Calcutta High Court
Turner Morrison Limited vs Berger Paints India Limited on 20 January, 2026
Author: Shampa Sarkar
Bench: Shampa Sarkar
OCD 20
ORDER SHEET
AP-COM/990/2025
IN THE HIGH COURT AT CALCUTTA
COMMERCIAL DIVISION
ORIGINAL SIDE
TURNER MORRISON LIMITED
VS
BERGER PAINTS INDIA LIMITED
BEFORE:
The Hon'ble JUSTICE SHAMPA SARKAR
Date: 20th January, 2026.
Appearance:
Mr. Debanjan Mandal, Adv.
Mr. Debayan Sen, Adv.
Ms. Mahima Cholera, Adv.
Mr. N. Ojha, Adv.
...for the petitioner
Mr. Srinjoy Bhattacharya, Adv.
...for the respondent
The Court:
1. This is an application for appointment of an arbitrator in terms of
Clause 12.3.2 of the Share Purchase Agreement dated October 18,
2019. The Dispute Resolution Clause provides that if the disputes
between the parties cannot be settled by discussions then, the disputing
party may submit the claim or dispute to be finally settled by a sole
arbitrator to be appointed in term of the provisions of the Arbitration
and Conciliation Act, 1996. The relevant clauses are quoted below:
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"12.3. Dispute Resolution
12.3.1. Amicable Resolution of Dispute: If any dispute
arises in respect of the validity, interpretation,
implementation or alleged breach of any
provision of this Agreement or regarding a
question, including the questions as to whether
the termination of this Agreement by one Party
has been legitimate, arising out of this
Agreement (a "Dispute") between the Acquirer on
the one hand, and one or more of the Sellers on
the other hand (together, the "Disputing
Party(ies)"), the Disputing Parties shall attempt
to first resolve such dispute or claim through
mutual discussion between the Disputing
Parties.
12.3.2. Arbitration: If the Dispute is still not resolved
through discussions as aforesaid after 30(thirty)
days of it having arisen, then any Disputing
Party may submit the claim or Dispute to be
finally settled by arbitration, by a sole arbitrator
appointed in accordance with the provisions of
the Arbitration and Conciliation Act 1996 (as
amended from time to time). All arbitration
proceedings shall be conducted in the English
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language and the seat and venue of arbitration
shall be Kolkata, West Bengal.
12.3.3. Costs and Nature of Award: The arbitral award
shall be substantiated in writing and the
arbitrator shall also have the right to decide on
the costs of arbitration proceedings. Any award
made by the arbitrator shall be final and binding
on each of the Parties that were parties to the
Dispute.
12.3.4. Co-operation: Each Party shall cooperate in good
faith to expedite (to the maximum extent
practicable) the conduct of any arbital
proceedings commenced under this Agreement."
2. The petitioner is an existing company within the meaning of the
Companies Act, 2013 and is engaged in the business of investments in
shares and securities, financial activities, trading, renting and property
management.
3. STP Limited was a company which was set up by the petitioner
sometime in 1935. In July, 2019, the respondent allegedly approached
the petitioner and other shareholders to acquire the shares of STP. The
petitioner as the promoter shareholder was holding about 80.36% of the
share capital in STP and the balance shares of the company were held
by other minority shareholders. The Share Purchase Agreement dated
October 18, 2019 was executed between the petitioner as the promoter
4
along with the other shareholders of STP and the respondent. Under
the said agreement, the respondent acquired 95.53% of the
shareholding in STP. The petitioner contends that, as the disputes are
exclusively between the petitioner and the respondent, the application
for reference is restricted to the adjudication of the dispute between the
petitioner and respondent alone, on the strength of the arbitration
clause in the Share Purchase Agreement.
