Full Text
HIGH COURT OF DELHI
Date of Decision: 07.11.2024
OYO WORKSPACES INDIA PRIVATE LIMITED .....Petitioner
Through: Mr. D. Acharya, Mr. Samarth Mehrotra, Mr. Sagar Pradhan, Advs.
Through:
JUDGMENT
1. The present petition has been filed under Section 11 of the Arbitration and Conciliation Act, 1996 (hereinafter ‘the A&C Act’) seeking appointment of a Sole arbitrator for adjudicating the disputes between the parties.
SACHIN DATTA, J. (ORAL.)
2. Disputes between the parties have arisen under a Membership Agreement dated 20.09.2023 (hereinafter the ‘Membership Agreement’) between the petitioner and the respondent, whereby the petitioner granted rights to the respondent to occupy 32 cabin seats at their co-working space namely, ‘Innov[8] CLC Tower’, addressed at Plot 146, CLC Tower, Sector 44, Gurugram, Haryana -122003, (hereinafter referred to as ‘the property’).
3. The Respondent failed to make the payments in lieu of the monthly charges, as also the charges for using the amenities provided at the said property, and the monthly charges applicable for the unexpired lock-in period, amounting to a total sum of Rs. 15,87,078/-, along with the applicable TDS.
4. Disputes having arisen between the parties, the petitioner invoked the arbitration clause incorporated in the Membership Agreement vide Notice issued to the respondent on 04.07.2024. The relevant stipulation is as under:-
5. The respondent is stated to have been served with the notice via email on unicorn.uis@gmail.com and info@eduuis.com
6. The scope of the present proceedings is confined to ascertaining whether there exists an arbitration agreement between the parties. In this regard, it has been held by the Supreme Court in In Re: Interplay between Arbitration Agreement under the Arbitration and Conciliation Act, 1996 and the Indian Stamp Act, 1899, Curative Petition (C) No. 44/2023 decided on 14.12.2023, as under:-. Notice was also sent to the respondent via speed post, however, the same returned unserved with the endorsed remarks “Item Returned No such person in the address”. In this regard, an affidavit of service has been filed by the petitioner on 28.10.2024 vide diary no. 4893919.
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.”
7. Furthermore, in SBI General Insurance Co. Ltd. v. Krish Spinning, 2024 INSC 532, the Supreme Court has observed as under:
. 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 timebound process, and therefore does not align with the stated goal of the Arbitration Act to ensure expeditious and time-bound appointment of arbitrators. […]” (Emphasis supplied) Re: Interplay (supra). xxx xxx xxx
123. The power available to the referral courts has to be construed in the light of the fact that no right to appeal is available against any order passed by the referral court under Section 11 for either appointing or refusing to appoint an arbitrator. Thus, by delving into the domain of the arbitral tribunal at the nascent stage of Section 11, the referral courts also run the risk of leaving the claimant in a situation wherein it does not have any forum to approach for the adjudication of its claims, if it Section 11 application is rejected.”
8. In the present case, from a bare perusal of Clause 27 of the Membership Agreement, as placed on record, it is prima facie discernible that a valid Arbitration Agreement exists between the parties.
9. In the circumstances, there is no impediment to appointing an independent Sole Arbitrator for adjudicating the disputes between the parties, as prayed for.
10. Accordingly, Mr. Narinder Pal Singh, Advocate (Mob. No.: +91
9311010090) is appointed as the Sole Arbitrator to adjudicate the disputes between the parties.
11. The respondent shall be at liberty to raise preliminary objections regarding jurisdiction and/or arbitrability, if any, which shall be decided by the sole arbitrator, in accordance with law.
12. The learned Sole Arbitrator may proceed with the arbitration proceedings subject to furnishing to the parties the requisite disclosure as required under Section 12 of the A&C Act.
13. 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.
14. It is clarified that this Court has not expressed any opinion on the merits of the respective contentions of the parties, or the merits of the matter.
15. The present petition stands disposed of in the above terms.
SACHIN DATTA, J NOVEMBER 7, 2024