ARB. P. 839/2021

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IN THE HIGH COURT OF DELHI AT NEW DELHI

Date of Decision: 9^thDecember, 2021

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ARB.P. 839/2021

SHIVAKRITI AGRO (P) LTD.

..... Petitioner

Through:

Mr. Sandeep Sethi and Mr. Jayant

Mehta, Senior Advocates with Mr.

Lalit Gupta, Mr. Siddharth Arora,

Advocates.

versus

UMAIZA INFRACON LLP & ORS.

..... Respondents

Through:

Mr. O.P. Gaggar, Advocate for R-1

and 3.

Mr.

Arun

Aggarwal

and

Mr.

Abhishek K. Singh, Advocates for R-

4.

CORAM:

HON'BLE MR. JUSTICE SANJEEV NARULA

JUDGMENT

[VIA HYBRID MODE]

SANJEEV NARULA, J. (Oral):

1.

The present petition under Section 11 of the Arbitration and

Conciliation Act, 1996 [hereinafter “the Act”] seeks appointment of a Sole

Arbitrator for adjudication of disputes pertaining to the Facility Agreement

dated 30^thSeptember, 2019 which contains an arbitration clause, produced

hereunder:

“Article 6 – Dispute Resolution and Jurisdiction

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in accordance with the Arbitration and Conciliation Act, 1996 (“Arbitration

Act”) to be conducted by a sole Arbitrator to be nominated by Shivakirti.

Factual Background:

2.

The facts relevant for decision on the instant application are as

follows:

(i)

Respondent No. 1 (viz. Umaiza Infracon LLP) is an LLP wherein

Respondent No. 2 (viz. Mr. Ajay Yadav) and Respondent No. 3 (viz.

Ms. Lata Yadav) are partners.

(ii)

Earlier, Corporate Insolvency Resolution Proceedings [“CIRP”]

pertaining to Respondent No. 4 (viz. M/s. Sunstar Overseas Limited)

were

pending

before

the

National

Company

Law

Tribunal.

Respondent No. 1 filed a Resolution Plan in the said proceedings,

which was approved by NCLT on 12^thSeptember, 2020. In order to

discharge their obligations under the Resolution Plan, Respondents

No. 1 to 3 approached the Petitioner seeking financial assistance. A

Facility Agreement dated 30^thSeptember, 2019, was executed,

whereunder, financial assistance to the tune of Rs. 130 crores was

extended by the Petitioner to Respondent No. 1, which was then

utilized for making payments to the creditors of Respondent No. 4.

(iii)

Later in February 2020, additional facility amount of 16 crores was

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disbursed, and thus a total amount of Rs. 146 crores presently stand

paid to Respondent No. 1.

(iv)

Now, the IBC proceedings against the Respondent No. 4 stand

concluded and the entire shareholding of Respondent No. 4 stands

transferred to Respondent No. 1.

(v)

The Petitioner came to know that Respondents had breached their

obligations under the Facility Agreement by attempting to create

charge/ encumbrances over their assets in violation of several clauses

of the Facility Agreement. In these circumstances, they approached

this court under section 9 of the Act [in OMP (I) (COMM.) No.

180/2021], wherein an interim order was passed in favour of the

Petitioner which is continuing till date.

(vi)

Since disputes had arisen due to non-payment of dues and breaches of

the Facility Agreement, Petitioner vide notice dated 12^thJune, 2021

requested Respondents to agree for arbitration. The request was

declined.

(vii)

In the above background, Petitioner seeks reference of disputes

between itself and Respondents No. 1 to 4 to arbitration.

OBJECTIONS OF RESPONDENTS NO. 1 AND 3:

3.

Mr. O.P. Gaggar, counsel for Respondents No. 1 and 3 makes the

following objections: -

(i)

Respondent No. 3 [viz. Mrs. Lata Yadav], who held 99% shares of

Respondent No. 1 [viz. Umaiza Infracon LLP] at the relevant time, is

not a signatory to the agreement in spite of her name being mentioned

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as a party to the Facility Agreement, and therefore, the same is not

binding on her either.

(ii)

Respondent No. 1 is governed by the document of incorporation,

which as per the Limited Liability Partnership Act, 2008 [hereinafter

“LLP Act”] is the sole source of authority for the LLP. It is governed

by the terms of its Incorporation Agreement dated 21^stFebr