4. It is alleged that on the closing date, i.e., October 31, 2019, the
respondent was required to pay the actual purchase consideration to
the petitioner subject to retention of an amount of Rs.1,77,68,580/-
towards "Tax Liability Holdback Amount". The Tax Liability Holdback
Amount was in respect of an indentified tax litigation, being ITA
No.749/KOL/2017, which was pending before the Income Tax Appellate
Tribunal relating to Assessment Year 2011-12. The said tax litigation
ultimately concluded with an order passed by the department on July 7,
2025 under Section 92(2) read with Section 93 of the Finance Act, 2024
under the "Direct Tax Vivad se Vishwas" Scheme. STP became entitled
to refund of Rs.65,72,595/-. Under such circumstances, upon
conclusion of the tax litigation, the Tax Liability Holdback Amount
which was retained by the respondent was to be released to the
petitioner. The petitioner claimed such release, but the respondent did
not take steps.
5. According to the petitioner, in terms of Clause 5.9 read with Clause 12
of the Share Purchase Agreement, the respondent should have released
5
the amount with interest at the rate of 6 percent per annum within 15
business days from the order dated July 7, 2025. Consequently, the
respondent was under a duty and obligation to pay the outstanding
amount. Despite repeated written demands, the respondent failed and
neglected to make the aforementioned payments and allegedly denied its
liability. Thus, it is contended by the learned advocate for the petitioner
that the dispute which arose on account of non-release of the amount
which was held by the respondent, a notice invoking arbitration was
issued on November 20, 2025 and the petitioner suggested the name of
a retired Chief Justice as a sole arbitrator. By a letter dated December
3, 2025, the learned advocates for the respondent denied the allegations
of the petitioner and did not agree to the nomination of the retired Chief
Justice, as the sole arbitrator.
6. Mr. Srinjoy Bhattacharya, learned advocate for the respondent submits
that the claim is deadwood and the respondent is not liable to refund
the amount which was held under the Share Purchase Agreement. He
relies on the different clauses to submit that the petitioner had made a
claim contrary to the treatment of identified tax liability as provided in
the Share Purchase Agreement.
7. Mr. Bhattacharya submits that the Tax Liability Holdback period, that
is, the period for which the money could be retained by the respondent
was for a maximum of two years from the closing date. The closing date
was 31st October, 2019 under the said purchase agreement and the
period of two years expired on October 31, 2021. The petitioner invoked
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arbitration sometime in November, 2025 which was beyond the period
of three years from the date of accrual of the cause of action. The
petitioner ought to have taken steps within three years from October 31,
2021. He submits that the said claim has now become deadwood and
the question of refund of the same did not arise. He further submits
that the tax litigation culminated sometime in February, 2020 with the
assessment of the liability. Only because the petitioner preferred a writ
petition and a litigation was pending before the High Court, the period
of limitation would not stand extended. He further submits that it is
totally irrelevant in the context as to whether the petitioner availed of
the Vivad se Vishwas Scheme or not. The petitioner was required to
come within three years from at least culmination of the tax assessment
and not thereafter. Clause 5.5.2 was relied upon specifically by Mr.
Bhattacharya, which is quoted below:
"5.2. No later than 5 (five) Business Days prior to the
Closing Date. Company, and the Promoter shall ensure
that the Company shall deliver to the Acquirer, with
reasonable supporting information, setting forth, in the
format prescribed in Schedule V good faith estimates of
the Net Working Capital ("Estimated Net Working Capital")
and Net Debt ("Estimated Net Debt") of the Company as on
the Closing Date.
5.5.2 An amount of INR 1,77,68,580 (Indian Rupees One
Crore Seventy Seven Lakhs Sixty Eight Thousand Five
Hundred and Eighty only) (being 95.53% of INR
1,86,00,000)("Tax Liability Holdback Amount") from the
amount payable to the Promoter shall be retained for a
maximum period of 2 (two) years from the Closing Date
("Tax Liability Holdback Period"), for settlement in the
manner set out in clause 5.9 below. It is agreed that if
between the Execution Date and the Closing Date, the
estimated tax liability with respect to the Tax Litigation is
rectified by the Assessing Officer pursuant to an appeal
effect order, then the Tax Liability Holdback Amount shall
7
be proportionately reduced to such rectified amount,
including interest and penalty ( if any). Further, in the
event such appeal effect order is passed after the Closing
Date, the excess amount from the Tax Liability Holdback
Amount (i.e. Tax Liability Holdback Amount less the
proportionate rectified amount, including interest and
penalty) shall be refunded immediately by the Company to
the Promoter (along with interest thereon to be calculated
from the Closing Date until the date of payment), and in
any case within 7(seven) Business Days thereof, and the
balance shall be treated as the Tax Liability Holdback
Amount for the purposes of adjustment in terms of clause
5.9 below."
