Arbitration clause to be invoked even in the absence of response from the defendant: Delhi High Court

 IN THE HIGH COURT OF DELHI AT NEW DELHI ARB.P. 300 2021 PINE LABS PRIVATE LIMITED ..... Petitioner Through Ms. Gurmeet Bindra Adv. ICP DIGITAL TECHNOLOGY PRIVATE LIMITED Through None ..... Respondent HON BLE MR. J USTICE C .HARI SHANKAR O R D E R29.07.2021 C .HARI SHANKAR J . ARB.P. 300 2021 Despite notice having been issued in this matter there is no response from the respondent either today or on the last date of hearing. There has been no appearance on behalf of the respondent on either of the dates. As such the Court has heard Ms. Bindra learned counsel for the petitioner and proceeds to dispose of the matter. This petition under Section 11(6) of the Arbitration and Conciliation Act 1996seeks appointment of an ARB.P. 300 2021 arbitrator to arbitrate on the disputes between the parties. The substratum of the dispute is set out in paras B to I of the petition which are for ready reference reproduced thus: the Respondent approached Petitioner “B. That Petitioner is engaged in the business of providing software and information technology solutions which includes information technology and software solutions for loyalty programs gift card and pre paid petro automation point of sales and credit card and cash payment network of terminals at PCQs and retailers and other ancillary services in the business of offering services in retail automation retail payment solution and transaction processing in India. C. That deployment of the devices supplied by Petitioner and availing its services in order to offer EMI schemes in relation to the goods sold at various merchant outlets to cardholders. Accordingly from time to time Agreements were executed between the Respondent and Petitioner. Certified copy of the Agreements dated 01.05.2017 01.06.2017 10.07.2017 and 18.06.2018 are annexed herewith as document P 2which were duly received by the Respondent No. Document No. Invoice Amount Due Date INV091712009551 1 88 224.00 31.12.2017 15.01.2018 64 900.00 30.11.2018 15.12.2018 INV091812004016 1 55 377.00 11.12.2018 26.12.2018 64 900.00 31.12.2018 15.01.2019 64 900.00 31.01.2019 15.02.2019 17 594.00 31.01.2019 20.02.2019 ARB.P. 300 2021 07 10 620.00 31.01.2019 20.02.2019 21 240.00 31.01.2019 20.02.2019 12 980.00 28.02.2019 20.02.2019 64 900.00 28.02.2019 20.02.2019 Copy of the Invoices are annexed herewith as document P 3 It is further submitted that despite receipt of the said E. invoices the Respondent paid only a sum of Rs.27 869 Rupees Twenty Seven Thousand Eight Hundred Sixty Nine Only) as against total outstanding amount of Rs.6 65 635 Rupees Six Lakhs Sixty Five Thousand Six Hundred and Thirty Five Only) thus a sum of Rs.6 37 766 is due and payable by the Respondent. It is pertinent to state that in terms of the Agreement(s) between the parties the Respondent is not only liable to pay the said invoice amount but also interest @1.5% p.m. for the delayed period i.e. from the due date until paid. F. It is stated that since the Petitioner had diligently performed its part of obligations under the said Agreements and had made the delivery of the work to the satisfaction of the Respondent therefore apparently there is no reason as to why Petitioner should not be paid its outstanding dues. Thus prima facie non payment of the above invoices is illegal and unwarranted. G. That the Petitioner on numerous occasions vide various written communications requested the Petitioner to release the payment due to Petitioner under the aforesaid Agreements and various purchase orders issued by the Respondent. It is stated that despite vide E mail dated 10.10.2018 the Respondent acknowledged the aforesaid dues and assured to pay the same on or before 26.11.2018 it failed to do so. Further vide E mails dated 27.11.2018 and 21.02.2019 the Respondent once again assured the Petitioner that the said outstanding amount will be duly paid. However despite said assurances the Respondent failed to pay the same. Emails dated 10.10.2018 27.11.2018 ana 21.02.2019 are annexed herewith as document P 4despite its assurance the Petitioner sent a Legal Notice via Speed Post Courier and E mail dated 13.11.2019 calling upon the the total outstanding amount of Rs.6 37 766 days of one Party s receipt of a written notice of dispute from the other Patty all disputes arising in connection with this Agreement shall then be settled by a sole arbitrator mutually agreed by the ARB.P. 300 2021 Parties within 30 days after receipt of written request for reference to arbitration by one of the Parties in accordance with the Arbitration and Conciliation Act 1996 with its statutory modifications enactments or reenactments thereto. 