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Gautam Sahni vs Tdi Infrastructure Ltd on 15 September, 2021

Author: Sanjeev Narula

Bench: Sanjeev Narula

$~28
*      IN THE HIGH COURT OF DELHI AT NEW DELHI
+     ARB.P. 854/2019 & I.A. 1790/2021.
      GAUTAM SAHNI                                             ..... Petitioner
                          Through: Mr. Humraz Singh, Advocate.
                          versus
      TDI INFRASTRUCTURE LTD.                                ...... Respondent
                          Through: Mr. Vaibhav Agnihotri and Mr Rohan
                                       Anand, Advocates.
      CORAM:
      HON'BLE MR. JUSTICE SANJEEV NARULA
                    ORDER

%                   15.09.2021
[VIA VIDEO CONFERENCING]

1. The present petition has been filed under Section 11 (6) of the Arbitration and Conciliation Act, 1996 (in short 'the Act') seeking appointment of an Arbitrator for adjudication of disputes that have arisen out of and in relation to the Agreement to Sell (Buyer's Agreement) dated 21 st February, 2012 executed between the parties. The arbitration clause is contained in the Clause 17 of the Agreement which reads as under:

        "                             ARTICLE 17
                                      ARBITRATION

1. All disputes, differences or disagreement arising out of, in connection with or in relation to this Agreement shall be mutually discussed and settled between the Parties.

2. All disputes, differences or disagreement arising out of, in connection with or in relation to this Agreement, which cannot be amicably settled, shall be finally decided by arbitration to be held in accordance with the provisions of the Arbitration and Conciliation Act, 1996. Any arbitration as aforesaid shall be a domestic arbitration under the Applicable Law.

3. The venue of arbitration shall be New Delhi or such other place as may be mutually agreed between the Parties and the language of arbitration shall be English.

4. The arbitration shall take place before the sole arbitrator, appointed by the First Party. The award shall be rendered in English Language."

2. Prior to the filing of the present petition, the Petitioner had filed a civil ARB.P. 854/2019 Page 1 of 4 suit being no. 1026/2017 against the Respondent relating to the Agreement in question. In the said suit, on an application filed by the Respondent under Section 8 of the Act, the suit was dismissed, and parties were referred to arbitration. In terms of the said order, the Respondent proceeded to appoint an Arbitrator. Subsequently, the said learned Arbitrator vide order dated 20th September, 2019 withdrew from his office and the proceedings were closed.

3. The Petitioner, instead of invoking Section 15 for appointment of a substitute Arbitrator, has filed the present petition under Section 11(6) of the Act.

4. Mr. Vaibhav Agnihotri, counsel for the Respondent, does not dispute the existence of the arbitration agreement. However, he objects to the maintainability of the present petition on two grounds. First, he argues that after the learned Arbitrator withdrew from his office, the Petitioner ought to have taken recourse to the mechanism provided in the arbitration clause; called upon the Respondent to appoint the arbitrator, instead of approaching this Court directly. Respondent's right to appoint the Arbitrator in terms of Clause 17(4) of the Agreement, cannot be taken away. Reliance is placed upon the judgment of this Court in Kadimi International Pvt. Ltd. v. Emaar MGF Land Limited.1

5. The Court has considered the contentions of the parties. In light of the decision of the Supreme Court in Perkins Eastman Architects DPC and Ors. v. HSCC (India) Ltd.,2 unilateral appointment of an arbitrator by any one party is no longer permissible. The view taken by this Court in Kadimi International (supra), was prior to the judgment of Supreme Court in 1 2019 SCC OnLine Delhi 9857.

AIR 2020 SC 59.

Perkins Eastman (supra). In fact, the view taken in Perkins Eastman (supra), has been followed by this Court - in several judgments, of which, some have been authored by the undersigned. Moreover, in a recent judgment, a co-ordinate Bench of this Court in Proddatur Cable TV Digi Services v. Siti Cable Network Limited3, went a step further and has held that even in a case where a 'Company' has been given a right of appointment, the same would also be conflict with the scheme of the Act and the view taken by the Supreme Court in Perkins Eastman (supra).

6. Thus, if Petitioner had taken recourse to the arbitration clause it would have been futile as Clause 17(4) of the Agreement would no longer be enforceable. In view of the above, the Court does not find merit in the contentions of the Respondent.

7. Accordingly, Mr. Dinesh Dayal (Retd.), former Additional District Judge, Delhi (Contact No. +91 9810100200) is appointed as the Sole Arbitrator to adjudicate the disputes that have arisen between the parties, in respect of the Agreement to Sell (Buyer's Agreement) dated 21st February, 2012.

8. The parties are directed to appear before the learned Arbitrator as and when notified. This is subject to the Arbitrator making the necessary disclosures under Section 12(1) of the Act and not being ineligible under Section 12(5) of the Act.

9. The learned Arbitrator will be paid their fee in terms of the provisions of the Fourth Schedule appended to the Act.

10. 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 parties shall be free to raise their claims/counter claims before the learned 3 Judgment dated 20th January, 2020 in O.M.P.(T.)(COMM.) 109/2019.

Arbitrator in accordance with law.

11. Accordingly, the present petition and the pending application are disposed of.

SANJEEV NARULA, J SEPTEMBER 15, 2021/ v ARB.P. 854/2019 Page 4 of 4