8. Learned advocate for the petitioner submits that Clause 5.9 clearly
demonstrates how the identified tax liability should be treated. Clause
5.9.1 provides that the parties agree that any losses incurred by, or
benefits accrued to the company with respect to the ongoing tax
litigation before the Income Tax Appellate Tribunal relating to the
assessment year 2011-2012 (Tax Litigation) shall be to the account of
the promoter so far as such losses are actually incurred within seven
years of the closing date. It is submitted that there is a window of seven
years for closing of the tax litigation and the amount which was held by
the respondent was for the purpose of utilization of the Holdback
Amount, subject to the result of such litigation. Clause 5.9.2 provides
that the Acquirer, which is the respondent herein, shall retain the Tax
Liability Holdback Amount in terms of Clause 5.5.2 and the same shall
be treated in the manner set out in Clause 5.9. Thus, it is submitted
that the said amount could be held for a period upto seven years from
the closing date. An interpretation of the above clauses, harmoniously
read, would indicate that the cause of action may not arise within two
8
years from the closing date or within two years from the date when the
first assessment was made. Learned advocate further relies on Clause
5.9.3(iii)(b) and submits that when an order is adverse to the company
STP, and while the adjustments may be made in terms of clause
5.9.3(ii), the company shall, with the consultation of the promoter
(petitioner) pursue such appeal or other remedy as applicable against
such order. In the event, the order in such proceedings is in favour of
the company, the Acquirer shall be required to pay to the promoter the
Tax Liability Holdback Amount (any additional amounts paid by the
promoter in terms of Clause 5.9.3(ii)(c) above) within 15 business days
from the date of such order along with interest thereon payable from the
closing date or the date of payment under clause 5.9.3(ii)(c), as
applicable.
The relevant clauses are quoted below:-
"5.9 Treatment of Identified Tax Liability
5.9.1. Notwithstanding anything contained in clause 10
(Indemnity) below, the Parties agree that any Losses incurred by,
or benefits accrued to, the Company with respect to the ongoing
tax litigation ITA no. 749/KOL/2017 before Income Tax Appellate
Tribunal relating to assessment year 2011-2012 ("Tax Litigation"),
shall be to the account of the Promoter, so far as such Losses are
actually incurred within 7 (seven) years of the Closing Date
("Identified Tax Liability Period").
5.9.2. In order to secure the payment towards such Losses in the
near future, the Acquirer shall retain the Tax Liability Holdback
Amount in terms of clause 5.5.2 above and the same shall be
treated in the manner set out in this clause 5.9.
5.9.3. In the event an order of the Income Tax Appellate Tribunal
is passed in the Tax Litigation prior to expiry of the Tax Liability
Holdback Period:
(i) Where such order is favourable to the Company, the entire
amount of the Tax Liability Holdback Amount (subject to
deduction of all reasonable legal costs and expenses) shall be
paid by the Acquirer to the Promoter (along with Interest thereon
9
calculated from the Closing Date until the date of payment),
immediately and in any case within 7 (seven) Business Days from
the date of the order;
(ii) Where such order is adverse to the Company, and:
(a) the Losses incurred by the Company on account of such order
are less than the Tax Liability Holdback Amount, the Acquirer
shall pay to the Promoter the difference between the Tax Liability
Holdback Amount less the Losses, within 3 (three) Business Days
from the date of the order;
(b) the Losses incurred by the Company on account of such order
are equal to the Tax Liability Holdback Amount, the Acquirer
shall not be required pay to any amounts towards the Tax
Liability Holdback Amount to the Promoter; and
(c) the Losses incurred by the Company on account of such order
are more than the Tax Liability Holdback Amount, the Acquirer
shall be entitled to recover such excess amounts from the Claim
Amount in terms of clause 5.10 below.
