Delhi District Court
Riya Gupa vs Nninjas Model Management Pvt Ltd on 3 May, 2025
IN THE COURT OF SH. PITAMBER DUTT :
DISTRICT JUDGE (COMMERCIAL COURT-01)
EAST DISTRICT KARKARDOOMA COURTS : DELHI
CS(Comm) No. 260/2024
Riya Gupta Vs Ninjas Model Management
ORDER:
1. Vide this order, I shall decide an application filed by the defendants under Section 8 of the Arbitration & Conciliation Act, 1996 Read with Order VII Rule 11 of CPC for dismissing the suit and referring the matter for Arbitration.
2. The defendants have averred in the application that they asked the plaintiff to enter into a contract with defendant no. 1 like they entered with other models and therefore, copy of an agreement was sent through email to the plaintiff for perusal and thereafter a contract was duly signed by the plaintiff and defendant no. 2 being the Director and AR of defendant no. 1 and hard copy of the same was supplied to the plaintiff. It is further averred that plaintiff has concealed the material fact that as per Clause 8 (d) of the contract dated 15.12.2021, entered into by plaintiff and defendant no. 1, any dispute arising out of remuneration, liquidated damages, definition, interpretation or any other dispute with regard to and in relation to this agreement including that of termination CS(Comm) 260/2024 Riya Gupta vs Ninja Model Management Page No.1 of 29 Digitally signed by Pitamber Pitamber Dutt Dutt Date:
2025.05.03 15:31:17 +0530 shall be referred to a sole and neutral arbitrator to be decided by the agency, whose decision shall be final and binding. It is further averred that the plaintiff though disputed the legal contract, however, plaintiff in her notice dated 02.05.2024, sent by her to defendant no. 1 through whatsapp to defendant no. 2 herself has unequivocally admitted the fact that she entered into a contract with defendants. It is further averred that as the contract entered into between plaintiff and defendant contains an arbitration clause, therefore, the suit filed by the plaintiff is barred under the Arbitration & Conciliation Act and the matter is required to be referred for Arbitration.
3. The plaintiff has filed reply, thereby controverted the averments made in the application. It is averred that the defendants have filed this application on the basis of fabricated agreement, which was never executed and plaintiff has strong apprehension that her digital signature has been misused by the defendants without her knowledge and consent. It is further averred that a five- judge bench of the Hon'ble Supreme Court of India in Central Organization for Railway Electrification Vs M/s ECI SPIC SMO MCML (JV), has held that arbitration clauses: (i) mandating one party to unilaterally appoint the sole arbitrator, or (ii) in case of a three-member panel, CS(Comm) 260/2024 Riya Gupta vs Ninja Model Management Page No.2 of 29 Digitally signed by Pitamber Pitamber Dutt Dutt Date:
2025.05.03 15:31:33 +0530 mandating one party to select its nominee from a panel of arbitrators curated by the other party, violate the principles of equality under the Arbitration and Conciliation Act, 1996. The Court also held that such unilateral appointment clauses in public-private contracts or public-sector undertaking (PSU) contracts vilate the fundamental right to equality before the law under Article 14 of the Constitution. This decision necessitates contractual parties in India to reassess their arbitration clauses. It is further averred that the plaintiff asked the defendants to enter into a legal contract multiple times before she started working with defendant no. 1 but defendants no. 2 and 3 kept on delaying it. It is further averred that defendant no. 2 asked the plaintiff to send her digital signature, which might have been misused by the defendant. It is further averred that the agreement produced by the defendants is not a valid contract as there are some extra paragraphs / contents have been added later on by the defendants with ill intention without the knowledge and consent of plaintiff. It is further averred that defendants knowingly and intentionally produced a false and fabricated contract dated 15.11.2021 along with the stamp paper of next month dated 15.12.2021 and the defendants misused the digital signature of plaintiff without her knowledge and consent. All other averments have been denied. It is CS(Comm) 260/2024 Riya Gupta vs Ninja Model Management Page No.3 of 29 Digitally signed by Pitamber Pitamber Dutt Dutt Date:
2025.05.03 15:31:42 +0530 prayed that application may be dismissed with heavy cost.
4. I have heard Ld. Counsel for applicant / defendants, Ld. Counsel for non-applicant / plaintiff and perused the application, its reply as well as contract entered into between plaintiff and defendants, qua their commercial relationship.
