Delhi High Court: In a petition filed by the petitioner seeking the constitution of an Arbitral Tribunal under the provision of Section 11 of the Arbitration and Conciliation Act, 1996 qua the dispute arising out of the agreement dated 26-08-2013 that was executed between the parties and vide which the petitioner was allocated a lockable unit Chandra Dhari Singh, J., directed Mrs. Madhurima Mridul, Advocate to be appointed as the sole arbitrator to adjudicate the disputes between the parties.
An agreement was executed between the petitioner and respondent according to which the petitioner was required to transfer ownership of a unit in return for payments. However, the respondent stopped making the assured return payments to the petitioner as agreed between them. Therefore, a legal notice was sent by the petitioner to which the respondent replied by putting the blame on the petitioner. Thus, the petitioner was constrained to invoke the arbitration clause i.e., clause 18.2 of the agreement.
Counsel for the petitioner submitted that as per clause 18.2 of the agreement, it has been decided mutually between the parties that any dispute arising out of the agreement would be adjudicated by way of arbitration in New Delhi and thus in the light of this clause, another clause 18.3 of the agreement is ambiguous with respect to the jurisdiction of the Gautam Buddha Nagar Courts, and thus, becomes invalid.
The Court noted that the law related to the jurisdiction of the court in the matters pertaining to arbitration is no longer res integra as all the matters arising out of an agreement/contract would be decided by the court in whose jurisdiction the seat of arbitration is decided.
The Court, on duly considering clauses 18.2 and 18.3 of the agreement, noted that the expression “in case of any disputes between the parties hereto (including their successors) concerning this agreement or matters arising therefrom, the same shall be adjudicated by way of arbitration……arbitration shall be at New Delhi” and that the parties while entering into agreement had an intent of resolving any dispute arising out of the agreement dated 26-08-2013 by way of Arbitration in New Delhi only.
Thus, the Court held that clause 18.2 shall have a prevailing effect over the latter clause 18.3 of the agreement with respect to the mode of dispute resolution and as the parties have agreed for the arbitration proceedings to take place in New Delhi which can be construed as the “seat” of the arbitration and therefore, this court has the jurisdiction to entertain the present petition.
The Court appointed Mrs. Madhurima Mridul, Advocate as the sole arbitrator to adjudicate the disputes between the parties and shall ensure the compliance of Section 12(1) of the Arbitration and Conciliation Act, 1996.
[Sunil Kumar Chandra v. Spire Techpark Private Limited, Arbitration Petition No. 1102 of 2022, decided on 18-01-2023]
Advocates who appeared in this case :
Mr. S. D. Singh, Mr. Kamla Prasad, Mr. Jitender Singh, Mr. Kartikay Bhargava and Mr. Siddharth Singh, Advocates for petitioner
Mr. S. D. Singh, Mr. Kamla Prasad, Mr. Jitender Singh, Mr. Kartikay Bhargava and Mr. Siddharth Singh, Advocates for respondents
*Arunima Bose, Editorial Assistant has reported this brief.