Full Judgment Text
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* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ O.M.P. (T) (COMM.) 105/2023, I.A. 22122/2023
MR. MOHAMMAD ESHRAR AHMED .....Petitioner
Through: Ms. Swati Surbhi and Mohd.
Shahid, Adv.
versus
M/S TYSHAZ BUILDMART INDIA
PRIVATE LIMITED .....Respondent
Through: None.
CORAM:
HON'BLE MR. JUSTICE C. HARI SHANKAR
O R D E R (ORAL)
% 03.09.2024
1. This is a petition under Section 14(1)(a) of the Arbitration and
1
Conciliation Act, 1996 . The petitioner seeks termination of the
mandate of Mr. Vishwanath Pratap Singh, who is presently
conducting arbitration proceedings between the petitioner and the
respondent as the sole arbitrator.
2. Notice of this petition was issued to the respondent. Notice
stands served by speed post as well as by email. The speed post
tracking report records that the package was delivered. The email has
also been addressed at the email ID to which, the respondent
responded with the petitioner.
3. Despite service, no response has been filed to this petition.
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“the 1996 Act”, hereinafter
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Digitally Signed By:AJIT
KUMAR
Signing Date:05.09.2024
15:00:18
Digitally Signed
By:CHANDRASHEKHARAN
HARI SHANKAR
Signing Date:05.09.2024
14:57:24
O.M.P. (T) (COMM.) 105/2023 Page 1 of 7
There is no appearance on behalf of the respondent when the matter is
called out.
4. I have heard Ms. Swati Surbhi, learned Counsel for the
petitioner and have perused the record.
5. In this case, the record reveals that there is, in fact, no
arbitration agreement between the parties within the meaning of
Section 7 of the 1996 Act. Section 7 requires an agreement by the
parties to submit dispute if arise, to arbitration. Section 7(3) requires
an arbitration agreement to be in writing. Section 7(4) delineates the
circumstances in which an arbitration agreement can be said to be in
writing. Of these circumstances, the present case does not attract any
of these circumstances.
6. There is no document, to which the petitioner has either
appended its signature or expressed consent, envisaging resolution of
dispute between the parties by arbitration.
7. Ms. Swati Surbhi has taken me to a notice dated 31 May 2023
addressed by the respondent to the petitioner. The notice refers to
various invoices and proceeds to state thus:
“Respected Sir,
M/s Tyshaz Buildmart India Pvt Ltd having its Corporate Address
at E-90, 7th Cross Avenue, Site-4, UPSIDC, Greater Noida,
UP(DELHI-NCR), G.B.Nagar, Uttar Pradesh-201308 has been in
the regular course of business with your goodself and a dispute has
arisen between the parties to the invoices with regard to non-
payment as per the invoices. As per the terms of invoice M/s
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Digitally Signed By:AJIT
KUMAR
Signing Date:05.09.2024
15:00:18
Digitally Signed
By:CHANDRASHEKHARAN
HARI SHANKAR
Signing Date:05.09.2024
14:57:24
O.M.P. (T) (COMM.) 105/2023 Page 2 of 7
Tyshar Buildmart India Pvt Ltd nominates the two arbitrators for
possible appointment of arbitrator as follows- 1. Mr. Vishwanath
Pratap Singh, Villa No. B-269, Amrapali Leisure Valley, Techzone
4, Sector-1. Greater Noida West-201306; and 2. Mr. Vikas Negi,
House No. 37, Ground Floor, opposite Una Enclave Gate No.2,
Mayur Vihar-1, New Delhi-110091, Email ID: vikas
negi01@rediffmail.com. Mob: 8860029007.
Your goodself is requested to select one arbitrator from the two
names given above as the arbitrator on your behalf and inform us
within three days from the receipt of the present notice, failing
which appropriate arbitration proceedings shall commence, which
your goodself may please note.
Yours Sincerely
Mr. Sameer Suyeb
Authorized Signatory for M/s Tyshaz Buildmart Private Limited
Corporated Address at:
th
E-90, 7 Cross Avenue, Site-4, UPSIDC,
Greater Noida, UP(DELHI-NCR), G.B.Nagar,
Uttar Pradesh-201308
Email: tyshazbuildmart@gmail.com”
8. This was followed by another notice dated 7 June 2023, from
the respondent to the petitioner, which read thus:
“Dated: 07.06.2023
To
Mr. Mohammad Eshrar Ahmed,
C-109/A, Shaheen Bagh, Abul Fazal Enclave Part II,
Jamia Nagar, Okhla,
New Delhi-110025, Mobile No: 8826800994, +971 504507530
Email: cshrar.ahmedi@yahoo.com.cshranieim as
Ref: Letter dated 12.05.2023 & Letter dated 31.05.2023 sent by
M/s Tyshaz Buildmart Private Limited to your goodself
Subject: Appointment of arbitrator deemed to be mutually
appointed with the consent of both the parties
Respected Sir.
That by virtue of the previous Letter dated 31.05.2023, you
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Digitally Signed By:AJIT
KUMAR
Signing Date:05.09.2024
15:00:18
Digitally Signed
By:CHANDRASHEKHARAN
HARI SHANKAR
Signing Date:05.09.2024
14:57:24
O.M.P. (T) (COMM.) 105/2023 Page 3 of 7
were suggested two names of potential arbitrators. As per the
arbitration clause you could either select one name or nominate one
arbitrator of your own choosing within two days of receipt of the
same. That since the period of two days has expired and you have
neither selected one arbitrator nor nominated one arbitrator of your
own choosing, you have waived your right to appoint an arbitrator.
