose from an Arbitration Agreement dated 08.04.2024 among the parties regarding various business ventures in the Food & Beverages Industry - The court emphasized that the referral court's role is limited to determining the prima facie existence of an arbitration agreement and should not interfere unnecessarily in arbitration proceedings. (Paras 1, 14, 20, 24)
(B) Non-signatories - The court noted that the issue of whether non-signatories can be parties to arbitration is settled law, allowing for their inclusion based on certain parameters established by the Supreme Court. (Paras 18, 26)
Facts of the case:
The petitioners sought the appointment of an Arbitrator to resolve disputes arising from various agreements related to their business ventures in the Food & Beverages sector, including partnerships and shareholder agreements. (Paras 2-10)
Findings of Court:
The court found that the existence of the Arbitration Agreement was not in dispute and that the referral court should not interfere with arbitration proceedings, leaving the determination of necessary parties to the Arbitral Tribunal. (Paras 24-27)
Issues: The main issues were whether the court should appoint an Arbitrator and whether non-signatories could be included in the arbitration proceedings. (Paras 14, 26)
Ratio Decidendi: The court ruled that the referral court's role is limited to assessing the existence of an arbitration agreement and should defer to the Arbitral Tribunal regarding the inclusion of non-signatories. (Paras 20, 24)
Result: Petition allowed.
JUDGMENT :
1. The present petition has been filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 by the Petitioners seeking appointment of an Arbitrator to adjudicate upon the disputes which have arisen between the parties under the Arbitration Agreement dated 08.04.2024. The Arbitration Agreement dated 08.04.2024 reads as under:
"ARBITRATION AGREEMENT
1. Certain disputes have arisen between Ashish Kapur, Meghana Kapur (wife of Ashish Kapur), Joydeep Singh, Terveeni Singh (wife of Joydeep Singh) and Deepak Seth (collectively referred to as 'Parties'), out of and on account of certain of the following contracts entered into between some or all of the Parties (collectively or individually referred to as 'Contract(s)'):
We, ASHISH KAPUR (family group represented by Ashish Kapur), JOY DEEP SINGH (family group represented by Joy Deep Singh) and DEEPAK SETH, hereby agree to finally settle these disputes through a process of arbitration by a Tribunal constituted by a sole retired high court judge, under the Indian Arbitration Act, 1996. The seat of arbitration shall be New Delhi and the laws of Union of India shall be applicable to the substance of the dispute. The language of arbitration shall be English. This Arbitration Agreement is made and entered into on 8 April, 2024."
2. Shorn of unnecessary details, the facts in brief leading to this petition are that the Petitioners ventured into the Food & Beverages Industry in India and established several brands including the QSR outlets of "Yo! China", "Dimsum Bros", and "The Bento Cafe", fine dining restaurants including "Kimono Club" in Delhi, "Whiskey Samba" and "The Wine Company" in Gurugram, "The Wine Rack" in Mumbai and "Antares" in Goa.
3. It is stated that a Partnership Deed in the year 2013 was entered into between the Respondent No.3 and one Ms. Shalini Saini for the purpose of running restaurants, food and beverages stores, food outlets etc. The business was being run under the style of “The Wine Company”. The Partnership Deed was called as “The Wine Connection Partnership Deed”. It is stated that the Respondent No.1 approached the Petitioners to invest in their existing and upcoming ventures and a series of Agreements came to be executed inter alia between the Petitioners and Respondents No.1 to 3. A Partnership Deed called the Super Bowl Company Partnership Deed dated 21.04.2015 was entered into between Petitioner No.2, Respondent No.1 and Respondent No.3 with the aim of creating a nationally and internationally recognized scalable high volume Chinese food court. Respondent No.5 i.e. M/s Super Bowl Company was constituted under this deed, which then established and operated a food chain called The Bento Cafe. It is stated that thereafter, on 29.09.2015, a shareholders Agreement was executed between the M/s Karma Kitchen & Bar Private Limited i.e. Respondent No.8 and Gokul Kumar, Varinder Sachdeva, Petitioner No.2, Respondent No.1, Respondent No.3 and one celebrity Chef Ms. Sarah Patricia Todd for the purpose of establishing restaurants in Goa and subsequently in different parts of India.
4. Respondent No.6 was a party under an Agreement namely White Hat Hospitality LLP Agreement dated 28.07.2016. The said Agreement was entered into by Petitioner No.2, Respondent No.1 and Respondent No.3 with the objective of running bars, and to take over Lux Dining business which was an older business run by the same partners. Respondent No.6 i.e. M/s White Hat Hospitality LLP came to be established and operate a wildly successful whisky bar, The Whisky Samba.
5. On 06.04.2018, a Wine Connection Compromise-cum-Settlement Agreement was entered into between Ms. Shalini Saini, Mr. Ajay Saini, Petitioner No.1, Petitioner No.2 and Respondent Nos.2 and 3 which then re- constituted the composition of Respondent No.4 i.e. M/S the Wine Connection. Under this Agreement, Ms. Shalini Saini would retire from Respondent No.4 i.e. M/S Wine Connection and Petitioner No.2 and Respondent No.1 wou
