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Shri Manoj Kapoor & Ors vs Mr. Santosh Kumar Yadav on 30 August, 2022

Author: Anup Jairam Bhambhani

Bench: Anup Jairam Bhambhani

                          $~1
                          *     IN THE HIGH COURT OF DELHI AT NEW DELHI
                          +     ARB.P. 579/2020
                                SHRI MANOJ KAPOOR & ORS.                     ..... Petitioners
                                                Through: Mr. Rohit Goel, Advocate via video
                                                           conferencing with Mr. Mithlesh Jha,
                                                           Advocate.
                                                versus
                                MR. SANTOSH KUMAR YADAV                      ..... Respondent
                                                Through: Ms. Jyoti Nambiar, Advocate.
                                CORAM:
                                HON'BLE MR. JUSTICE ANUP JAIRAM BHAMBHANI
                                                ORDER

% 30.08.2022 By way of the present petition under section 11(6) of the Arbitration & Conciliation Act 1996 ('A&C Act' for short), the petitioner seeks appointment of an arbitrator to adjudicate upon the disputes that are stated to have arisen with the respondent from Memorandum of Understanding dated 08.08.2017('MoU').

2. Mr. Rohit Goel, learned counsel for the petitioner has drawn the attention of this court to clause 10 which comprises the arbitration agreement between the parties; and contemplates reference of disputes between them to arbitration in accordance with the A&C Act; with the 'venue' of arbitration being at New Delhi.

3. As per the record, the petitioner invoked arbitration vide Notice dated 27.09.2019; to which the respondent sent a reply dated 16.10.2019.

4. Notice on this petition was issued on 09.04.2021; consequent to which the respondent has filed its reply dated 29.08.2022 taking the following principal objections:

a. That the MoU in which the arbitration agreement is contained, in particular the clause that bars the respondent from contacting and/or encouraging anyone associated with the petitioners' company to quit its commercial relationship, and therefore from effectively conducting his business, is void, being in violation of section 27 of the Indian Contract Act 1872. It is argued, that since the said provision itself is void in law, the disputes are non-arbitrable;

b. That the subject matter of reference is also non-arbitrable since the relief sought by the petitioner affect third parties, who are not bound by the MoU, viz. the third parties who the respondent is alleged to have solicited as employees and staff; c. That an earlier petition filed by the petitioners under section 9 of the A&C Act, whereby the petitioners had sought relief of injunction/restraint against the respondent on similar grounds, was dismissed as not maintainable; and by reason thereof, the present petition is also not maintainable;

d. That the original arbitration agreement has not been placed on record, by reason of which the present petition cannot be entertained and deserves to be rejected;

e. That the respondent signed the MoU at the stage when he was leaving the directorship of the petitioner company and was " ... more interested in getting his dues from the Company ...',for which reason the terms of the MoU, including the arbitration clause were never discussed, but are now found mentioned in the MoU; and that therefore, the MoU is a result of fraud Signature Not Verified Digitally Signed By:SUNITA RAWAT Signing Date:01.09.2022 ARB.P. 579/2020 Page 2 of 5 16:26:44 committed by the petitioners, who took the respondent's signatures on the document, who signed only in good faith. The MoU is accordingly also against public policy and therefore void.

5. Ms. Jyoti Nambiar, learned counsel for the respondent has also taken the objection that the petition has been filed by the four petitioners in their capacity as Directors of M/s. Micro Coils and Refrigeration Pvt. Ltd., whereas the MoU from which the disputes are stated to have arisen, was signed by the said persons in their personal capacities and not as Directors of the said company.

6. Having taken the objections as aforesaid however, learned counsel for the respondent fairly submits, that provided all such objections are kept open, the respondent does not oppose the appointment of an arbitrator to adjudicate upon the disputes between the parties.

7. In response to this, Mr. Goel submits that, for one, a conjoint reading of the various clauses of the MoU, including the first recital will show that the petitioners had signed the MoU in their capacity as Directors of the said company; and moreover in an earlier round of litigation, when the petitioners filed Arb.P. No. 173/2019 only in the name of the company, the respondent had taken exactly the contrary objection, viz. that the petition ought to have been filed by the Directors of the company; by reason of which the said petition was withdrawn as recorded in order dated 24.09.2019 made in Arb.P. No. 173/2019, with liberty to file afresh on behalf of the Directors of the company. Accordingly it is argued that the respondent's objection is not only baseless but is also dishonest.

8. In the opinion of this court, the objections taken by the respondent, as summarised above, relate essentially to the merits of the disputes between the parties; and none of the objections is relevant or material for deciding the present petition, which is restricted only to seeking reference to arbitration.

9. Upon a conspectus of the averments contained in the petition, the stand taken by the respondent and the submissions made, this court is satisfied that there is a valid and subsisting arbitration agreement between the parties; that this court has territorial jurisdiction to entertain and decide the present petition; and also that the disputes that are stated to have arisen between the parties as set-out inter-alia in invocation notice dated 27.09.2019 do not appear ex-facie to be non-arbitrable.

10. Learned counsel appearing for the parties also concur that their disputes may be referred for arbitration under the aegis of the Delhi International Arbitration Centre, New Delhi.

11. Accordingly, the disputes between the parties are referred to arbitration under the aegis of the Delhi International Arbitration Centre, New Delhi ('DIAC'); with a direction to the Co-ordinator, DIAC to appoint an appropriate arbitrator in the matter, in accordance with the rules and regulations of DIAC and subject to such arbitrator's fee and arbitral costs, as may be applicable under their rules.

12. A copy of this order be communicated to the Co-ordinator, DIAC, for information and compliance.

13. A copy of this order be sent by e-mail to learned counsel for the parties.

14. Parties are directed to approach the Co-ordinator, DIAC for the above purpose within 10 days.

15. The petition stands disposed of accordingly.

16. Pending application, if any, also stand disposed of.

ANUP JAIRAM BHAMBHANI, J AUGUST 30, 2022 ds Signature Not Verified Digitally Signed By:SUNITA RAWAT Signing Date:01.09.2022 ARB.P. 579/2020 Page 5 of 5 16:26:44