1 arbap186-10 vai IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION ARBITRATION APPLICATION NO.186 OF 2010 Encore Hotels Pvt. Ltd. ....Applicant V/s. Arete Hospitality Pvt. Ltd. ....Respondent Mr.Vishal Kanade i/b Desai & Diwanji for the Applicant Ms.Rita K. Joshi for the Respondents. CORAM : S.J. VAZIFDAR, J. DATE : 22ND FEBRUARY, 2011. P.C. :- 1. This is an application under section 11 of the Arbitration and Conciliation Act, 1996. 2. The parties had admittedly entered into a franchise agreement dated 4.12.2007 under which the applicant had granted the respondent a franchise in respect of its brand name “Khandani Rajdhani”. It is also admitted that disputes and differences have arisen between the parties in respect of and relating to the suit agreement. Article 17 thereof contains an arbitration agreement. 3. It is contended that the agreement was entered into on the basis of certain misrepresentations as a result whereof, the respondent has in fact suffered a loss including in respect of the investments made by it pursuant to the said agreement. The allegations in this regard are not such as to prevent the parties from referring the disputes to arbitration. 2 arbap186-10 4. The objection as to the territorial jurisdiction of this Court is also not sustainable. The applicant’s submission that the agreement was executed in Mumbai is denied by the respondent. In any event, the amounts due under the agreement are liable to be paid in Mumbai. Promises to pay the amounts and offers to make part payment were communicated in Mumbai, where the applicant carries on business. A material part of the cause of action has therefore arisen in Mumbai. Added to that is the fact that clause 17.11 expressly provides that “ The Courts in Mumbai shall have the exclusive jurisdiction to try and dispose of any dispute arising out of or under this Agreement”. 5. Clause 17 of the agreement however, contemplates the constitution of an arbitral tribunal comprising of three arbitrators. The applicant by its letter dated 16.8.2010 invoked the arbitration clause and nominated the arbitrator. However, both the parties have requested the appointment of a sole arbitrator keeping in mind the costs and convenience. This however, is without prejudice to the respondent’s rights and contentions to the effect that the matter ought not to be referred to arbitration at all. In other words, the respondent is agreeable to the appointment of a sole arbitrator instead of a panel of three arbitrators only in the event of it being held that the disputes are bound to be referred to arbitration. 6. Accordingly, the arbitration application is disposed of by appointing Mr.Snehal Shah, an advocate of this Court, as a sole arbitrator. This order however, is stayed upto and including 15.4.2011.