THE HON’BLE SRI JUSTICE K. LAKSHMAN ARBITRATION APPLICATION No. 297 of 2024

ORDER:

Heard Sri N. Bhaskar Rao, learned counsel for applicant and Sri K. Madhusudhan Reddy, learned counsel appearing for respondent No.1 and Ms. Vedula Chitralekha, learned counsel appearing for respondent Nos.2 to 5.

2. This application is filed under Section 11(5) & (6) of the Arbitration and Conciliation Act, 1996 (for short ‘the Act’), to appoint sole arbitrator for the purpose of adjudication of disputes between the applicant and the respondents.

3. According to the applicant, his father and he & respondent Nos.2 to 5 have entered into Development Agreement-cum-General Power of Attorney bearing document No.4712 of 2016 dated 03.03.2016 with regard to development of schedule property mentioned therein on the specific terms and conditions mentioned therein. In the said agreement, it is mentioned that father of the applicant was the absolute owner and possessor of the said property and the applicant and respondent Nos.2 to 5 are consenting parties. According to the applicant, after execution of the said agreement, his father passed away. Further, there are disputes between the applicant and the respondents with regard to execution of the said agreement and also development of the schedule property in terms of the agreement. The said disputes are arbitrable in nature. Therefore, the applicant got issued a notice dated 27.04.2024 to the respondents. He has also filed an application, A.O.P.No.71 of 2024, under Section 9 of the Act. As the respondents are not taking steps to resolve the disputes, he has filed the present Arbitration Application to appoint an arbitrator to adjudicate the said disputes.

4. Respondents filed counter opposing this application on the ground that the notice dated 27.04.2024 was not issued in terms of Section 21 of the Act; the said notice was not served on respondent Nos.2 to 5 and there are subsequent developments pursuant to the aforesaid agreement. Further, the applicant has entered into a Memorandum of Understanding (MoU) dated 31.12.2024 with respondent No.1. As per the said MoU, the applicant agreed to relinquish his rights and respondent No.1 agreed to pay an amount of Rs.7,35,00,000/- to the applicant. In Clause 9 of the said MoU, the applicant agreed to withdraw the present arbitration application.

Therefore, the respondents are opposing this application.

5. In the light of the above, it is relevant to note that Section 21 of the Act deals with commencement of arbitral proceedings. The same is relevant and is extracted below:

“21. Commencement of arbitral proceedings.

- Unless otherwise agreed by the parties, the arbitral proceedings in respect of a particular dispute commence on the date on which a request for that dispute to be referred to arbitration is received by the respondent.”

As per the above said provision, the arbitral proceedings commence on the date on which request for the dispute to be referred to arbitration is received by the respondent.

6. Vide notice dated 27.11.2024, the applicant demanded the respondents to cooperate with him for getting the subject agreement cancelled by way of execution of a registered cancellation deed. He has also requested the respondents to inform convenient date immediately after expiry of 90 days even for getting the subject agreement cancelled by way of execution of registered cancellation deed, failing which, legal proceedings would follow for securing the said relief and further, the respondents are held liable for all the consequences. However, there is no request from the applicant to refer the disputes to the arbitrator.

7. In view of the above, it is relevant to note that the scope and ambit of Section 21 of the Act fell for consideration in Kurnuda Sreenivasa Sasikanth v. M/s. Ananya Child Development and Early Intervention Clinic, 2004 Law Suit (TS) 453 wherein this Court categorically held that there should be specific request to refer the matter to the arbitrator. Mer