5. The defendants have filed this application under Section 8 of the Arbitration & Conciliation Act and claimed that there exist an Arbitration Clause in the Contract dated 15.11.2021, entered into between plaintiff and defendant, which consist an arbitration clause for referring the suit for arbitration as per Section 8 of the Arbitration & Conciliation Act, 1996.
6. Section 8 of the Arbitration and Conciliation Act, 1996 is reproduced as under for the sake of convenience:-
Section 8. Power to refer parties to arbitration where there is an arbitration agreement.
(1) A judicial authority, before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party to CS(Comm) 260/2024 Riya Gupta vs Ninja Model Management Page No.4 of 29 Digitally signed by Pitamber Pitamber Dutt Date: Dutt 2025.05.03 15:31:51 +0530 the arbitration agreement or any person claiming through or under him, so applies not later than the date of submitting his first statement on the substance of the dispute then, notwithstanding any judgment, decree or order of the Supreme Court or any Court, refer the parties to arbitration unless it finds that prima facie no valid arbitration agreement exists.
(2) The application referred to in sub-section (1) shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof:
[PROVIDED that where the original arbitration agreement or a certified copy thereof is not available with the party applying for reference to arbitration under sub-section (1), and the said agreement or certified copy is retained by the other party to that agreement, then, the party so applying shall file such application along with a copy of the arbitration agreement and a petition praying the Court to call upon the other party to produce the original arbitration agreement or its duly certified copy before that Court.] (3) Notwithstanding that an application has been made under sub-section (1) and that the issue is pending before the judicial authority, an CS(Comm) 260/2024 Riya Gupta vs Ninja Model Management Page No.5 of 29 Digitally signed by Pitamber Pitamber Dutt Dutt Date:
2025.05.03 15:32:00 +0530 arbitration may be commenced or continued and an arbitral award made.
7. A perusal of Section 8 of the Act, shows that it mandates that a Judicial Authority, before whom a suit has been filed, with respect to the dispute, subject matter of the arbitration agreement, must refer the matter to the Arbitration on fulfillment of the conditions mentioned therein i.e. the party is required to apply not later than submitting first statement on the substance of the dispute and for that purpose, an application is required to be filed accompanied by the original arbitration agreement or duly certified copy thereof.
8. The defendants have filed this application before filing their written statement, therefore, defendants have exercised their right at the earliest as per the law.
9. The plaintiff has filed the present suit for seeking recovery of Rs.13,58,540/- along with pendente lite and future interest against the defendants. As per the averments, the defendants have availed the service of plaintiff as a model: That the plaintiff insisted for execution of a formal contract for which defendant no. 2 asked the plaintiff to send her digital signatures. The plaintiff has also claimed that the copy of agreement was CS(Comm) 260/2024 Riya Gupta vs Ninja Model Management Page No.6 of 29 Digitally signed Pitamber by Pitamber Dutt Dutt Date: 2025.05.03 15:32:08 +0530 sent to defendant no. 2 by the plaintiff without the signatures of defendants no. 2 and 3 and last page of the said agreement only had digital signatures of plaintiff, which defendant pasted without the consent of the plaintiff.
10. A perusal of the plaint and documents filed by plaintiff shows that plaintiff started working as model with the defendant and performed various assignments on behalf of defendants. The plaintiff though insisted for execution of formal agreement but same was never executed. The plaintiff has thus not made any reference of the contract dated 15.11.2021, relied upon by the defendant for referring of dispute for arbitration.
11. The defendants have claimed that plaintiff has deliberately concealed the fact regarding her admission qua execution of contract, which she made in her notice dated 02.05.2023, sent by the plaintiff to defendant no. 2 through whats app.
12. The plaintiff has not disputed that she sent legal notice dated 02.05.2024 to the defendants, copy of which has been placed on record by the defendants along with their documents.
13. A perusal of notice dated 02.05.2024 shows that CS(Comm) 260/2024 Riya Gupta vs Ninja Model Management Page No.7 of 29 Digitally signed by Pitamber Pitamber Dutt Dutt Date:
2025.05.03 15:32:15 +0530 plaintiff herself has mentioned in para 3 of the notice that she entered into the contract on 13.09.2021. As per Clause 6 of the said contract, the commission structure mentioned in the contract was 60% of the gross assignment fees for the model, 30% of the gross assignment fees for the agency and 10% of the gross assignment fees for the mother agency / TDS. The said commission structure is mentioned in the contract.
