Delhi High Court - Orders
Hero Fincorp Limited vs Feedback Infra Private Limited & Anr on 13 September, 2022
Author: Prateek Jalan
Bench: Prateek Jalan
$~7
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ ARB.P. 836/2022
HERO FINCORP LIMITED ..... Petitioner
Through: Mr. Ajay Kohli & Ms. Dipika
Prasad, Advocates. [M:-
8800149680]
versus
FEEDBACK INFRA
PRIVATE LIMITED & ANR. ..... Respondents
Through: Mr. Sidharth Arora, Advocate with
Mr. Parvesh K. Kheterpal, AR of
FIPL/R-1.
Mr. Vzay K. Singh, Mr. Himanshu
Dubey & Ms. Shruti Manchanda,
Advocates for R-2.
CORAM:
HON'BLE MR. JUSTICE PRATEEK JALAN
ORDER
% 13.09.2022
1. By way of this petition under Section 11 of the Arbitration and Conciliation Act, 1996 ["the Act"], the petitioner seeks appointment of an arbitrator to adjudicate the disputes arising between the petitioner and the respondents under a Loan Facility Agreement dated 28.02.2020 ["the Facility Agreement"], as well as a Hypothecation Deed ["Hypothecation Deed"], and a Deed of Guarantee ["the Guarantee Deed"] of the same date, as well as a Supplementary Agreement dated 27.11.2020.
2. The Facility Agreement was entered into between the petitioner and the respondent No. 1, whereunder the petitioner agreed to provide certain credit facilities to the respondent No.1. Clause 20 of the Facility Agreement contemplates disputes resolution by way of arbitration. New Signature Not Verified Digitally signed ARB.P. 836/2022 Page 1 of 4 By:SHITU NAGPAL Signing Date:14.09.2022 17:51:11 Delhi has been designated as the seat of the arbitration. Under Clause 19.2, exclusive jurisdiction has been vested to the Courts in Delhi. Clauses 6 and 7 of the Hypothecation Deed, and Clause 3.43 of the Deed of Guarantee [in which the respondent No. 2 is named as the guarantor] contemplate dispute resolution in terms of the arbitration clause contained in the Facility Agreement.
3. In view of the allied failure of the respondents to honour their obligations under the aforesaid agreements, the petitioner, through counsel, addressed a loan recall notice dated 30.08.2021 to the respondents. The respondents disputed the contents of the notice by way of a reply dated 20.10.2021.
4. Mr. Ajay Kohli, learned counsel for the petitioner, addressed a further communication dated 22.10.2021 to the respondents, invoking the arbitration clause, and suggesting names for appointment as the sole arbitrator. The respondent No. 2 has replied on 22.11.2021, declining consent to the appointment. The respondent No. 1, by a communication of the same date, through counsel, has also taken a similar position.
5. It is in these circumstances the present petition under Section 11 of the Act was filed. Notice was issued on 22.07.2022. Mr. Sidharth Arora, learned counsel, enters appearance on behalf of respondent No. 1 and Mr. Vzay K. Singh, learned counsel, enters appearance on behalf of respondent No. 2.
6. As far as the respondent No. 1 is concerned, it is submitted that said respondent is trying to settle the matter with the petitioner and requires approximately one month's time for this purpose. Mr. Kohli and Mr. Arora are agreeable to the appointment of an arbitrator with a request to defer the reference for a period of about six weeks to permit the parties Signature Not Verified Digitally signed ARB.P. 836/2022 Page 2 of 4 By:SHITU NAGPAL Signing Date:14.09.2022 17:51:11 to arrive at an amicable settlement of their dispute.
7. As far as the respondent No. 2 is concerned, Mr. Singh submits that insolvency proceedings have been commenced against him under Section 95 of the Insolvency and Bankruptcy Code, 2016, as the alleged personal guarantor of a corporate debtor. As notice has been issued by the National Company Law Tribunal ["NCLT"] in the said petition, Mr. Singh submits that a moratorium has come to operate as far as respondent No. 2 is concerned, and no reference to arbitration can be made at this stage. Copy of the order of the NCLT dated 31.08.2022 in Case No. (IB)- 640/ND/2022 [SBM Bank (India) Ltd. vs. Mr. Vanayak Chatterjee], has been handed over in Court and is taken on record.
8. In these circumstances, Mr. Kohli submits that he does not press the petition as against respondent No. 2 at this stage. However, he seeks liberty to take appropriate proceedings against the respondent No. 2 at the appropriate stage, if the situation changes.
9. Having regard to the aforesaid submissions and with the consent of learned counsel for the parties, the petition is disposed of with the following directions:-
a) The disputes between the petitioner and the respondent No. 1 under the Facility Agreement and the Hypothecation Deed as well as the Supplementary Agreements are referred to arbitration. Hon'ble Mr. Justice Pradeep Nandrajog, former Chief Justice of the High Courts of Rajasthan and Bombay (Tel No. 98180001301, e-mail [email protected] ) is appointed as the Arbitrator for this purpose.
b) The arbitration will be held under the aegis of Delhi International Arbitration Centre, Delhi High Court, Sher Shah Road, New Delhi-Signature Not Verified Digitally signed ARB.P. 836/2022 Page 3 of 4 By:SHITU NAGPAL Signing Date:14.09.2022 17:51:11
110503 ["DIAC"].
c) The Rules of the DIAC will govern the arbitration, including as to the remuneration of the learned arbitrator.
d) As the respondent No. 1 wishes to attempt a settlement with the petitioner, and seeks a period of approximately one month for this purpose, the learned arbitrator is requested to defer the reference until 01.11.2022. If the parties jointly request the learned arbitrator for further time, the learned arbitrator may consider the request.
However, if the settlement talks are unsuccessful and are concluded before 01.11.2022, either party may approach the learned arbitrator to enter into the reference at his/her earliest convenience.
e) The learned arbitrator is requested to furnish a declaration under Section 12 of the Act, prior to entering upon the reference.
10. In the event, the petitioner seeks to proceed against the respondent No. 2 at a later stage, the petitioner may take such remedies as advised, including seeking impleadment of respondent No. 2 in the arbitration proceedings. In the event the petitioner takes any proceedings against respondent No. 2, the rights and contentions of the respondent No. 2 are expressly reserved.
11. The petition stands disposed of with these directions.
PRATEEK JALAN, J SEPTEMBER 13, 2022 'pv'/ Click here to check corrigendum, if any Signature Not Verified Digitally signed ARB.P. 836/2022 Page 4 of 4 By:SHITU NAGPAL Signing Date:14.09.2022 17:51:11