M/S VINUCOM AUTOCHOICE CARS PVT. LTD. v. M/S CARS 24

1. The present petition under Section 11(6) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act') has been filed by the petitioner seeking the following prayers: "(i) Appoint a sole arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996 for taking the necessary measures and adjudicating the disputes arising under the Credit Facility Agreement dated 25.09.2019 between the parties;

(ii) Pass any such other order(s) as this Hon 'ble Court may deem fit and proper in the facts and circumstances of the present case and in the interest of justice."

2. Learned counsel appearing on behalf of the petitioner submitted that the petitioner is private limited company with its registered office at

Floor, 2nd C Main, East of NGEF, Kasthuri Nagar, Bengaluru, Kamataka - 560043. It is further submitted that respondent is company duly incorporated under provisions of the companies Act, 2013 engaged in the business a revolving finance/credit facility to the business entities for purchasing the pre-owned cars with the purpose of selling them to the end-customers. It is further submitted on behalf of the petitioner that the petitioner entered into a Credit Facility Agreement dated 25th September, 2019 by virtue of which Dealership ID bearing NO. 58803 was issued to the petitioner.

3. It is further asserted that the petitioner has not missed any payments to the respondent since the very initiation of the aforementioned credit facility agreement and that all loans advanced to the petitioner have been repaid within the agreed-upon grace period of 60 days. Furthermore, it is claimed that the respondent arbitrarily blocked the petitioner's account even though there was no failure on the part of the petitioner to make the outstanding payments.

4. Learned counsel appearing on behalf of the petitioner further apprised this Court that the arbitration clause, i.e., Clause 15.2, has been invoked by the respondent vide legal notice dated 15th November, 2022 claiming an outstanding amount of Rs. 1,72,58,812/- (Rupees One Crore Seventy Two Lac Fifty Eight Thousand Eight Hundred an Twelve only) and thereby suggested names of three arbitrators for the purpose of arbitration proceedings in order to adjudicate upon the disputes between the parties.

5. Learned counsel appearing on behalf of the petitioner submitted that by way of its letter dated 15th November, 2022, the factum with respect arbitral nature of dispute between the parties has been duly accepted by the respondent.

6. In view of the foregoing submissions, the learned counsel for the petitioner invoked the jurisdiction of this Court by virtue of Section 11 of the Act for appointment of an independent sole arbitrator for redressal of disputes between the parties.

7. Heard the learned counsel for the petitioner and perused the record.

8. On the first call, learned counsel for the respondent appeared and took pass over for the purpose of taking instructions from the respondent as well as for perusal of the paper book, which was supplied to him during the course of arguments by learned counsel for the petitioner. At request of learned counsel for the respondent, the matter was passed over.

9. On the second call, despite taking a pass over, learned counsel for the respondent has chosen not to appear before this Court.

10. After perusal of the documents on the record, it is revealed that the arbitration clause has been invoked by the respondent vide notice dated 15th November, 2022 as per the Clause 15.[2] of the agreement dated 25th September, 2019 for appointment of the Sole Arbitrator to adjudicate the arbitral disputes between the parties. In reply to the aforesaid notice, the petitioner refuted the allegations made by the respondent and also as per Section 21 of the Act, invoked the arbitration clause vide its letter dated 7th December, 2022, to which there is no response received on behalf of the respondent till date. Since both the parties have invoked the arbitration clause under Section 21 of the Act and it is an admitted fact that there are arbitral disputes between the parties as well as there is an arbitration Clause 15.[2] of the said agreement, therefore, this Court is inclined to allow the prayer made in the instant petition.

11. Hence, after perusal of the documents on the record, contentions made in the instant petition as well as keeping in view the arguments advanced by learned counsel for the petitioner, this Court is inclined to refer the disputes/disagreements between the parties to arbitration. Hence, the following order: ORDER

(i) Since there is an arbitration clause/agreement governing the parties, thus, the Delhi International Arbitration Centre is directed to appoint a sole arbitrator from the panel of arbitrators to adjudicate the disputes between the parties which have arisen under the Credit Facility Agreement dated 25th September, 2019, under the aegis of the Delhi International Arbitration Centre;