(iii) Any settlement of the Tax Liability Holdback Amount in terms
of clause 5.9.3 (i) and
(ii) above shall be subject to the following conditions:
(a) Where the order is favourable to the Company, while the Acquirer
will pay the Tax Liability Holdback Amount to the Promoter in
terms of clause 5.9.3 (i), the Promoter shall continue to be liable
to indemnify the Acquirer for the Losses that it may incur in
relation to any appeal made against the order for such Tax
Litigation so far as such Losses are incurred within the remaining
Identified Tax Liability Period. It is clarified that the Promoter
shall not be liable under any provision of this Agreement for any
such Losses in relation to Tax Litigation which are incurred after
the expiry of the Identified Tax Liability Period.
(b) Where the order is adverse to the company, while the
adjustments may be made in terms of clause 5.9.3(ii) above, the
Company shall, with the consultation of the Promoter, pursue
such appeal or other remedy (as applicable) against such order.
In this regard, the principles laid down with respect to pursuance
of Identified Claims in clause 5.10.4 below shall become
applicable. It being understood that in the event the order in such
proceedings are in favour of the Company, the Acquirer shall be
required to pay to the Promoter the Tax Liability Holdback
Amount (any additional amounts paid by the Promoter in terms
of clause 5.9.3 (ii)(c) above), within 15 (fifteen) Business Days
from the date of such order along with Interest thereon payable
from the Closing Date (or the date of payment under clause 5.9.3
(ii)(c) above), as applicable.
(c) Where status-quo is maintained under order of the Tax Litigation
(i.e. remanded back by the Income Tax Appellate Tribunal to the
Assessing Officer), the adjustments in terms of clause 5.9.3 (i) or
(ii) (as applicable), shall be made after the order of the Assessing
10
Officer, provided the same is within the Tax Liability Holdback
Period.
5.9.4. In the event an order of the Income Tax Appellate
Tribunal/ the Assessing Officer (as the case may be) is not passed
in the Tax Litigation prior to expiry of the Tax Liability Holdback
Period, the Acquirer shall pay the Tax Liability Holdback Amount
to the Promoter along with Interest thereon calculated from the
Closing Date. Any Losses incurred by the Acquirer in relation to
the Tax Litigation during the remaining Identified Tax Litigation
Period shall be recoverable by the Acquirer from the Promoter
from the Claim Amount in accordance with clause 5.10 below.
After expiry of the Identified Tax Liability Period, any Losses
incurred by the Company on account of the Tax Litigation shall
be to the account of the Company (and not the Promoter).
5.9.5. Notwithstanding anything contained in this Agreement, all
reasonable legal expenses and costs in relation to the Tax
Litigation shall be to the account of the Promoter."
9. Thus, it is contended that when the order of assessment went against
the company, the company instituted an appeal. The appeal continued
for a considerable time and ultimately, the matter was settled by an
order dated July 7, 2025. It is after such settlement that, the petitioner
became entitled to claim the amount and the respondent became liable
to pay the amount. Any other interpretation of the clauses would mean
that the claim of the petitioner could be made prior to settlement of the
income tax appeal which according to the Share Purchase Agreement
was not the true intent and purport of Clause 5.2.2 of the Share
Purchase Agreement.
10. Although Mr. Bhattacharya submits that these factual aspects have
to be brought on record in order to substantiate that the petitioner's
claim cannot be sustained in law, this Court is of the view that the
arguments of Mr. Bhattachary are based on interpretation of the various
clauses of the said Share Purchase Agreement which must be done by
11
the learned arbitrator. Thus, whether the claim is deadwood or not,
cannot be decided at this stage. Limitation in this case will require a
proper interpretation of the clauses discussed hereinabove and
harmonious reading thereof. Limitation is a triable issue in this case.
The factual aspects pointed out by Mr. Bhattacharya are not to be gone
into by the referral court as the learned arbitrator is the master of facts.
The scope of the referral court is limited. A deeper probe into the
various documents will defeat the purpose of resolution of dispute by
arbitration which is to be a speedy and time bound remedy.