14. The plaintiff has thus admitted in her legal notice dated 02.05.2024 that a contract for service was entered into between her and defendants, though she has given the date of contract as 13.09.2021 whereas the date of contract is 15.11.2021. Clause 6, reproduced by the plaintiff in her legal notice is the reproduction of clause 6 of agreement dated 15.11.2021, which bears signature of plaintiff in the physical form with date 15.12.2021. The original of said legal contract has been produced by the defendants for inspection.
15. The plaintiff has averred in the plaint as well as in her reply to this application that the defendants have taken her digital signatures, which appears to have been misused by the defendant by affixing on the agreement. However, a perusal of original agreement shows that this agreement bears physical signatures of the plaintiff and CS(Comm) 260/2024 Riya Gupta vs Ninja Model Management Page No.8 of 29 Digitally signed by Pitamber Pitamber Dutt Dutt Date:
2025.05.03 15:32:21 +0530 not her digital signatures.
16. The plaintiff who appeared before the Court on 28.03.2025, stated before the Court that copy of agreement was sent by the defendant to her for her perusal through email, on which plaintiff put her signatures by affixing photograph of her signature.
17. Thus, as per the plaintiff herself, she transposed her signatures over the copy of agreement sent to her by the defendants on her email, on her own and had not affixed her digital signatures over the same. However in the plaint as well as in her reply to this application, the plaintiff has stated that her digital signatures have been misused by the defendants, which is incorrect.
18. The contract dated 15.11.2021, which was signed by the plaintiff on 15.12.2021 does not bear the digital signature of the plaintiff but bears signature in physical form.
19. The plaintiff though denied her signature over the contract. However, signature of plaintiff appearing on the plaint and other documents filed by her shows that signature appearing in the agreement are similar to the signature of plaintiff as appended in the plaint.
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20. The plaintiff has sought to dispute the agreement by denying her signatures, though execution of the agreement has been admitted by the plaintiff herself in her legal notice dated 02.05.2023.
21. Section 16 of the Arbitration & Conciliation Act deals with jurisdiction of Arbitration Tribunal, which reads as under:-
16. Competence of arbitral Tribunal to rule on its jurisdiction (1) The arbitral Tribunal may rule on its own jurisdiction, including ruling on any objections, with respect to the existence or validity of the arbitration agreement, and for that purpose, -
(a) an arbitration clause which forms part of a contract shall be treated as an agreement independent of the other terms of the contract; and
(b) a decision by the arbitral Tribunal that the contract is null and void shall not entail ipso jure the invalidity of the arbitration clause.
(2) A plea that the arbitral Tribunal does not have jurisdiction shall be raised not later than the submission of the statement of defence;
However, a party shall not be preclude from raising such a plea merely because that he has appointed, or participated CS(Comm) 260/2024 Riya Gupta vs Ninja Model Management Page No.10 of 29 Digitally signed by Pitamber Pitamber Dutt Dutt Date:
2025.05.03 15:32:51 +0530 in the appointment, an arbitrator.
(3) A plea that the arbitral tribunal is exceeding the scope of its authority shall be raised as soon as the matter alleged to be beyond the scope of its authority is raised during the arbitral proceedings.
(4) The arbitral tribunal may, in either of the cases referred to in sub-section (2) or sub-
section (3), admit a later plea if it considers the delay justified.
(5) The arbitral tribunal shall decide on a plea referred to in sub-section (2) or sub-
section (3) and, where the arbitral tribunal takes a decision rejecting the plea, continue with the arbitral proceedings and make an arbitral award.
(6) A party aggrieved by such an arbitral award may make an application for setting aside such an arbitral award in accordance with section 34.
22. A perusal of the same thus makes it amply clear that the dispute raised by the plaintiff regarding her signature over the contract having an arbitral clause can be adjudicated upon by the Ld. Arbitrator and not by the Court.
