MONEYWISE FINANCIAL SERVICES PVT LTD v. JAS ENTERPRISES THROUGH ITS PROPRIETOR SH DAVE

1. The present petition has been filed under section 11 of the Arbitration and Conciliation Act, 1996 (hereinafter referred as ‘the A&C Act’) seeking appointment of a sole arbitrator to adjudicate the disputes between the parties.

2. The disputes between the parties have arisen in the context of a Master Loan Agreement dated 24.06.2019 executed between the petitioner and the respondents, in terms of which the respondent no.1 is a borrower, whereas the proprietor of respondent no.1 and respondent no.2 are coborrowers.

3. As per the said agreement, the petitioner disbursed a loan of Rs. 15,00,000/- (Rupees Fifteen Lakhs only) to the respondents. The loan amount was payable into 36 equal installments of Rs. 54,984/- (Fifty-Four Thousand Nine Hundred and Eighty-Four only).

4. Dispute/s have arisen between the parties on account of alleged default on the part of the respondents in paying the requisite installments. The respondents failed to make the payment despite being granted opportunities to clear the outstanding dues.

5. The arbitration clause in the Agreement between the parties, is in the following terms: “10.[1] Arbitration: Any disputes, differences, controversies and questions directly or indirectly arising at any time hereafter between the Parties or their respective representatives or assigns, arising out of or in connection with this Agreement (or the subject matter of this Agreement), including, without limitation, any question regarding it existence, validity, interpretation, construction, performance, enforcement, rights and liabilities of the Parties, or termination (“Dispute”), shall be referred to a sole arbitrator duly appointed by the Lender. The language of the arbitration shall be English. The seat of the arbitration shall be at New Delhi and the language of proceedings shall be English. The award rendered shall be in writing and shall get out the reasons for the arbitrator’s decision. The costs and expenses of the arbitration shall be borne equally by each Party with, each party paying for its own fees and costs including attorney fees, except as may be determined by the arbitration tribunal. Any award by the arbitration tribunal shall be final and binding.”

6. Disputes having arisen between the parties, a loan recall/termination notice dated 03.07.2024 was issued by the petitioner followed by a notice invoking arbitration on 15.07.2024. However, the respondents failed to respond to the same.

7. In the above circumstances, the petitioner has approached this Court, through the present petition, seeking the appointment of a sole arbitrator to adjudicate the dispute.

8. The present proceedings, notice was issued by the Court on 10.09.2024. An affidavit of Service dated 06.09.2024 has been filed by the petitioner. It has been stated that the petitioner has taken the requisite steps to serve the respondents at their known address/es. Respondents have been duly served via Speed Post and Courier. It has also been stated that the respondent no. 1 has also been served via email at eept.finance@gmail.com.

9. In the circumstances, the present petition is taken up for hearing and disposal, despite no appearance on behalf of the respondents.

10. Since the existence of the arbitration clause is evident from a perusal of the Master Loan Agreement, there is no impediment to constituting an arbitral tribunal for adjudicating the disputes between the parties, as mandated in terms of the judgments of the Supreme Court in SBI General Insurance Co. Ltd. v. Krish Spinning, 2024 INSC 532 and Interplay between Arbitration Agreements under the Arbitration & Conciliation Act, 1996 & the Indian Stamp Act, 1899, In re, 2023 SCC OnLine SC 1666.

11. Further, in terms of the judgments of the Supreme Court in Perkins Eastman Architects DPC v. HSCC (India) Ltd (2020) 20 SCC 760, TRF Limited v. Energo Engineering Projects Ltd, (2017) 8 SCC 377 and Bharat Broadband Network Limited v. United Telecoms Limited, 2019 SCC OnLine SC 547, it is incumbent on this Court to appoint an independent sole arbitrator to adjudicate the disputes between the parties.

12. Accordingly, Mr. Kapil Datta, Advocate (Mob. No.: +91

9811135509) is appointed as the Sole Arbitrator to adjudicate the disputes between the parties.

13. The respondents shall be at liberty to raise preliminary objections as regards arbitrability/jurisdiction, if any, which shall be decided by the arbitrator, in accordance with law.

14. The learned Sole Arbitrator may proceed with the arbitration proceedings subject to furnishing to the parties requisite disclosure as required under Section 12 of the A&C Act.