11. The Hon'ble Supreme Court in SBI General Insurance Co. Ltd. v.
Krish Spg., reported in (2024) 12 SCC 1 clarified that, the scope of
enquiry at the stage of appointment of arbitrator was only with regard to
existence of an arbitration clause. Paragraphs 113 and 114 are quoted
below:-
"113. Referring to the Statement of Objects and Reasons of the
Arbitration and Conciliation (Amendment) Act, 2015, it was
observed in In Re: Interplay (supra) that the High Court and
the Supreme Court at the stage of appointment of arbitrator
shall examine the existence of a prima facie arbitration
agreement and not any other issues. The relevant observations
are extracted herein below:
"209. The above extract indicates that the Supreme Court or
High Court at the stage of the appointment of an arbitrator
shall "examine the existence of a prima facie arbitration
agreement and not other issues". These other issues not only
pertain to the validity of the arbitration agreement, but also
include any other issues which are a consequence of
unnecessary judicial interference in the arbitration
proceedings. Accordingly, the "other issues" also include
examination and impounding of an unstamped instrument by
the referral court at the Section 8 or Section 11 stage. The
process of examination, impounding, and dealing with an
unstamped instrument under the Stamp Act is not a time
bound process, and therefore does not align with the stated
12
goal of the Arbitration Act to ensure expeditious and time-
bound appointment of arbitrators. [...]" (Emphasis supplied)"
114. In view of the observations made by this Court in In Re:
Interplay (supra), it is clear that the scope of enquiry at the
stage of appointment of arbitrator is limited to the scrutiny of
prima facie existence of the arbitration agreement, and nothing
else. For this reason, we find it difficult to hold that the
observations made in Vidya Drolia (supra) and adopted in
NTPC v. SPML (supra) that the jurisdiction of the referral court
when dealing with the issue of "accord and satisfaction" under
Section 11 extends to weeding out ex-facie non-arbitrable and
frivolous disputes would continue to apply despite the
subsequent decision in In Re: Interplay (supra)."
12. Ajay Madhusudan Patel and Ors. v. Jyotrindra S. Patel and
Ors., reported in (2025) 2 SCC 147, the Hon'ble Apex Court held as
follows:-
76.6.Krish Spg. [SBI General Insurance Co. Ltd. v. Krish Spg., (2024)
12 SCC 1 : 2024 SCC OnLine SC 1754] cautioned that the courts
delving into the domain of the Arbitral Tribunal at the Section 11
stage run the risk of leaving the claimant remediless if the Section 11
application is rejected. Further, it was stated that a detailed
examination by the courts at the Section 11 stage would be
counterproductive to the objective of expeditious disposal of Section
11 application and simplification of pleadings at that stage.
76.7.Cox & Kings [Cox & Kings Ltd. v. SAP India (P) Ltd., (2024) 4
SCC 1 : (2024) 2 SCC (Civ) 1 : (2024) 251 Comp Cas 680] specifically
dealt with the scope of inquiry under Section 11 when it comes to
impleading the non-signatories in the arbitration proceedings. While
saying that the referral court would be required to prima facie rule
on the existence of the arbitration agreement and whether the non-
signatory party is a veritable party to the arbitration agreement, it
also said that in view of the complexity in such a determination, the
Arbitral Tribunal would be the proper forum. It was further stated
that the issue of determining parties to an arbitration agreement
goes to the very root of the jurisdictional competence of the Arbitral
Tribunal and can be decided under its jurisdiction under Section
16."
