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Smt Shivani Rana & Anr vs Footprints Childcare Private Limited & ... on 8 April, 2022

Author: Sanjeev Narula

Bench: Sanjeev Narula

                          $~49
                          *      IN THE HIGH COURT OF DELHI AT NEW DELHI
                          +      O.M.P.(I) (COMM.) 114/2022 & I.A. 5542/2022
                                 SMT SHIVANI RANA & ANR.                                ..... Petitioners
                                                       Through:

                                                       versus

                                 FOOTPRINTS CHILDCARE PRIVATE LIMITED & ANR.
                                                                           ..... Respondents
                                              Through: Mr. Chandrashekhar Z. Chakdabbi
                                                       and Mr. Anshul Rai, Advocates for R-
                                                       1 and 2.

                                 CORAM:
                                 HON'BLE MR. JUSTICE SANJEEV NARULA
                                              ORDER

% 08.04.2022

1. The present petition has been filed under Section 9 of the Arbitration and Conciliation Act, 1996 [hereinafter referred to as the 'Act'] seeking urgent interim reliefs against the Respondent-school.

2. Briefly stated, Petitioners are partners in a partnership firm holding equal share. They entered into a Franchise Agreement dated 31st May 2019 [hereinafter, the 'Franchise Agreement'] on behalf of the firm, with the Respondents, for running a pre-school half day and pre-school full day learning centre named "Footprints" situated at Nursery School Building, Ground Floor, Sector-C, Pocket-3, Vasant Kunj, New Delhi-70 for a one- time franchise joining fee of Rs. 3 crores, paid to the Respondent. According to the Petitioner, under the Clause 8.6 read with Schedule G of the Franchise Agreement, Respondent was to make a minimum guarantee payout of Rs.

6,30,000/- per month to the Petitioner for a period of 24 months from the date of the Agreement, as well as a percentage of the revenue in case it exceeded threshold monthly limit. On account of Covid-19 pandemic, the pre-school had to be shut down. This eventually led to disputes between the parties. The Respondent terminated the Franchise Agreement vide Legal Notice dated 25th February 2022.

3. In this background, the Petitioner has approached this Court, apprehending that the Respondent may grant further franchises in the city in violation of the Petitioner's Right of First Refusal (ROFR) as provided under Clause 8.9 of the Franchise Agreement.

4. After addressing arguments for some time, counsel for the Petitioner suggested that in these proceedings itself, the Court could appoint an Arbitrator considering the fact that the arbitration agreement contained in the Franchise Agreement is not in controversy. Counsel for the Respondent agrees that the existence of the arbitration agreement is not in dispute, however, he submitted that claims made by the Petitioner are disputed by the Respondent. Nevertheless, he very fairly states that the disputes would have to be adjudicated before the Arbitral Tribunal, and that the court may proceed to refer the disputes to a court-appointed arbitrator in this petition itself.

5. In view of the above, although the present petition is one under Section 9 of the Act, however, since parties jointly consent and request the Court to appoint an Arbitrator, the request is allowed.

6. Hon'ble Ms. Justice Manju Goel (Retd.), former Judge of this Court [Contact No.: +91 9818000330] is appointed as the Sole Arbitrator to adjudicate the disputes that are stated to have arisen between the parties Signature Not Verified Digitally Signed O.M.P.(I) (COMM.) 114/2022 Page 2 of 3 By:SAPNA SETHI Signing Date:11.04.2022 12:16:00 herein out of the Franchise Agreement dated 31st May 2019.

7. The parties are directed to appear before the Ld. Sole Arbitrator as and when notified. This is subject to the Ld. Arbitrator making necessary disclosure(s) under Section 12(1) of the Act and not being ineligible under Section 12(5) of the Act.

8. The Ld. Arbitrator will be entitled to charge their fee in terms of the provisions of the Fourth Schedule appended to the Act.

9. All rights and contentions of all the parties are left open. It is clarified that the Court has not examined any of the claims of the parties and all rights and contentions on merits are left open. Both the parties shall be free to raise their claims/counter claims before the Ld. Arbitrator in accordance with law.

10. Accordingly, let the present petition be treated as one under Section 17 of the Act, to be urged before the Tribunal. It is made clear that this court has not experienced any opinion on the disputes, and the Arbitral Tribunal would consider the application on merits, uninfluenced by any observations made by the Court. Both the parties are permitted to file additional pleadings for seeking interim measures, if so advised.

11. In view of the above terms, the present petition is disposed of, along with other pending application(s).

SANJEEV NARULA, J APRIL 8, 2022 d.negi Signature Not Verified Digitally Signed O.M.P.(I) (COMM.) 114/2022 Page 3 of 3 By:SAPNA SETHI Signing Date:11.04.2022 12:16:00