Sole Arbitrator Cannot Be Appointed Solely By One Party: High Court Of New Delhi

 IN THE HIGH COURT OF DELHI AT NEW DELHI Date of decision: 26.10.2021 ARB.P. 1049 2021 & I.A.13814 2021 PRET STUDY BY JANAK FASHIONS PRIVATE LIMITED Through Ms.Vanika Gupta Adv. Petitioner DHANI LOANS AND SERVICES LIMITED Respondent Through Ms.Sangeeta Sondhi Ms.Ruchi Gour Narula & Mr.Gorang Goyal Advs. HON BLE MR. JUSTICE SURESH KUMAR KAIT JUDGMENTThe relief sought in the present petition before this Court is to appoint sole Arbitrator under Section 11(6) of the Arbitration and Conciliation Act 1996 to adjudicate the dispute between the parties. Pertinently petitioner is engaged in the business of retail of garments all over the country under its brand “Study by Janak” and has become one stop shop for luxury Indian designer wear and couture for its customers. On the other hand respondent is a Non Banking Financing Companyon 13.01.2021 wherein it was agreed to release the said property subject of payment of Rs.14 83 95 000 . On 15.01.2021 petitioner made the payment and requested the respondent to release the charge against the property situated at Karol Bagh in respect of the conditional NOC wherein as per the NOC respondent was to adjust Rs.14 78 09 904 towards the principal of loan facility of Rs.15 crores and an amount of Rs.5 85 096 would be left as principal outstanding amount which had to be paid by the petitioner. Thereafter respondent had illegally deducted EMI of Rs.2 52 088 from ARB.P. 1049 2021 petitioner’s bank account since 05.02.2021 and on 23.06.2021 issued a notice under Section 13(2) of the SARFAESI Act. At the hearing learned counsel for petitioner submitted that petitioner has already invoked arbitration vide notice dated 19.08.2021 under clause 12 of the agreement and prayed this Court to appoint an Arbitrator to adjudicate the disputes between the parties which is not disputed by learned counsel for respondent. However the claims made in the present petition are disputed and the same can be adjudicated by an Arbitrator. Accordingly Mr. JusticeVinod Goelis appointed sole Arbitrator to adjudicate the disputes between the parties. The arbitration shall be conducted under the Delhi International Arbitration Centre(Internal Management) Rules and Delhi International Arbitration CentreRules 2018. The learned Arbitrator shall ensure compliance of Section 12 of Arbitration and Conciliation Act 1996 before commencing the arbitration. The present petition is accordingly disposed of. ARB.P. 1049 2021 10. A copy of this order be sent to DIAC and the learned Arbitrator for JUDGE SURESH KUMAR KAIT) OCTOBER 26 2021 ab ARB.P. 1049 2021 

Summary: The present petition before this Court is to appoint sole Arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996, 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 PRET STUDY BY JANAK FASHIONS PRIVATE LIMITED V. DHANI LOANS AND SERVICES, LIMITED dealt with an issue mentioned above. The petitioner was a person who was engaged in the business of retail of garments all over the country under its brand “Study by Janak” and which become the one-stop-shop for luxury Indian designer wear and couture for its customers. On the other hand, the respondent is a Non-Banking Financing Company (NBFC). According to the petitioner, He got sanctioned three loan facilities ARB.P. 1049/2021 from the respondent of Rs.15 crores vide agreement dated 25.04.2018 and Rs.1.60 crores vide agreement dated 28.04.2018 and Rs.10 lakhs vide agreement dated 28.04.2018. And also Petitioner got sanctioned a loan facility of Rs.15 crores against the property from the respondent and the loan was on the adjustable interest rate for 144 months by way of 144 equated monthly instalments starting from 05.06.2018 till August 2030. As per the repayment schedule dated 13.07.2018, with the total number of EMIs too. Were rate of interest was also increased from 12% p.a. to a fixed rate of interest of 12.20% p.a. w.e.f. 05.07.2018. Meanwhile, the petitioner made a written complaint to the respondent for an arbitrary and wrongful increased rate of interest without prior ARB.P. 1049/2021  intimation or consent of the petitioner. However, the respondent did not respond to the abovesaid complaint of the petitioner. It is further submitted that in November 2020, the petitioner again approached the respondent for releasing of one of three properties situated at Karol Bagh, New Delhi secured against the three loans, respondent issued a conditional No Objection Certificate (NOC) on 13.01.2021 wherein it was agreed to release the said property subject of payment of Rs.14,83,95,000/-. On 15.01.2021, the petitioner made the payment and requested the respondent to release the charge against the property situated at Karol Bagh. Learned counsel for the petitioner submitted that petitioner has already invoked arbitration vide notice dated 19.08.2021 under clause 12 of the agreement and prayed this Court to appoint an Arbitrator to adjudicate the disputes between the parties, which is not disputed by learned counsel for the respondent. Accordingly, Mr Justice (Retd.) Vinod Goel is appointed sole Arbitrator to adjudicate the disputes between the parties. The court perused the facts and argument’s presented, it believed that- “The arbitration shall be conducted under the Delhi International Arbitration Centre (DIAC). The fee of the Arbitrator shall be following the schedule of fees prescribed under the Delhi International Arbitration Centre (DIAC) (Internal Management) Rules and Delhi International Arbitration Centre (Administrative Cost and Arbitrators’ Fees) Rules, 2018. The learned Arbitrator shall ensure compliance with Section 12 of the Arbitration and Conciliation Act, 1996 before commencing the arbitration. The present petition is accordingly disposed of”.