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

The petitioner has filed the present petition under the provisions of Section 11(6) of the Arbitration and Conciliation Act, 1996 seeking appointment of sole Arbitrator, 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, dealt with an issue mentioned above M/S. ARKAS BIOCON PRIVATE V. M/S. KASHINATH AGRO INDUSTRIES PRIVATE LIMITED dealt with an issue mentioned above

Petitioner is a Company, who had entered into a Lease Agreement dated 09.05.2018 with the respondent, a private limited company, along with manufacturing shed, including plant, machinery and equipment, ARB.P.930/2021 constructed thereon, was leased to the petitioner for eleven months on a monthly rental of Rs.4,50,000/- with applicable GST.

According to the petitioner, the said plant was taken on lease from the respondent for the manufacture of Liquid Glucose, Malto Dextrin Powder and the by-product being cattle feed, which was to be manufactured by the petitioner from broken rice by an enzymatic process, They also mentioned that petitioner had furnished security deposit of Rs.27,00,000/-In the Lease Agreement dated 09.05.2018.

According to the petitioner, the delay in the refurbishment of the equipment was solely attributable to the petitioner and since ARB.P.930/2021 respondent failed to complete the refurbishment of the plant within 45 days of the execution of the lease agreement, the respondent has no right to demand any amount.

Meanwhile, the petitioner claims that when the respondent failed to make the payments raised by the petitioner, a legal notice dated 03.03.2021 was issued to the respondent calling upon to make the payment of ARB.P.930/2021 Rs.1,97,77,000/- and notified that if the respondent fails to make the payment within 14 days of receipt of the notice. However, since the petitioner did not receive any communication from a respondent in response to its legal notice dated 03.03.2021, it has approached this Court seeking the appointment of Arbitrator.

Given the above, keeping in mind that disputes inter se parties have to be resolved in terms of Article 17 of the Lease Agreement dated 09.05.2018, which is not disputed, this petition is allowed.

The court perused the facts and argument’s presented, it believed that- “The fee of the learned Arbitrator shall be governed by the Fourth Schedule of the Arbitration and Conciliation Act, 1996. The learned Arbitrator shall ensure compliance of Section 12 of Arbitration and Conciliation Act, 1996 before commencing the arbitration. The petition is accordingly disposed of”.

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Judgment Reviewed by: Mandira BS 

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