Delhi High Court
Jorawer Singh vs Black Pepper Hospitality ... on 24 December, 2020
$~3(Original side)
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ ARB.P. 815/2020 & I.A. 12710/2020-Ex
Decided on: 24th December,2020
JORAWER SINGH ..... Petitioner
Through: Mr. Vijay K. Gupta, Adv.
versus
BLACK PEPPER HOSPITALITY ANDEVENTS PVT LTD
..... Respondent
Through: Ms. Mayanka Dhawan, Adv.
CORAM:
HON'BLE MR. JUSTICE C. HARI SHANKAR
JUDGEMENT (O R A L)
% 24.12.2020
(Video-Conferencing)
1. This petition, under Section 11 (6) of the Arbitration &
Conciliation Act, 1996, calls upon this court to appoint a sole
arbitrator, to arbitrate the disputes between the parties.
2. The dispute, as set out in the petition, and without prejudice to
the respondent's rights to contest all or any of the allegations against it,
maybe summarized thus.
3. On 20th August, 2019, a Management Service Agreement was
executed between the petitioner and the respondent, whereunder the
respondent was to run and manage the banquet hall of the petitioner.
The petitioner was entitled to a monthly management fee of ₹
16,51,000/-, with effect from 1st September 2019.
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4. Monthly management fee was paid, by the respondent to the
petitioner till March, 2020 but was not paid for the period April to
June, 2020.
5. Vide e-mail dated 20th June 2020, the petitioner called upon the
respondent to pay the arrears of management fee as on 30th June,
2020.
6. The respondent, vide reply e-mail dated 2nd July 2020, pleaded
force majeure, and sought to invoke the clause, to that effect, contained
in the Management Service Agreement.
7. On that ground, the respondent also sought to revoke the
Management Service Agreement which, according to the petitioner,
was impermissible, as the agreement contemplated a 4 ½ year lock-in
period, which would expire only on 28th February, 2024. The
petitioner, accordingly, responded to the e-mail dated 2nd July, 2020 of
the respondent, vide reply e-mail dated 10th July, 2020.
8. Attempts at amicable resolution of the disputes failed.
9. Eventually, it is alleged that the respondent cancelled the
Management Service Agreement and stopped rendering services
thereunder, to the petitioner, with effect from 22nd September, 2020.
10. The petitioner alleges that an amount of ₹ 5 lakhs was paid by
the respondent to the petitioner, with an undertaking to pay the balance
amount shortly thereafter.
11. It is also averred that, on 22nd September 2020, the respondent
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handed over peaceful possession of the premises to the petitioner,
except for one DJ set and certain chaat counters.
12. The petitioner alleges that, in respect of goods, utensils and
articles provided to the respondent, which were not available in the
premises on the date when the premises were handed over to the
petitioner, the respondent is liable to pay an amount of ₹3,26,962/- to
the petitioner. This amount, according to the petition, is acknowledged
by the respondent.
13. The petition further alleges that, in sum, the respondent agreed
to pay ₹4,79,911/- to the petitioner, along with applicable Goods and
Services Tax (GST) of ₹45,00,000/-. The respondent, however, did
not pay the amounts which it undertook to pay to the petitioner and had
not deposited the requisite GST.
14. Premised on the above facts, the petition alleges that the
respondent is bound to pay an amount of ₹ 26,39,211/- to the
petitioner.
15. The petitioner issued a legal notice to the respondent on 12th
October 2020, calling on the respondent to pay the aforesaid amount of
₹ 26,39,211/-.
16. In a response dated 4th November, 2020, the respondent has
denied its liability.
17. In these circumstances, the petition averts that arbitrable
disputes have arisen between the petitioner and the respondent. Ms.
Mayanka Dhawan, learned counsel for the respondent, does not dispute
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this proposition, though she submits that the allegations against the
respondent are incorrect and that the respondent does not owe any
amount to the petitioner.
18. The Management Service Agreement contemplates resolution of
the disputes between the petitioner and the respondent by way of
arbitration, without any prior pre-arbitral dispensation being envisaged
there in. The relevant covenant, of the Management Service
Agreement, Article 9.1 of the Management Service Agreement, which
so provides, reads as under:
"9.1 Arbitration: all disputes arising under this agreement
shall be resolved by a sole arbitrator, in accordance with the
provisions of the Arbitration and Conciliation Act, 1996, the
sole arbitrator shall be appointed by the owner alone. The seat
of arbitration shall be at New Delhi and the language shall be
English. However, in case of dispute the service provider will
have a right to give a notice to owner for appointment of
arbitrator by himself."
(Emphasis as in original)
19. It is asserted that, vide letter dated 2nd November, 2020,
addressed to the respondent, the petitioner invoked the afore-extracted
arbitration clause, appointing an advocate as the sole arbitrator to
decide the dispute between the parties. This name was not agreeable to
the respondent, who, vide response dated 7th November, 2020, sought a
discussion with respect to the arbitrator who would arbitrate on the
disputes. In view thereof, the petitioner has withdrawn the proposal to
appoint the advocate named in the notice dated 2nd November, 2020.
20. Learned counsel for the parties request this court, ad idem, to, in
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the circumstances, appoint a sole arbitrator to arbitrate on the disputes
between the parties.
21. Article 9.1 of the Management Service Agreement, which grants
complete power to the petitioner to appoint the arbitrator, obviously
cannot be enforced, in view of Section 12(5) of the Arbitration &
Conciliation Act, 1996 read with the Seventh Schedule thereto and the
judgments of the Supreme Court in Perkins Eastman Architects BPC
v. HSCC (India) Limited 1 and Bharat Broadband Network Ltd. v.
United Telecoms Ltd. 2 as well as the of this court in JMC Projects
(India) Ltd. v. Indure Pvt. Ltd. 3. As arbitrable disputes exist between
the parties, and the parties have not been able to agree to the name of
an arbitrator, to arbitrate on the disputes.
22. In these circumstances, learned counsel for the parties, ad idem,
request this court to appoint a sole arbitrator to arbitrate on the disputes
between the parties.
23. In these circumstances, this court disposes of the present petition
by appointing Mr. Padam Kant Saxena, Former Additional District and
Sessions Judge, Delhi as the sole arbitrator, to arbitrate on the
aforesaid disputes between the parties. The contact details of the
learned sole arbitrator are as under:
Phone No.: 9910384668.
Address: B 155, Mount Kailash, East of Kailash, New
Delhi 110065.
Email-id: [email protected]
2019 SCC OnLine SC 1517
(2019) 5 SCC 755
MANU/DE/1609/2020
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24. The learned counsel for the parties, or the parties themselves,
may contact the learned sole arbitrator, at the aforesaid contact details,
within 48 hours of receipt of a copy of this order, which would be
emailed to learned counsel for the parties, by the Registry as soon as it
is corrected and finalized. The learned sole arbitrator would be entitled
to charge fees in accordance with the Fourth Schedule of the
Arbitration & Conciliation Act, 1996 or any other amount as agreed
between the parties and the learned sole arbitrator.
25. The learned sole arbitrator would enter on the reference and,
within one week thereof, would furnish the requisite disclosure under
section 12(2) of the 1996 Act.
26. With the aforesaid observations, this petition stands disposed of.
C. HARI SHANKAR, J
DECEMBER 24, 2020/ss
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