13
13. In the decision of ASF Buildtech Private Limited v. Shapoorji
Pallonji and Company Private Limited reported in (2025) 9 SCC 76,
the Hon'ble Apex Court held as follows:-
"72. The next chapter in the saga of scope and ambit of Section 11 of
the 1996 Act came in the form of the seven-Judge Bench decision of
this Court in Interplay Between Arbitration Agreements under
Arbitration Act, 1996 & Stamp Act, 1899, In re [Interplay Between
Arbitration Agreements under Arbitration Act, 1996 & Stamp Act,
1899, In re, (2024) 6 SCC 1] wherein one of us (J.B. Pardiwala, J.) as
part of the Bench, undertook a comprehensive analysis of Section(s)
8 and 11, respectively, of the 1996 Act and, inter alia, made poignant
observations about the nature of the power vested in the courts
insofar as the aspect of appointment of arbitrator is concerned. It
held that the Referral Court, be it the High Court or the Supreme
Court under Section 11 of the 1996 Act shall examine only the
existence of a prima facie arbitration agreement and not any other
issues. The relevant observations read as under: (SCC pp. 96-97 &
104, paras 196-97 & 220)
"196. The corollary of the doctrine of competence-competence is that
courts may only examine whether an arbitration agreement exists
on the basis of the prima facie standard of review. The nature of
objections to the jurisdiction of an Arbitral Tribunal on the basis
that stamp duty has not been paid or is inadequate is such as
cannot be decided on a prima facie basis. Objections of this kind
will require a detailed consideration of evidence and submissions
and a finding as to the law as well as the facts. Obligating the
court to decide issues of stamping at the Section 8 or Section 11
stage will defeat the legislative intent underlying the Arbitration
Act.
197. The purpose of vesting courts with certain powers under
Sections 8 and 11 of the Arbitration Act is to facilitate and enable
arbitration as well as to ensure that parties comply with arbitration
agreements. The disputes which have arisen between them remain
the domain of the Arbitral Tribunal (subject to the scope of its
jurisdiction as defined by the arbitration clause). ...
***
220. The above extract indicates that the Supreme Court or High Court at the stage of the appointment of an arbitrator shall "examine the existence of a prima facie arbitration agreement and not other issues". The other issues not only pertain to the validity of the arbitration agreement, but also include any other issues which are a consequence of unnecessary judicial interference in the arbitration proceedings. Accordingly, the "other issues" also include examination and impounding of an unstamped instrument by the Referral Court at the Section 8 or Section 11 14 stage. The process of examination, impounding, and dealing with an unstamped instrument under the Stamp Act is not a time- bound process, and therefore does not align with the stated goal of the Arbitration Act to ensure expeditious and time-bound appointment of arbitrators."
(emphasis in original and supplied)
14. Hindustan Petroleum Corporation Limited v. BCL Secure Premises Pvt. Ltd. reported in 2025 SCC OnLine SC 2746, the Hon'ble Apex Court held as follows:-
"27. As was held in In Re: Interplay Between Arbitration Agreements under Arbitration and Conciliation Act, 1996 & Stamp Act, 1899, since the scope of referral court has to be within the parameter of Section 11 (6-A), the exercise carried thereon is "examination of the existence of an arbitration agreement". While "examination" does not contemplate a laborious or a contested inquiry there is an obligation in the referral court to "inspect and scrutinize" the dealings, if any, between the parties. Para 167 of Interplay (supra) reads as under:--
"167. Section 11(6-A) uses the expression "examination of the existence of an arbitration agreement". The purport of using the word "examination" connotes that the legislature intends that the Referral Court has to inspect or scrutinise the dealings between the parties for the existence of an arbitration agreement. Moreover, the expression "examination" does not connote or imply a laborious or contested inquiry. [P. Ramanatha Aiyar, The Law Lexicon (2nd Edn., 1997) 666.] On the other hand, Section 16 provides that the Arbitral Tribunal can "rule" on its jurisdiction, including the existence and validity of an arbitration agreement. A "ruling" connotes adjudication of disputes after admitting evidence from the parties. Therefore, it is evident that the Referral Court is only required to examine the existence of arbitration agreements, whereas the Arbitral Tribunal ought to rule on its jurisdiction, including the issues pertaining to the existence and validity of an arbitration agreement. A similar view was adopted by this Court in Shin-Etsu Chemical Co. Ltd. v. Aksh Optifibre Ltd., (2005) 7 SCC 234]"
(Emphasis supplied)
28. This principle was reiterated lucidly in SBI General Insurance Company Limited v. Krish Spinning, wherein this Court (speaking through one of us, J.B. Pardiwala J.) observed as under:--
113. The scope of examination under Section 11(6-A) is confined to the existence of an arbitration agreement on the basis of Section 7. The examination of validity of the arbitration 15 agreement is also limited to the requirement of formal validity such as the requirement that the agreement should be in writing.
