Sharad Arora & Anr. v. KKH Finvest Pvt Ltd & Ors.

1. The instant petition under Section 9 of the Arbitration and Conciliation Act, 1996 (hereinafter “Arbitration Act”) has been filed on behalf of the petitioners seeking the following reliefs:- "a. Direct the Respondents to withdraw the email dated 31.03.2023 issued by Ravi Burman against Petitioner No. 1 b. Direct/Restrain/Injunct the Respondents from making any disparaging/defamatory/libellous statements against the Petitioners in terms of Clauses 71 and 76 of the MoS dated 09.05.2022; c. Direct the Respondent No. 1 to deposit before this Hon’ble Court/secure a sum of Rs. 2,00,00,000/- towards the “Severance” amount payable to Petitioner No. 1 in terms of the Memorandum of Settlement dated 09.05.2022; d. Direct the Respondent No. 1 to deposit before this Hon’ble Court/secure a sum of Rs. 68,74,838 towards dues outstanding and payable to Jonas Haggard mentioned in Schedule 11 of the Memorandum of Settlement dated 09.05.2022; e. Direct the Respondent No. 1 to deposit before this Hon’ble Court/secure a sum of Rs. 30,90,000/- towards dues outstanding and payable to the Consultants with whom Consultancy Agreements were executed as per the terms of Memorandum of Settlement dated 09.05.2022; f. Restrain the Respondents from taking any other steps or actions adverse to the interests of the Petitioners; g. Pass any other or further orders as this Hon’ble Court may deem fit in the facts and circumstances of the case."

2. Mr. Rajshekhar Rao, the learned senior counsel appearing on behalf of the petitioners submitted that the petitioners are former promoters of respondent no. 2 Company where respondent no. 1 is the strategic investor. It is submitted that a Share Subscription and Share Holders’ Agreement was executed between the respondent no. 1 and the petitioners on 27th May 2016. However, during the period of the Agreement, several disputes arose between the parties.

3. It is submitted that subsequently, attempts were made by both the parties to settle the disputes amicably and accordingly, a Memorandum of Settlement and Share Purchase Agreements was executed on 9th 2022.

4. It is submitted that pursuant to the signing of the Memorandum of Settlement, the respondents have not been abiding by the terms and conditions as well as certain clauses laid down therein. It is further submitted that there is a necessity for the parties to settle the dispute as per the terms and conditions alongwith the relevant clauses of the Memorandum of Settlement, and if in case the dispute does not get resolved amicably, then an arbitrator may be appointed by this Court to settle the same.

5. The learned senior counsel for the petitioners submitted that the petitioners have made an attempt to settle the disputes amicably, however, all attempts have gone in vain. Therefore, it is prayed that both the parties may be directed to abide by the terms and conditions of the Memorandum of Settlement.

6. Mr. Sandeep Sethi and Mr. Arvind Varma, the learned senior counsels for the respondents vehemently opposed the averments raised in the petition.

7. After some length of arguments, the learned senior counsels for the parties conceded that the controversy and disputes raised in the instant matter may be raised before and settled by an arbitrator, for which this Court may pass appropriate directions and appoint an independent sole arbitrator.

8. Heard the learned counsel for the parties and perused the record.

9. The petitioners have approached this Court by way of the instant petition seeking urgent relief against the respondents. Upon perusal of the record as well as the arguments advanced on behalf of the parties, it is evident that there are disputes between the parties, which may be adjudicated and settled by an arbitrator. Moreover, the parties are also in consensus that the disputes between them may be referred to an arbitrator.

10. Therefore, it is evident that there is an Arbitration Clause in existence, that is, Clause 79 of the Memorandum of Settlement executed between the parties, as well as the fact that the disputes between the parties are arbitrable in nature and have arisen from the said Memorandum of Settlement and since, all requisites for reference to an arbitrator are being met, this Court is inclined to appoint an arbitrator to adjudicate upon the disputes between the parties.

11. Accordingly, keeping in view the above facts and circumstances, this Court finds it appropriate to refer the disputes between the parties to a Sole Arbitrator. Hence, the following Order: ORDER

(i) Justice T.S. Thakur, Former Chief Justice of India, is appointed as the sole arbitrator to adjudicate the disputes between the parties which have arisen between the parties;

(ii) The learned sole arbitrator, before entering the arbitration reference, shall ensure the compliance of Section 12(1) of the Arbitration and Conciliation Act, 1996;

(iii) The learned sole arbitrator shall be paid fees as prescribed under the Delhi International Arbitration Centre (Administrative Cost and Arbitrators Fees) Rules, 2018 as amended vide notification dated 15th November, 2022;

(iv) At the first instance, the parties shall appear before the learned sole arbitrator within 10 days from today on a date which may be mutually fixed by the learned sole arbitrator; and