𝐕𝐚𝐥𝐢𝐝𝐢𝐭𝐲 𝐨𝐟 𝐚𝐧 𝐀𝐫𝐛𝐢𝐭𝐫𝐚𝐭𝐢𝐨𝐧 𝐂𝐥𝐚𝐮𝐬𝐞 𝐬𝐭𝐢𝐩𝐮𝐥𝐚𝐭𝐢𝐧𝐠 𝐫𝐞𝐟𝐞𝐫𝐫𝐚𝐥 𝐨𝐟 𝐝𝐢𝐬𝐩𝐮𝐭𝐞𝐬 𝐭𝐨 𝐚𝐧 𝐞𝐯𝐞𝐧 𝐧𝐮𝐦𝐛𝐞𝐫 𝐨𝐟 𝐀𝐫𝐛𝐢𝐭𝐫𝐚𝐭𝐨𝐫𝐬 (Delhi High Court)

M/s. Talbros Sealing Materials Pvt. Ltd. Vs M/s. Slach Hydratecs Equipments Pvt. Ltd (May 2024)

The parties to dispute entered into a contract for the supply of machinery by the Respondent company. Upon emergence of dispute, the Petitioner filed section 11 application seeking for appointment of arbitrator.

The dispute resolution clause as follows:
“Clause 8 Arbitration Clause – 𝑇ℎ𝑒 𝑜𝑟𝑑𝑒𝑟 𝑝𝑙𝑎𝑐𝑒𝑑 𝑜𝑛 𝑢𝑠 𝑤ℎ𝑒𝑡ℎ𝑒𝑟 𝑑𝑖𝑟𝑒𝑐𝑡𝑙𝑦 𝑜𝑟 𝑡ℎ𝑟𝑜𝑢𝑔ℎ 𝑜𝑢𝑟 𝑏𝑟𝑎𝑛𝑐ℎ 𝑜𝑓𝑓𝑖𝑐𝑒𝑠 𝑠ℎ𝑎𝑙𝑙 𝑖𝑛 𝑎𝑙𝑙 𝑟𝑒𝑠𝑝𝑒𝑐𝑡 𝑏𝑒 𝑐𝑜𝑛𝑠𝑖𝑑𝑒𝑟𝑒𝑑 𝑎𝑠 𝑎𝑛 𝐼𝑛𝑑𝑖𝑎𝑛 𝐶𝑜𝑛𝑡𝑟𝑎𝑐𝑡 𝑎𝑛𝑑 𝑎𝑙𝑙 𝑑𝑖𝑠𝑝𝑢𝑡𝑒𝑠 𝑎𝑛𝑑 𝑑𝑖𝑓𝑓𝑒𝑟𝑒𝑛𝑐𝑒𝑠 𝑎𝑟𝑖𝑠𝑖𝑛𝑔 𝑜𝑢𝑡 𝑜𝑓 𝑡ℎ𝑒 𝑐𝑜𝑛𝑡𝑟𝑎𝑐𝑡 𝑜𝑟 𝑡𝑜𝑢𝑐ℎ𝑖𝑛𝑔 𝑡ℎ𝑒 𝑠𝑎𝑚𝑒 𝑏𝑒 𝑟𝑒𝑓𝑒𝑟𝑟𝑒𝑑 𝑡𝑜 𝑡𝑤𝑜 𝑎𝑟𝑏𝑖𝑡𝑟𝑎𝑡𝑜𝑟𝑠 𝑜𝑛𝑒 𝑡𝑜 𝑏𝑒 𝑎𝑝𝑝𝑜𝑖𝑛𝑡𝑒𝑑 𝑏𝑦 𝑒𝑎𝑐ℎ 𝑝𝑎𝑟𝑡𝑦 𝑓𝑜𝑟 𝑡ℎ𝑒 𝑑𝑒𝑐𝑖𝑠𝑖𝑜𝑛. 𝑇ℎ𝑒 𝑣𝑒𝑛𝑢𝑒 𝑜𝑓 𝐴𝑟𝑏𝑖𝑡𝑟𝑎𝑡𝑖𝑜𝑛 𝑠ℎ𝑎𝑙𝑙 𝑏𝑒 𝑎𝑡 𝐷𝑒𝑙ℎ𝑖………….

The Respondent objected to the jurisdiction of Delhi High Court, asserting that both the supply of machinery and the parties were situated in Faridabad. Also, alleged that the Arbitration clause is not a valid one as it envisages reference of disputes to two arbitrators, contrary to the provisions of Arbitration Act.

Pronouncement of the Court :

👉 A perusal of the arbitration clause shows that the parties intended to resolve their through arbitration. Hence the prime facie question to appoint the arbitrator is satisfied.

✍ The Court also with reference to the judgments of Narayan Prasad Lohia vs. Nikunj Kumar Lohia and Others, [(2002) 3 SCC 572] and Sara International Ltd. vs. Arab Shipping Co. (P) Ltd., [2009 SCC OnLine Del 122] 𝙧𝙚𝙞𝙩𝙚𝙧𝙖𝙩𝙚𝙙 𝙩𝙝𝙖𝙩 𝙖𝙧𝙗𝙞𝙩𝙧𝙖𝙩𝙞𝙤𝙣 𝙘𝙡𝙖𝙪𝙨𝙚 𝙞𝙨 𝙣𝙤𝙩 𝙞𝙣𝙫𝙖𝙡𝙞𝙙𝙖𝙩𝙚𝙙 𝙢𝙚𝙧𝙚𝙡𝙮 𝙤𝙣 𝙩𝙝𝙚 𝙜𝙧𝙤𝙪𝙣𝙙 𝙩𝙝𝙖𝙩 𝙩𝙝𝙚 𝙣𝙪𝙢𝙗𝙚𝙧 𝙤𝙛 𝙖𝙧𝙗𝙞𝙩𝙧𝙖𝙩𝙤𝙧𝙨, 𝙖𝙨 𝙥𝙚𝙧 𝙩𝙝𝙚 𝙖𝙧𝙗𝙞𝙩𝙧𝙖𝙩𝙞𝙤𝙣 𝙘𝙡𝙖𝙪𝙨𝙚, 𝙬𝙚𝙧𝙚 𝙖𝙣 𝙚𝙫𝙚𝙣 𝙣𝙪𝙢𝙗𝙚𝙧.

Henceforth, the Court allowed the section 11 application by the petitioner and appointed an arbitrator.