Delhi High Court
Pansari Developers Limited vs Dhani Loans And Services Limited & ... on 20 September, 2021
$~15
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ ARB.P. 921/2021 & I.A. 12229/2021
PANSARI DEVELOPERS LIMITED ..... Petitioner
Through Ms. Eshna Kumar, Mr. Anup
Jain and Udit Gupta, Advs.
versus
DHANI LOANS AND SERVICES LIMITED & ORS.
..... Respondents
Through Ms. Surbhi Mehta, Adv.
CORAM:
HON'BLE MR. JUSTICE C. HARI SHANKAR
O R D E R (ORAL)
% 20.09.2021
1. This is a petition under Section 11(6) of the Arbitration and
Conciliation Act, 1996, for reference of the dispute between the
parties.
2. The dispute arises out of a Loan Agreement dated 30th June,
2018 between the petitioner and the respondents. The grievance of the
petitioner, against the respondents, is that the respondents were
charging interest, on the amounts lent to the petitioner at rates higher
than those stipulated in the loan agreement. This interest, according to
the petitioner, is returnable by the respondent. The respondents dispute
the claim.
3. The loan agreement contains the following arbitration clause:
Signature Not Verified
Digitally Signed By:SUNIL
Signing Date:25.09.2021
10:48:37
"ARTICLE 12: ARBITRATION
12.1 This Loan Documents is/shall be governed by Indian
laws and the courts at New Delhi shall have exclusive
jurisdiction relating to any matter/issue under or pursuant to
the Loan Documents. Notwithstanding anything to the
contrary, if any dispute/disagreement/differences ("Dispute")
arise between the Parties (including any Borrower(s) during
the subsistence of the Loan Documents and/or thereafter, in
connection with, inter alia, the validity, interpretation,
implementation and/or alleged breach of any provision of the
Loan Documents, jurisdiction or existence/appointment of the
arbitrator or of any nature whatsoever, then, the Dispute shall
be referred to a sole arbitrator who shall be appointed by the
Lender only. In any circumstance, the appointment of the sole
arbitrator by the Lender shall be and shall always be deemed
to be the safe means for securing the appointment/nomination
of the sole arbitrator, without recourse to any other alternative
mode of appointment of the sole arbitrator. The place of the
arbitration shall be New Delhi or such other place as may be
notified by the Lender and the arbitration proceedings shall be
governed by the Arbitration & Conciliation Act, 1996 (or any
statutory re-enactment thereof, for the time being in force) and
shall be in the English language. The award shall be binding
on the Parties subject to the applicable laws in force and the
award shall be enforceable in any competent court of law;"
4. In view of the law laid by the Supreme Court in Perkins
Eastman Architects DPC v. HSCC (India) Ltd. 1, Bharat Broadband
Network Ltd. v. United Telecom Ltd 2 and TRF Limited v. Energo
Engineering Projects Ltd. 3, the afore-extracted arbitration clause is
unenforceable, as it confers exclusive jurisdiction, to appoint the
arbitrator, on one of the parties to the agreement.
2019 SCC Online SC 1517
(2019) 5 SCC 755
(2017) 8 SCC 377
Signature Not Verified
Digitally Signed By:SUNIL
Signing Date:25.09.2021
10:48:37
5. Ms. Mehta, learned Counsel for the respondents, merely
requests that the arbitrator be selected from one of the arbitrators on
the panel maintained by the respondents.
6. As the parties between themselves have not been in a position to
agree on the arbitrator, the task of appointing the arbitrator devolves
on the court under Section 11(6).
7. The arbitration clause is, as has correctly been pointed out by
learned Counsel for the petitioner, is in the teeth of the law laid in
Perkins Eastman1, Bharat Broadband2. and TRF Limited3 as well as
Section 12(5) of the 1996 Act and is, consequently, unenforceable.
8. The amount in dispute, I am informed, is to the tune of around ₹
1 crore.
9. Accordingly, I appoint Mr. M.C Gupta, Additional District
Judge (retd.).(Mob: 9910384727), as the arbitrator to arbitrate on the
dispute between the parties.
10. The learned Arbitrator would be entitled to charge fees in
accordance with the Fourth Schedule of the 1996 Act, or as agreed in
consultation with the parties.
11. The arbitrator would file requisite disclosure under Section
12(2) of the 1996 Act within a week of entering on the reference.
Signature Not Verified
Digitally Signed By:SUNIL
Signing Date:25.09.2021
10:48:37
12. This petition stands allowed in the aforesaid terms, with no
orders as to costs.
C. HARI SHANKAR, J.
SEPTEMBER 20, 2021
dsn
Signature Not Verified
Digitally Signed By:SUNIL
Signing Date:25.09.2021
10:48:37