23. Ld. Counsel for the plaintiff has contended that the arbitral clause 8 (d) of contract dated 15.11.2021 is CS(Comm) 260/2024 Riya Gupta vs Ninja Model Management Page No.11 of 29 Digitally signed by Pitamber Pitamber Dutt Dutt Date:
2025.05.03 15:32:58 +0530 invalid as same talks about appointment of a sole arbitrator by the agency, therefore, same is not enforceable in view of the law laid down by the Hon'ble Supreme Court of India in "Central Organization for Railway Electrification Vs M/s ECI SPIC SMO MCML (JV) A Joint Venture Company, Civil Appeal no. 9486-
9487 of 2019.
24. Clause 8 (d) of the contract is reproduced as under:-
8. Termination of Agreement.
(a) to (c) ****
(d) In the event of any difference or dispute arising out of remuneration, liquidated damages, definition, interpretation or any other dispute with regard to and in relation to this agreement including that of termination shall be referred to a sole and neutral arbitrator to be decided by the agency whose decision shall be final and binding, with the costs borne by the aggrieved party.
25. A perusal of Clause 8 (d) of the said contract shows that it contemplates that in the event of any dispute / differences arisen, shall be referred to a sole and neutral arbitrator, decided by the agency, whose decision shall be binding.
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26. Section 12 of the Arbitration & Conciliation Act,1996 talks about the grounds for challenge, for appointment of Arbitrator. Clause 5 of Section 12 of the Act is relevant, which reads as under:-
12. Grounds for Challenge (1) ***** (2) ***** (3) ***** (4) ***** (5) Notwithstanding any prior agreement to the contrary, any person whose relationship, with the parties or counsel or the subject-matter of the dispute, falls under any of the categories specified in the Seventh Schedule shall be ineligible to be appointed as an arbitrator:
PROVIDED that parties may, subsequent to dispute having arisen between them, waive the applicability of this sub- section by an express agreement in writing.
27. Seventh Schedule of the Arbitration & Conciliation Act is also relevant to appreciate the legal proposition laid down in Section 12 (5) of the Act, which reads as under:-
SEVENTH SCHEDULE [Refer section 12 (5)] Arbitrator's relationship with the parties or counsel CS(Comm) 260/2024 Riya Gupta vs Ninja Model Management Page No.13 of 29 Digitally signed by Pitamber Pitamber Dutt Dutt Date:
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1. The arbitrator is an employee, consultant, advisor or has any other past or present business relationship with a party.
2. The arbitrator currently represents or advises one of the parties or an affiliate of one of the parties.
3. The arbitrator currently represents the lawyer or law firm acting as counsel for one of the parties.
4. The arbitrator is a lawyer in the same law firm which is representing one of the parties.
5. The arbitrator is a manager, director or part of the management, or has a similar controlling influence, in an affiliate of one of the parties if the affiliate is directly involved in the matters in dispute in the arbitration.
6. The arbitrator's law firm had a previous but terminated involvement in the case without the arbitrator being involved himself or herself.
7. The arbitrator's law firm currently has a significant commercial relationship with one of the parties or an affiliate of one of the parties.
8. The arbitrator regularly advises the appointing party or an affiliate of the appointing party even though neither the arbitrator nor his or her firm derives a significant financial income therefrom.
9. The arbitrator has a close family relationship with one of the parties and in the case of companies with the persons in the management and controlling the company.
10. A close family member of the arbitrator has a significant financial interest in one of the parties or an affiliate of one of the parties.
11. The arbitrator is a legal representative of an entity that is a party in the arbitration.
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2025.05.03 15:33:20 +0530
12. The arbitrator is a manager, director or part of the management, or has a similar controlling influence in one of the parties.
13. The arbitrator has a significant financial interest in one of the parties or the outcome of the case.
14. The arbitrator regularly advises the appointing party or an affiliate of the appointing party, and the arbitrator or his or her firm derives a significant financial income therefrom.
Relationship of the arbitrator to the dispute
15. The arbitrator has given legal advice or provided an expert opinion on the dispute to a party or an affiliate of one of the parties.
16. The arbitrator has previous involvement in the case.
Arbitrator's direct or indirect interest in the dispute
17. The arbitrator holds shares, either directly or indirectly, in one of the parties or an affiliate of one of the parties that is privately held.
18. A close family member of the arbitrator has a significant financial interest in the outcome of the dispute.
19. The arbitrator or a close family member of the arbitrator has a close relationship with a third party who may be liable to recourse on the part of the unsuccessful party in the dispute.
