The court emphasized the necessity of a valid arbitration agreement and the authority to appoint an arbitrator under specified circumstances.

ORDER

Petitioner has approached this Court seeking appointment of a sole Arbitrator to adjudicate the disputes and differences between it and the respondent arising from Annexure A1 agreement dated 7.5.2022.

2. According to the petitioner, it is a limited liability partnership firm engaged in the business of management of municipal solid waste. It was awarded with a contract by the respondent for rehabilitation of municipal solid waste dumpsite at Chelora. The agreement was executed for a period of one year. Subsequently, the tenure was extended twice. A sum of Rs.23,77,383/- was deposited as security deposit.

3. Petitioner alleges that there was delay in handing over the project site and consequently the commencement of the work was delayed. Likewise, there was delay in providing electricity connection at the site. Disputes arose between the parties regarding the quantity of waste processed. According to the petitioner, it had processed approximately 1,07,612 cubic metres of legacy waste and submitted bills. Various invoices were raised during the period from 15.10.2022 to 30.4.2023.

The total amount due under the invoices is Rs.4,25,28,915/-.

4. There were several communications between the parties. However, the disputes only escalated. On 29.5.2024, a letter was issued by the respondent asserting that obtaining consent from the Pollution Control Board was required for renewal of the contract. The same was also ensured by the petitioner. However, by an email dated 19.03.2025, a letter dated 13.03.2025 was forwarded conveying approval for extension of the contract, subject to the condition that the petitioner shall furnish a performance guarantee of Rs.3,73,72,327/- within seven days. Petitioner sent a detailed reply pointing out that obligation of performance guarantee as a condition for renewal was not supported by the provisions of the contract. Further the petitioner sought permission to withdraw the hired machinery deployed at the site.

5. It is pointed out that there is serious dispute regarding the quantum of work carried out by the petitioner. Petitioner submits that an excavator and tipper are still detained in the work site by the respondent. Finally, the petitioner issued Annexure-A2 notice dated 15.4.2025 invoking the arbitration clause. As there was no response from the respondent this Arbitration Request was filed.

6. An application under Section 9 of the Arbitration and Conciliation Act was filed by the petitioner before the District Court. The order passed by the District Court in favour of the petitioner was challenged by the respondent in Arb.Appeal No.26 of 2025. This Court disposed the appeal by setting aside the order passed by the District Court, as the proper forum was the Commercial Court.

7. In this Arbitration Request, the respondent filed a counter affidavit. The prime contention in the counter affidavit is that the petitioner is not a party to Annexure-A1 agreement and therefore it cannot invoke proceedings under the Arbitration and Conciliation Act against the respondent. It is contended that the agreement was executed by a company set up under the Companies Act, 2013. However, the Arbitration Request has been filed by Royal Westn Projects LLP, a partnership firm. Hence, the respondent contends that the petitioner is neither a signatory nor a party to Annexure-A1 agreement and therefore it cannot seek appointment of an Arbitrator by approaching this Court.

8. Heard the learned counsel for the petitioner and the learned Standing Counsel for the respondent Municipal Corporation elaborately. Though both of