114. The use of the term "examination" under Section 11(6-A) as distinguished from the use of the term "rule" under Section 16 implies that the scope of enquiry under Section 11(6-A) is limited to a prima facie scrutiny of the existence of the arbitration agreement, and does not include a contested or laborious enquiry, which is left for the Arbitral Tribunal to "rule" under Section 16.
The prima facie view on existence of the arbitration agreement taken by the Referral Court does not bind either the Arbitral Tribunal or the Court enforcing the arbitral award.
115. The aforesaid approach serves a twofold purpose -- firstly, it allows the Referral Court to weed out non-existent arbitration agreements, and secondly, it protects the jurisdictional competence of the Arbitral Tribunal to rule on the issue of existence of the arbitration agreement in depth."
(Emphasis supplied)
15. Under such circumstances, in view of the existence of the dispute resolution clause providing settlement of dispute by arbitration, the application is allowed. The Court finds from the records and the numerous correspondence exchanged between the parties that there was no chance for any amicable resolution of dispute.
16. In the decision of Visa International Ltd. v. Continental Resources (USA) Ltd., reported in (2009) 2 SCC 55, the Hon'ble Apex Court held as follows:-
"38. It was contended that the pre-condition for amicable settlement of the dispute between the parties has not been exhausted and therefore the application seeking appointment of arbitrator is premature. From the correspondence exchanged between the parties at pp. 54-77 of the paper book, it is clear that there was no scope for amicable settlement, for both the parties have taken rigid stand making allegations against each other. In this regard a reference may be made to the letter dated 15-9-2006 from the respondent herein in which it is inter alia stated "... since February 2005 after the execution of the agreements, various meetings/discussions have taken place between both the parties for furtherance of the objective and purpose with which the agreement and the MoU were signed between the parties. Several correspondences have been made by CRL to VISA to help and support its endeavour for achieving the goal 16 for which the abovementioned agreements were executed". In the same letter it is alleged that in spite of repeated requests the petitioner has not provided any funding schedules for their portion of equity along with supporting documents to help in convincing OMC of financial capabilities of the parties and ultimately to obtain financial closure of the project. The exchange of letters between the parties undoubtedly discloses that attempts were made for an amicable settlement but without any result leaving no option but to invoke the arbitration clause."
17. In the decision of Demerara Distilleries Private Limited and Another v. Demerar Distillers Limited reported in (2015)13 SCC 610, the Hon'ble Apex Court held as follows:-
"5. Of the various contentions advanced by the respondent Company to resist the prayer for appointment of an arbitrator under Section 11(6) of the Act, the objections with regard the application being premature; the disputes not being arbitrable, and the proceedings pending before the Company Law Board, would not merit any serious consideration. The elaborate correspondence by and between the parties, as brought on record of the present proceeding, would indicate that any attempt, at this stage, to resolve the disputes by mutual discussions and mediation would be an empty formality. The proceedings before the Company Law Board at the instance of the present respondent and the prayer of the petitioners therein for reference to arbitration cannot logically and reasonably be construed to be a bar to the entertainment of the present application. Admittedly, a dispute has occurred with regard to the commitments of the respondent Company as regards equity participation and dissemination of technology as visualised under the Agreement. It would, therefore, be difficult to hold that the same would not be arbitrable, if otherwise, the arbitration clause can be legitimately invoked. Therefore, it is the objection of the respondent Company that the present petition is not maintainable at the instance of the petitioners which alone would require an in-depth consideration."
18. All objections which are available to the respondent with regard to jurisdiction, arbitrability, admissibility and limitation etc, are kept open, to raise before the learned Arbitrator.
19. Accordingly, the Court appoints Mr. T.S. Sivagnanam, former Chief Justice, High Court at Calcutta, as the learned Arbitrator, to arbitrate 17 upon the disputes between the parties. This appointment is subject to compliance of Section 12 of the Arbitration and Conciliation Act, 1996. The learned Arbitrator shall fix his own remuneration as per the Schedule of the Act.
20. AP-COM/990/2025 is, accordingly, disposed of.
(SHAMPA SARKAR, J.) B.Pal