Explanation 1.--The term "close family member" refers to a spouse, sibling, child, parent or life partner.
Explanation 2.--The term "affiliate" encompasses all companies in one group of companies including the parent company.
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Explanation 3.--For the removal of doubts, it is clarified that it may be the practice in certain specific kinds of arbitration, such as maritime or commodities arbitration, to draw arbitrators from a small, specialised pool. If in such fields it is the custom and practice for parties frequently to appoint the same arbitrator in different cases, this is a relevant fact to be taken into account while applying the rules set out above.
28. A co-joint reading of Section 12 (5) of the Arbitration & Conciliation Act, 1996 and Seventh Schedule of the Act, clearly shows that any agreement, empowering any person for appointing an Arbitrator, whose relationship with that parties or counsel or the subject-matter of the dispute, falls under any of the categories specified in the Seventh Schedule of the Act is disqualified to be appointed as an Arbitrator. Thus, as per Section 12 (5) and Seventh Schedule of the Arbitration & Conciliation Act, any power of appointment of a Sole Arbitrator, given to any party as per any agreement is ineffective and contrary to law.
29. The Hon'ble Supreme Court of India has also held the appointment of a Sole Arbitrator as void ab initio in case titled "TRF Ltd. Vs Energo Engg. Projects Ltd.", reported as (2017) 8 Supreme Court Cases 377 and in "Perkins Eastman Architects DPC And Another Vs HSCC (India) Limited", reported as (2020) 20 Supreme CS(Comm) 260/2024 Riya Gupta vs Ninja Model Management Page No.16 of 29 Digitally signed by Pitamber Pitamber Date:
Dutt Dutt 2025.05.03 15:33:51 +0530 Court Cases 760.
30. Recently, a Constitutional Bench of the Hon'ble Supreme Court of India delivered an authoritative pronouncement on this aspect in case titled "Central Organisation for Railway Electrification Vs ECI SPIC SMO MCML (JV) A Joint Venture Company", reported as 2024 SCC OnLine SC 3219, relevant portion of the said judgment is reproduced herein below:-
J. Conclusion
169. In view of the above discussion, we conclude that:
a. The principle of equal treatment of parties applies at all stages of arbitration proceedings, including the stage of appointment of arbitrators;
b. The Arbitration Act does not prohibit PSUs from empanelling potential arbitrators. However, an arbitration Clause cannot mandate the other party to select its arbitrator from the panel curated by PSUs;
c. A Clause that allows one party to unilaterally appoint a sole arbitrator gives rise to justifiable doubts as to the independence and impartiality of the arbitrator. Further, such a unilateral Clause is exclusive and hinders equal participation of the other party in the appointment process of arbitrators;
CS(Comm) 260/2024 Riya Gupta vs Ninja Model Management Page No.17 of 29 Digitally signed by Pitamber Pitamber Dutt Dutt Date: 2025.05.03 15:33:57 +0530 d. In the appointment of a three-member panel,
mandating the other party to select its arbitrator from a curated panel of potential arbitrators is against the principle of equal treatment of parties. In this situation, there is no effective counterbalance because parties do not participate equally in the process of appointing arbitrators. The process of appointing arbitrators in CORE (supra) is unequal and prejudiced in favour of the Railways; e. Unilateral appointment clauses in public-private contracts are violative of Article 14 of the Constitution;
f. The principle of express waiver contained under the proviso to Section 12(5) also applies to situations where the parties seek to waive the allegation of bias against an arbitrator appointed unilaterally by one of the parties. After the disputes have arisen, the parties can determine whether there is a necessity to waive the nemo judex rule; and g. The law laid down in the present reference will apply prospectively to arbitrator appointments to be made after the date of this judgment. This direction applies to three-member tribunals.
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31. A perusal of the law laid down by the Hon'ble Supreme Court of India, coupled with Section 12 (5) and Seventh Schedule of the Arbitration & Conciliation Act, 1996 makes it absolutely clear that unilateral appointment clause of appointment of Arbitrator in an arbitration agreement is against the law and violative of Article 14 of the Constitution of India as held by the Hon'ble Supreme Court of India.
