M/S SHREE RATHNAM RESTAURANTS PVT. LTD. v. M/S VRINDA VAN FOODS & ANR.

1. The present petition has been filed on behalf of the petitioner under section 11 of the Arbitration and Conciliation Act, 1996 seeking appointment of arbitrator for adjudication of disputes arising qua the Franchisee Agreement dated 31st March, 2017.

2. Learned counsel appearing on behalf of the petitioner submitted that the petitioner is a company duly incorporated under the Companies Act, 1956, having its registered office at C-3, 2nd Floor, Malviya Nagar, New Delhi-110017. It is further submitted that the respondent No. l is a proprietorship firm having its principal place of business at 126, Railway Road, Mayur Lane More, Kothi, Hapur.

3. It has been submitted on behalf of the petitioner that the petitioner, who is the owner of the trade mark "SHREE RATHNAM" and other artistic and patterns designating/publishing the Intellectual Property in the aforementioned names/titles, is, among other things, in the business of managing and operating a chain of vegetarian restaurants on both a national and international level. Moreover, the petitioner has registered exclusive rights to the aforementioned trademark, which have been periodically renewed.

4. It has been submitted on behalf of the petitioner that the respondents and the petitioner entered into a Franchise Agreement on 31st March, 2017, with the intention of running and operating the franchise restaurant under the trade name "SHREE RATHNAM" for a finite period of nine years, subject to strict adherence to the provisions of the agreement.

5. It has been submitted on behalf of the petitioner that subsequent to signing of the said agreement, the respondent deliberately failed to act in accordance with the said Franchisee Agreement. It is further submitted that the respondent concealed true and correct sales figures from all means, payment of agreed franchise commission and committed various other defaults.

6. It has been submitted on behalf of the petitioner that owing to the continuous breaches and defaults by the respondents, the petitioner was forced to terminate the said Franchise Agreement after giving notice of termination vide email dated 30th September, 2021.

7. Learned counsel appearing on behalf of the petitioner further submitted that being aggrieved by the acts of the respondents, the petitioner was constrained to invoke the Arbitration Clause, i.e., Article VIII of the Franchisee Agreement dated 31st March, 2017, vide notice dated 18th August, 2022 to refer the disputes arising between the parties to an independent Sole Arbitrator.

8. Learned counsel appearing on behalf of the respondent vehemently opposed the averments made in the instant petition however, has fairly conceded to the arbitral nature of the disputes arising between the parties. It is further submitted that the respondent has no objection if the dispute between the parties arising out of the said Franchisee Agreement is referred to a Sole Arbitrator for adjudication.

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

10. As agreed on behalf of the parties, this Court finds it appropriate to refer the disputes and disagreements between the parties arising qua the Franchisee Agreement dated 31st March, 2017 by appointing an independent Sole Arbitrator to adjudicate upon the same. Hence, the following order: ORDER

(i) Mr. Ashok Kumar Singh, Senior Advocate is appointed as a sole arbitrator to adjudicate the disputes between the parties which have arisen under the Franchisee Agreement dated 31st March, 2017;

(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 (DIAC) (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;

(v) All contentions of the parties are expressly kept open.