10.2 If the Parties cannot agree on a sole arbitrator within the aforesaid 30 day period each Party shall nominate an arbitrator and the two selected arbitrators shall agree on a third arbitrator. 10.3 The place of arbitration shall be New Delhi and the language to be used in the proceeding shall be English. The Parties agree that the arbitration award shall be binding on them and that the arbitral award shall be the sole and exclusive remedy regarding any claims counterclaims or issues presented to the Notice invoking arbitration was sent by the petitioner to the respondent on 13th November 2019. There is no response from the respondent till date. In view of the aforesaid the Court disposes of the present petition by appointing Ms. Esha Mazumdar Advocate as arbitrator to arbitrate on the disputes between the parties. The learned arbitrator is entitled to charge fees in accordance with the Fourth Schedule to the 1996 Act. 10. The learned arbitrator would file the requisite disclosure under Section 12(2) of the 1996 Act within a week of entering on reference. ARB.P. 300 2021 11. The petition stands disposed of in the aforesaid terms. JULY 29 2021 C. HARI SHANKAR J. ARB.P. 300 2021 

Summary: The existence of arbitration clause in a contract offers guarantee to the parties that in the case of dispute, it shall be solved amicably however if one party fails to comply and adhere to the clause, this provides the right to seek its invocation in court. This was held in the judgment passed by a single bench judge comprising HON’BLE MR. JUSTICE C .HARI SHANKAR, in the matter of PINE LABS PRIVATE LIMITED V. ICP DIGITAL TECHNOLOGY PRIVATE LIMITED (ARB.P. 300/2021) dealt with an issue where the petitioner filed for invocation of the arbitration clause, for which the petitioner had earlier sent notice to the respondent for which there has been no response to date. In the present case, the Respondent had approached Petitioner’s business of providing software and information technology solutions, for deployment of the devices supplied by Petitioner and availing its services in order to offer EMI schemes in relation to the goods sold at various merchant outlets to cardholders. Agreements were executed between the Respondent and Petitioner dated 01.05.2017,01.06.2017, 10.07.2017 and 18.06.2018. Under these Agreements, for the devices deployed and services rendered to the Respondent, Petitioner raised following invoices that amounted to Rs.6,65,635/-  which were duly received by the Respondent. Despite the receipt of the said invoices, the Respondent paid only a sum of Rs.27,869/- as against total outstanding amount of Rs.6,65,635/-, thus a sum of Rs.6,37,766/-  is due and payable by the Respondent. Under the terms of the Agreement(s) between the parties, the Respondent is not only liable to pay the said invoice amount but also interest @1.5% p.m. for the delayed period i.e. from the due date until paid. Petitioner had diligently performed its part of obligations under the said Agreements and had made the delivery of the work to the satisfaction of the Respondent, thereby giving no reason for the respondent’s default. Thus, prima facie the non-payment of the above invoices is illegal and unwarranted. The Petitioner tried its best to resolve the aforesaid dispute, by calling upon the Respondent in writing vide e-mails and also requesting the Respondent orally to resolve the same. The Petitioner had further requested the Respondent to give its consent for the appointment of ‘Mr. Atul Batra’ as the sole Arbitrator to adjudicate the aforesaid dispute regarding recovery of the aforesaid amount. The Respondent neither paid the amount nor made any effort to settle the aforesaid dispute despite receipt of the said Legal Notice by the Respondent. After hearing both the parties The hon’ble Delhi High court allowed the petition and accordingly appointed Ms. Esha Mazumdar, Advocate as arbitrator to arbitrate on the disputes between the parties under Section 11(6) of the Arbitration and Conciliation Act, 1996. The court also held that the arbitrator would file the requisite disclosure under Section 12(2) of the 1996 Act within a week of entering on reference.