32. In the instant case, Clause 8 (d) of the Contract dated 15.11.2021, relied upon by defendant, gives power to the defendants to appoint a Sole Arbitrator, therefore, the said clause qua appointment of Sole Arbitrator comes under the teeth of Section 12 (5) of the Arbitration & Conciliation Act as well as the law laid down by the Hon'ble Supreme Court of India, therefore, said clause cannot be enforced.
33. Ld. Counsel for the defendants has contended that Clause 8 (d) is void only to the extent of the procedure of appointment of Arbitrator. However, remaining part of the said clause, which talks about resolution of dispute, if any through Arbitration & Conciliation Act is still enforceable as per the law laid down by the Hon'ble Supreme Court of India in "TRF Ltd. Vs Energo Engg.
Projects Ltd." (Supra) and in "Perkins Eastman CS(Comm) 260/2024 Riya Gupta vs Ninja Model Management Page No.19 of 29 Digitally signed by Pitamber Pitamber Dutt Dutt Date:
2025.05.03 15:34:17 +0530 Architects DPC & Another Vs HSCC (India) Limited"
(Supra), which has been reiterated by the Constitutional Bench of Hon'ble Supreme Court of India in "Central Organisation for Railway Electrification Vs ECI SPIC SMO MCML (JV) A Joint Venture Company"
(Supra).
He also relied upon judgment passed by the Hon'ble Delhi High Court in ARB.P. 582/2020 titled as Ram Kirpal Singh Construction Pvt. Ltd. vs. NTPC, decided on 09.11.2022.
34. No doubt that an agreement giving unilateral power to one party for appointment of a Sole Arbitrator, is not in accordance with the law and same is violative of Article 14 of the Constitution of India. However, fact remains that appointment of an Arbitrator and resolution of the dispute under the ambit of Arbitration & Conciliation Act, are two different things. Appointment of Arbitrator is a procedure, which prescribes how an Arbitrator is to be appointed. However, the other aspect deals with the alternative methodology of resolution of a dispute through Arbitration & Conciliation Act.
35. The Hon'ble Delhi High Court in "Ram Kripal Singh Construction Pvt. Ltd. Vs NTPC", (Supra) has CS(Comm) 260/2024 Riya Gupta vs Ninja Model Management Page No.20 of 29 Digitally signed by Pitamber Pitamber Dutt Dutt Date:
2025.05.03 15:34:25 +0530 held that:-
"The procedure for appointment of an arbitrator is clearly distinct and separable from the agreement to refer disputes to arbitration, even if these are contained in the same arbitration clause. If therefore, by reason of amendment, re-statement or re-interpretation of the law, as has happened in the present case by insertion of Section 12 (5) in the A&C Act and the verdicts of the Supreme Court in TRF Ltd. and Perkins Eastman (Supra), the procedure for appointment of arbitrator at the hands of one of the parties becomes legally invalid, void and unenforceable, that does not mean that the core agreement between the parties to refer their inter-se disputes to arbitration itself perishes. In the opinion of this Court - this "my way or the highway"
approach - is not tenable in law; and in such circumstances, that part of the arbitration agreement which has been rendered invalid, void and enforceable is to be severed or excised from the arbitration clause, while preserving the rest of the arbitration agreement."
36. Similar proposition has been reiterated by the Hon'ble High Court of Delhi in judgment titled "S.K. Engineering & Construction Company India" Vs Bharat CS(Comm) 260/2024 Riya Gupta vs Ninja Model Management Page No.21 of 29 Digitally signed by Pitamber Pitamber Dutt Dutt Date:
2025.05.03 15:34:42 +0530 Heavy Electricals Ltd.", 2023 SCC OnLine Del 7575 , para 11 of this judgment is relevant, which is reproduced as under:-
"In the context of a similar arbitration clause, a Co- ordinate Bench of this Court in Ram Kripal Singh (supra), noted that the consistent view taken by at least three different Co-ordinate Benches of this Court, dealing with a similar arbitration clause, namely in T.K. Engineering (supra), ARSS Infrastructure (supra) and NIIT Technologies (supra), is that just because the procedure for appointment of an arbitrator has been rendered invalid or unenforceable by reason of the amendment to the A&C Act, by insertion of Section 12(5) and by the subsequent decisions of the Supreme Court in TRF Ltd.(supra) and Perkins Eastman (supra), would not imply that the entire arbitration clause is rendered invalid or void. It was held that the procedure for appointment of an arbitrator is clearly distinct and separable from the agreement to refer disputes to arbitration, even if these are contained in the same arbitration clause. The relevant extracts of the said decision are as under:
"17. Upon a conspectus of CS(Comm) 260/2024 Riya Gupta vs Ninja Model Management Page No.22 of 29 Digitally signed by Pitamber Pitamber Dutt Dutt Date:
2025.05.03 15:34:48 +0530 the averments contained in the petition and the reply, as also the submissions made by counsel, and on a reading of the judicial precedents cited, the following inferences arise:
17.1. The respondent does not dispute the existence of the arbitration agreement between the parties, except to say, that since a certain procedure for appointment of an arbitrator was embedded in the arbitration clause, which procedure has now become illegal, invalid and unenforceable, the entire arbitration agreement perishes along therewith.
