Delhi High Court
Vipin Luthra & Anr. vs Doit Smart Hospitality India Pvt ... on 3 July, 2023
$~J-4
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Judgment reserved on: 30.05.2023
% Judgment pronounced on: 03.07.2023
+ ARB.P. 192/2023
VIPIN LUTHRA & ANR. ..... Petitioners
Through: Mr. Gautam Khazanchi, Adv.
alongwith Mr. Subham Jain,
Adv.
versus
DOIT SMART HOSPITALITY INDIA PVT LTD & ANR.
..... Respondents
Through: Mr. Vikram Sobti, Adv.
(through VC)
CORAM:
HON'BLE MR. JUSTICE SACHIN DATTA
JUDGMENT
SACHIN DATTA, J.
1. The present petition under Section 11 of the Arbitration and
Conciliation Act, 1996 (the "A&C Act") seeks constitution of the Arbitral
Tribunal to adjudicate the dispute between the parties.
2. The disputes between the parties have arisen in the context of a Share
Purchase Agreement ("SPA") dated 17.04.2018, entered into between the
petitioners and the respondents. In terms of the said SPA, the petitioners,
inter alia, agreed to sell/transfer their shareholding in respondent no.2 to
respondent no.1 for certain consideration.
Signature Not Verified
By:RADHA BISHT
Signing Date:03.07.2023
17:23:12
3. The respondents have placed on record the original duly stamped
SPA.
4. The petitioners, inter alia, claim alleged failure on part of the
respondents to pay "adjusted consideration" equivalent to potential tax
refunds in terms of Clause 3.1 (b) read with Clause 5.1.3 and other clauses
of the SPA, and also alleged outstanding loan amount of Rs. 44,00,000/-
extended by petitioner no. l to respondent no.2. It is also averred that
respondent no.1 being the purchaser was also obligated to facilitate the
repayment of the entire loans standing in the accounts of respondent no.2.
5. The aforesaid Share Purchase Agreement dated 17.04.2018 contains
an arbitration agreement in the following terms:
"12. Governing Law, Arbitration and Submission to Jurisdiction
12.1 Governing Law and Jurisdiction: This agreement and the documents
to be entered into pursuant to it, save as expressly referred to therein, and any
obligations arising out of or in connection with this Agreement and such
documents (including non-contractual obligations) shall be governed by and
construed in accordance with the laws of Republic of India. The Courts at
Delhi shall have exclusive jurisdiction.
12.2 Dispute Resolution: If any dispute, difference, controversy or claim
arises out of, in relation to or in connection with this Agreement (including but
not limited to any question regarding its existence, validity, interpretation,
breach or termination) (a "Dispute"), it shall be referred, upon written notice
(a „Dispute Notice") given by one Party to the other, to a final and binding
arbitration.
12.3. Any Dispute which has not been satisfactorily resolved within thirty
(30) days of the Dispute Notice being issued shall be referred to arbitration.
12.4 The arbitration shall be conducted by an arbitral tribunal consisting
of three (3) arbitrators, with each disputing party appointing 1 (one) arbitrator
and the 2 (two) arbitrators so appointed jointly appointing 1 (one) more
arbitrator, who shall act as the third and presiding arbitrator.
12.5 The arbitration proceedings will be carried out in accordance with
the Indian Arbitration and Conciliation Act, 1996 and the seat of arbitration
Signature Not Verified
By:RADHA BISHT
Signing Date:03.07.2023
17:23:12
will be New Delhi, India. The arbitration proceedings will be conducted in the
English language.
12.6. Each Party shall pay its own fees, disbursements and other charges,
including legal fees, except as may be determined by the arbitral tribunal. The
arbitral tribunal have the power to award interest on any sum awarded
pursuant to the arbitration proceedings and such sum would carry interest, if
awarded, until the actual payment of such amount.
12.7 Save as required by Law or regulation, no Party or person involved in
any way in the creation, coordination or operation of the arbitration of any
Dispute may disclose the existence, content or results of the Dispute or any
arbitration conducted under this Agreement in relation to that Dispute to a
third party."
6. The petitioners invoked the aforesaid arbitration agreement vide
notice dated 01.11.2022, whereby the petitioners named its nominee
arbitrator and called upon the respondents to name its nominee in terms of
the aforesaid clause. Without prejudice to the same, the petitioners also
sought waiver of the requirement of constitution of a three-member arbitral
and requested the respondents to consider appointment of the arbitrator
suggested by the petitioners as the Sole Arbitrator. No reply thereto is stated
to have been sent by the respondents.
7. Learned counsel for the respondents whilst disputing the merits of the
contentions of the petitioners does not dispute the existence of the arbitration
agreement between the parties. Learned counsel strongly contends that the
claim of the petitioners with respect to the alleged outstanding loan amount
of Rs. 44,00,000/- is negated on a bare reading of the SPA, and being
outside the scope thereof, and hence, non-arbitrable.
8. Since the existence of the arbitration agreement is not disputed,
respective counsel for the parties are in agreement that a sole arbitrator be
appointed to adjudicate the disputes between the parties subject to the
Signature Not Verified
By:RADHA BISHT
Signing Date:03.07.2023
17:23:12
respondents' right to raise preliminary objections as regards
jurisdiction/arbitrability/maintainability of claim(s) before the Arbitrator.
9. Accordingly, Ms. Preeti Goyal, Advocate (Mobile No.9821761687) is
appointed as the Sole Arbitrator to adjudicate the disputes between the
parties.
10. The respondents shall be entitled to raise preliminary objections as
regards jurisdiction/arbitrability /maintainability of the claims which shall be
decided by the arbitrator, in accordance with law, before adjudicating the
claim(s) on merits. It is directed accordingly.
11. The learned Sole Arbitrator may proceed with the arbitration
proceedings subject to furnishing to the parties requisite disclosures as
required under section 12 of the A&C Act; and in the event there is any
impediment to the appointment on that count, the parties are given liberty to
file an appropriate application in this court.
12. The learned Sole Arbitrator shall be entitled to fee in accordance with
Fourth Schedule to the A&C Act; or as may otherwise be agreed to between
the parties and the learned Sole Arbitrator.
13. Parties shall share the arbitrator's fee and arbitral costs, equally.
14. All rights and contentions of the parties in relation to the
claims/counter-claims are kept open, to be decided by the learned Arbitrator
on their merits, in accordance with law.
15. Needless to say, nothing in this order shall be construed as an
expression of this court on the merits of the case.
16. The present petition stands disposed of in the above terms.
JULY 03, 2023/DK SACHIN DATTA, J
Signature Not Verified
By:RADHA BISHT
Signing Date:03.07.2023
17:23:12
