The parties are free to agree on a procedure for appointing the arbitrator or arbitrators: High Court Of New Delhi

 IN THE HIGH COURT OF DELHI AT NEW DELHI Date of decision: 29.10.2021 OFB TECH PVT. LTD. Petitioner Through Mr. Varun Tyagi Adv. ARB.P. 949 2021 KLSR INFRATECH LTD. Respondent Through Mr. Mahfooz Nazki Mr. Amitabh Sinha and Mr. Gowtham Polanki HON BLE MR. JUSTICE SURESH KUMAR KAIT JUDGMENTThe present petition has been filed by petitioner seeking appointment of a Sole Arbitrator under the provisions of Section 11(6) of the Arbitration and Conciliation Act 1996. Petitioner is a Private Limited Company incorporated under the erstwhile provisions of the Companies Act. Petitioner is inter alia engaged in the Business to Business trading and supply of raw materials to Small and Medium Enterprises and other Corporates. Oxyzo Financial Services Pvt. Ltd is a Non Banking Finance Companywhich is ARB.P. 949 2021 a wholly owned subsidiary of the petitioner and is therefore a sister concern of petitioner. On the other hand respondent is also a company incorporated under the erstwhile provisions of the Companies Act. Respondent is inter alia engaged in the business of Infrastructure. According to petitioner a Master Facilities Agreement dated 25.06.2019 was executed between Oxyzo and respondent for providing financing facility to respondent of Rs.10 Crores wherein petitioner signed as a confirming party. Respondent also entered into a Memorandum of Understanding dated 25.06.2019 with petitioner for availing Working Capital Facility of Rs.10 Crores in order to purchase raw material. As per the terms of the aforesaid Agreement dated 25.06.2019 respondent got issued Unconditional Bank Guarantees in favour of petitioner for Rs.12 Crores on 27.06.2019 and Rs.8 Crores on 28.10.2020 which were extended from time to time with last date of expiry being 24.12.2020 and 26.12.2020 Respondent defaulted in its payment schedule in terms of the Memorandum of Understanding dated 25.06.2019 executed with the petitioner as well as the payment schedule agreed with Oxyzo therefore the ARB.P. 949 2021 petitioner issued an email setting out the default on the part of respondent. Due amount was categorically laid down in the said email which for the petitioner and Oxyzo amounted to Rs.22 62 60 592 . Respondent replied back alleging that dues of petitioner have not been cleared as payments have not been received by respondent from the Government due to Covid. However respondent did not dispute the amount and its liability as detailed by the petitioner in its email. Despite various reminders and follow ups the respondent did not respond positively hence the petitioner decided to invoke the Bank Guarantees. Thereafter certain disputes arose between the parties regarding dues amounting Rs.3 31 39 697 with interest. Subsequently petitioner in terms of Clause 14 of the Memorandum of Understanding dated 25.06.2019 invoked arbitration in accordance to which a Sole Arbitrator was to be mutually appointed by the parties but respondent rejected the name of the Arbitrator suggested by petitioner. Therefore the present petition has filed the present petition. Notice issued. Learned counsel for respondent accepts notice and submits that he has no objection if the present petition is allowed and a Sole Arbitrator may be ARB.P. 949 2021 appointed to adjudicate the dispute between the parties subject to all issues to remain open before the learned Arbitrator be appointed. 10. Accordingly Justice R.V.Eswar is appointed the sole Arbitrator to adjudicate the dispute between the parties. 11. The fee of the learned Arbitrator shall be governed by the Fourth Schedule of the Arbitration and Conciliation Act 1996. 12. The learned Arbitrator shall ensure compliance of Section 12 of Arbitration and Conciliation Act 1996 before commencing the arbitration. 13. With aforesaid directions the present petition is accordingly disposed of. OCOTBER 29 2021 JUDGE SURESH KUMAR KAIT) ARB.P. 949 2021 

Summary: Section 11(6) of the Arbitration and Conciliation Act, 1996 speaks about the Sole Arbitrator, were as the present petition was also been filed by the petitioner for seeking the above matter, and the same issue was held in the judgement passed by a single bench judge comprising HON’BLE MR. JUSTICE SURESH KUMAR KAIT, in the matter OFB TECH PVT. LTD V.  KLSR INFRATECH LTD dealt with an issue mentioned above. Petitioner was a person who owned a Private Limited Company incorporated under the erstwhile provisions of the Companies Act. Petitioner is inter-alia engaged in the Business-to-Business (B2B) trading and supply of raw materials to Small and Medium Enterprises and other Corporates. On the other hand, the respondent is also a company incorporated under the erstwhile provisions of the Companies Act. Respondent is inter-alia engaged in the business of Infrastructure. According to the petitioner, a Master Facilities Agreement dated 25.06.2019 was executed between Oxyzo and respondent for providing financing facility to the respondent of Rs.10 Crores, wherein petitioner signed as a confirming party. Wherein Respondent also entered into a Memorandum of Understanding dated 25.06.2019 with petitioner for availing Working Capital Facility of Rs.10 Crores to purchase raw material. Respondent defaulted in its payment schedule in terms of the Memorandum of Understanding dated 25.06.2019 executed with the petitioner as well as the payment schedule agreed with Oxyzo, therefore, the ARB.P. 949/2021 petitioner issued an email, setting out the default on the part of the respondent. Were it was mentioned that the due amount was categorically laid down in the said email, which for the petitioner and Oxyzo amounted to Rs.22,62,60,592/-. Respondent replied alleging that dues of the petitioner have not been cleared as payments have not been received by respondent from the Government due to Covid. However, the respondent did not dispute the amount and its liability as detailed by the petitioner in its email. Thereafter, certain disputes arose between the parties regarding dues amounting to Rs.3,31,39,697/- with interest. Learned counsel for respondent accepts notice and submits that he has no objection if the present petition is allowed and a Sole Arbitrator may be ARB.P. 949/2021  appointed to adjudicate the dispute between the parties subject to all issues to remain open before the learned Arbitrator be appointed.  The court perused the facts and argument’s presented, it thought that- “The learned Arbitrator shall ensure compliance of Section 12 of Arbitration and Conciliation Act, 1996 before commencing the arbitration. 13. With aforesaid directions, the present petition is, accordingly, disposed of”.