The respondent's contention is that it was expressly agreed between the parties that if an arbitrator could not be appointed as per that agreed procedure, there would be no arbitration at all;
17.2. Now, clauses that are same or similar to clause 56 of the GCCs, which contains the arbitration agreement in the present case, have been dealt with by at least three different Co-ordinate Benches of this court; and the consistent view taken is that just because the procedure for appointment of an arbitrator has been rendered invalid or unenforceable by reason of the amendment to the A&C Act, by insertion of section 12(5) and by the subsequent decisions of the Supreme Court in TRF Ltd. and Perkins Eastman (supra), that does not mean that the CS(Comm) 260/2024 Riya Gupta vs Ninja Model Management Page No.23 of 29 Digitally signed by Pitamber Pitamber Dutt Dutt Date:
2025.05.03 15:34:54 +0530 entire arbitration clause is rendered invalid or void. Such arbitration clauses have been held to be valid and enforceable. Reference in this regard may be made to TK Engineering(supra), ARSS Infrastructure(supra) as also to NIIT Technologies Ltd. v. Directorate General, Border Security Force;
17.3. Expatiating upon the aforesaid consistent view, in the opinion of this court, an arbitration agreement may narrate and include several other aspects relating to arbitration - such as the procedure for appointment of arbitrator(s); seat or venue of arbitration proceedings; the substantive and procedural law that would govern arbitral proceedings; specifics of disputes that are excepted from the purview of arbitration; liability of costs for arbitral proceedings and such-like other matters - so as to detail- out the arbitral mechanism and to make the arbitration agreement more comprehensive. Even if embedded in the self-same arbitration clause, these aspects relate to different strands of the agreed arbitral mechanism and are distinct and separable from the core arbitration agreement itself, viz. the primary consent of parties to refer their inter- se disputes arising from a given contract or transaction to arbitration;
17.4. The procedure for appointment of an arbitrator is clearly distinct and CS(Comm) 260/2024 Riya Gupta vs Ninja Model Management Page No.24 of 29 Digitally signed by Pitamber Pitamber Date:
Dutt Dutt 2025.05.03 15:35:09 +0530 separable from the agreement to refer disputes to arbitration, even if these are contained in the same arbitration clause. If therefore, by reason of amendment, re-statement or reinterpretation of the law, as has happened in the present case by insertion of section 12(5) in the A&C Act and the verdicts of the Supreme Court in TRF Ltd.
and Perkins Eastman (supra), the procedure for appointment of arbitrator at the hands of one of the parties becomes legally invalid, void and unenforceable, that does not mean that the core agreement between the parties to refer their inter-se disputes to arbitration itself perishes. In the opinion of this court - this "my way or the highway" approach - is not tenable in law; and in such circumstances, that part of the arbitration agreement which has been rendered invalid, void and enforceable is to be severed or excised from the arbitration clause, while preserving the rest of the arbitration agreement;
17.5. Accordingly, this court is of the view, that there is a valid and subsisting arbitration agreement between the parties, though the procedure for appointment of the arbitrator at the hands of the CMD, NTPC is no longer valid, and must therefore be severed from the remaining arbitration clause;
CS(Comm) 260/2024 Riya Gupta vs Ninja Model Management Page No.25 of 29 Digitally signed Pitamber by Pitamber Dutt Dutt Date: 2025.05.03 15:35:16 +0530 17.6. The aforesaid view taken by this court is also in consonance with the extant legislative and judicial policy that arbitration agreements are not to be readily invalidated unless there is compelling basis to do so; and arbitration is to be encouraged as an alternative mode of disputes adjudication (cf. Chloro Controls India Pvt. Ltd. v.
