Arbitration agreements must be honored, and disputes arising from such contracts shall be referred to arbitration as stipulated.

ORAL ORDER

IN CMP No.505 of 2024:

1. The petitioner has filed this petition under Section 11 (6) of the Arbitration and Conciliation Act, 1996 (for short, ‘the Act’) for the appointment of an arbitrator to resolve the dispute between the parties to the petition in terms of Clause 22 of the Joint Development Agreement dated 02.07.2012, vide Annexure-A as per the provisions of the Act and the Rules.

2. Brief facts, leading rise to the filing of this Civil Miscellaneous Petition are as follows:

3. The petitioner and the respondents have entered into a Joint Development Agreement dated 02.07.2012, and the respondents also entrusted the work to the petitioner. Respondents committed a breach of terms and conditions of the Joint Development Agreement. The respondents are due to the petitioner an amount of Rs.5,69,58,201/-. The respondents did not clear the dues even after repeated demands. Clause 22 of the Agreement stipulates the arbitration clause in case of a dispute. The petitioner filed an application under Section 9 of the Act in Commercial Arbitration Application No.5 of 2024 before the Commercial Court, Bangalore Rural District, which is pending. The petitioner in terms of Clause 22 of the Joint Development Agreement issued a notice dated 23.08.2024 under Section 21 of the Act suggesting the name of an arbitrator. The respondents have not agreed to the name of arbitrator suggested by the petitioner vide reply dated 02.10.2024. Hence, this petition.

4. Learned counsel for the respondents submits no objections to allow the petition.

5. Perused the records, and considered the submissions of the learned counsel for the parties.

6. The point that would arise for consideration is as follows:

“Whether the petitioner has made out a ground to refer the dispute to the arbitrator in terms of Clause 22 of Joint Development Agreement, as per the provisions of the Act ?”

7. It is not in dispute that the petitioner and the respondents have entered into a joint development agreement dated 02.07.2012 and the respondents entrusted the work to the petitioner. There is a breach of terms and conditions on the part of the parties to the Joint Development Agreement.

8. The petitioner filed an application under Section 9 of the Act in Commercial Application No.5 of 2024 on the file of the Commercial Court, Bengaluru Rural District, which is pending.

9. There is an arbitration Clause at Clause 22 in the Joint Development Agreement dated 02.07.2012, and the same reads as follows:

“ 22) ARBITRATION

In the event of breach of the terms of this Agreement or in the event of any differences or disputes arising between the parties in regard to this Agreement or any matter relating thereto, the same shall be referred to and settled by Arbitration under the provisions of the Arbitration and Conciliation Act in force. The Arbitration venue shall be In Bangalore and the Arbitration proceeding shall be in English Language.”

10. From the perusal of the aforesaid arbitration clause, it is clear that if any dispute arises out of the terms and conditions of the Joint Development Agreement, the dispute shall be referred to and settled by an arbitration under the provisions of the Act.

11. By invoking the said arbitration clause, the petitioner issued an arbitration notice dated 23.08.2024 suggesting the name of Sri.D.Vishweshwara Bhat, retired District Judge as an arbitrator. The respondents replied vide reply dated 02.10.2024 to the arbitration notice and did not agree to the name proposed by the petitioner. Instead, the respondents proposed the name of Sri.Sudhakar P.Pandit, retired District Judge, as the sole arbitrator. The petitioner did not agree with the name