Severn Trent Purification Inc.)
37. Similar proposition has been laid down by the Hon'ble Delhi High Court in "Sam (India) Buildwell Pvt. Ltd. Vs Coslight Indian Telecom Pvt. Ltd.", 2018 SCC OnLine Del 8703.
38. A perusal of the above judgment thus clearly shows that the procedure for appointment of an Arbitrator is clearly distinct and separable from the procedure of referring a dispute for Arbitration, even if same are contained in the same clause of an agreement.
39. The relationship between plaintiff and defendant is governed on the basis of contract dated 15.11.2021, pursuant to which, plaintiff started working as a model with the defendants and as per Clause 6 of the said contract, the remuneration of plaintiff and commission of agency were agreed upon.
CS(Comm) 260/2024 Riya Gupta vs Ninja Model Management Page No.26 of 29 Digitally signed by Pitamber Pitamber Dutt Date: Dutt 2025.05.03 15:35:24 +0530
40. The said contract entered into between the plaintiff and the defendant contains an arbitration clause, part of which is not enforceable but the procedure for appointment of an Arbitrator is severable as held by the Hon'ble Delhi High Court, therefore, plaintiff, should have approached the appropriate forum for appointment of Arbitrator for resolution of her dispute, instead of coming to the court.
41. The Hon'ble Supreme Court of India in "Hindustan Petroleum Corpn. Ltd. Vs M/s. Pinkcity Midway Petroleum", reported as AIR 2003 SC 2881 has held that:-
"The language of Section 8 is peremptory in nature. Therefore, in cases where there is an arbitration clause in the agreement, it is obligatory for the Court to refer the parties to arbitration in terms of their arbitration agreement and nothing remains to be decided in the original action after such an application in made except to refer the dispute to an arbitrator.Therefore, it is clear that if, as contended by a party in an agreement between the parties before the Civil Court, there is a clause for arbitration, it is CS(Comm) 260/2024 Riya Gupta vs Ninja Model Management Page No.27 of 29 Digitally signed by Pitamber Pitamber Dutt Dutt Date:
2025.05.03 15:35:31 +0530 mandatory for the Civil Court to refer the dispute to an arbitrator ...........It is clear from the language of the Section that if there is any objection as to the applicability of the arbitration clause to the facts of the case, the same will have to be raised before the concerned Arbitral tribunal. The Civil Court should not embark upon an inquiry in regard to the applicability of the arbitration clause to the facts of the case."
42. The above proposition laid down by the Hon'ble Supreme Court of India makes it clear that if there exit an arbitration clause in an agreement, which is subject matter of a suit and an application is filed before the Court, before first statement was presented, then the Court has to refer the parties for arbitration and said reference is mandatory. Thus, this Court has no jurisdiction to decide the present suit and parties have to find resolution of their dispute through Arbitration and Conciliation Act, 1996.
43. In view of the above facts and circumstances, the application filed by the applicant / defendants under Section 8 of the Arbitration & Conciliation Act is CS(Comm) 260/2024 Riya Gupta vs Ninja Model Management Page No.28 of 29 Digitally signed by Pitamber Pitamber Dutt Dutt Date:
2025.05.03 15:35:37 +0530 allowed. The present suit is held barred under Section 5 & 8 of the Arbitration & Conciliation Act, 1996. The plaintiff is directed to seek resolution of her dispute through Arbitration and for that purpose she may approach to the Hon'ble Delhi High Court for seeking resolution of their dispute under Arbitration & Conciliation Act, 1996 by making application before the Hon'ble High Court for seeking appointment of an Arbitrator under Section 11 (6) of the Arbitration & Conciliation Act, 1996.
File be consigned to Record Room.
Announced In the Open Court on 03rd of May, 2025 Digitally signed Pitamber by Pitamber Dutt Date:
Dutt 2025.05.03
15:35:45 +0530
(PITAMBER DUTT )
District Judge (Commercial Court-01) East District Karkardooma Courts, Delhi CS(Comm) 260/2024 Riya Gupta vs Ninja Model Management Page No.29 of 29