In light of the above, we hereby appoint the following Arbitrator to
resolve the disputes that have arisen between us
Mr. Vishwanath Pratap Singh, Villa No. B-269, Amrapali Leisure
Valley, Techaone 4, Sector-1 Greater Noida West-201306.”
9. It is impossible to discern whether the invocation of arbitration,
in the aforesaid notices, dated 31 May 2023 and 7 June 2023, is in
sink with the arbitration agreement between the parties, for there is in
fact, no such agreement. The only document in which resolution of
dispute by arbitration finds reference are the invoices documents to
which the notice dated 31 May 2023 refers. These invoices, submits
Ms. Swati Surbhi, were received by the petitioner for the first time on
or around 15 May 2023. The invoices have been placed on record.
They do not contain the signature of the petitioner or anything to
indicate that the petitioner had consented to the recitals in the
invoices. Indeed, the invoices are practically unintelligible.
10. It is clear that, even assuming that the recitals in these invoices
envisages resolution of dispute by arbitration, inasmuch as these
invoices have not expressly or by necessary implication been accepted
by the petitioner, they cannot be said to contain any arbitration
agreement between the petitioner and the respondent.
11. No other document envisaging resolution of dispute by
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Digitally Signed By:AJIT
KUMAR
Signing Date:05.09.2024
15:00:18
Digitally Signed
By:CHANDRASHEKHARAN
HARI SHANKAR
Signing Date:05.09.2024
14:57:24
O.M.P. (T) (COMM.) 105/2023 Page 4 of 7
arbitration having ever been made available to the petitioner, it is clear
that there is no arbitration agreement between the parties.
12. Ms. Swati Surbhi has place reliance on the judgment of the
High Court of Madras authored by Sanjay Kishan Kaul, Chief Justice,
as he then was, in NSK India Sales Company Pvt Ltd v Proactive
2
Universal Trading Company Pvt Ltd . Paragraph 17 of the said
decision read thus:
“17. In the sequence of documents issued, it is the respondent who
first issued the purchase order. This does not contain an Arbitration
Clause. The document of delivery of goods also does not contain
an arbitration clause. It is stated to be signed by the ‘gate keeper’
of the respondent. It is only the invoice issued to the petitioner
which contains the arbitration clause and it is stated to have been
simultaneously issued in view of the factum of the same being
interlinked to the goods received. This document neither contains
the declaration in the prescribed form duly signed at the back nor is
there any other endorsement so as to consider it as an acceptance
on the part of the respondent. There is in fact thus no agreement
whatsoever inter se the parties on the issue of the mode of
resolution of the dispute through arbitration and there cannot be an
arbitration clause by implication in any other document. In fact, the
very fact that the respondent has not signed this document would
show the unwillingness of the respondent to accept the arbitration
as a mode of resolution of dispute, to which the petitioner had
never protested.”
13. The position of law enunciated in paragraph 17 of NSK India
Sales Company applies mutatis mutandis , to the case at hand. There is
no arbitration agreement between the parties.
14. Besides, even if, it were to be assumed that there was an
existence of any arbitration agreement, the arbitrator has not been
2
2015 SCC OnLine Mad 14146
Signature Not Verified
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Digitally Signed By:AJIT
KUMAR
Signing Date:05.09.2024
15:00:18
Digitally Signed
By:CHANDRASHEKHARAN
HARI SHANKAR
Signing Date:05.09.2024
14:57:24
O.M.P. (T) (COMM.) 105/2023 Page 5 of 7
appointed by mutual consent. The law in this regard is perfectly clear.
If one party writes to the other, seeking the appointment of the
arbitrator, and the other party does not respond, the first party does not
have a right to unilaterally appoint the arbitrator. The party has, in
such a situation, to approach the Court under Section 11(5) or (6) as
the case may be, for having an arbitrator appointed.
15. Even if it were, therefore, for the sake of argument, to be
assumed that there existed an arbitration agreement between the
petitioner and the respondent, and even if it were to be further
assumed that the notice invoking arbitration dated 31 May 2023 was
correct in law, the remedy with the respondent, on the petitioner not
condescending to arbitration as suggested in the notice dated 31 May
2023, would have been to approach the Court under Section 11(5) to
have an arbitrator appointed. The respondent could not have
unilaterally proceeded to appoint an arbitrator, as it chose to do by the
subsequent communication dated 7 June 2023.
16. Unilateral appointment of an arbitrator is completely
impermissible. The arbitral proceedings consequent on such unilateral
appointment stands vitiated as held by the Supreme Court in Bharat
3
Broadband Network Ltd v United Telecoms Ltd , Perkins Eastman
4
Architects DPC v HSCC (India) Ltd and Haryana Space
5
Application Centre (HARSAC) v Pan India Consultants Pvt Ltd .
3
(2019) 5 SCC 755
4
(2020) 20 SCC 760
5
(2021) 3 SCC 103
Signature Not Verified
Signature Not Verified
Digitally Signed By:AJIT
KUMAR
Signing Date:05.09.2024
15:00:18
Digitally Signed
By:CHANDRASHEKHARAN
HARI SHANKAR
Signing Date:05.09.2024
14:57:24
O.M.P. (T) (COMM.) 105/2023 Page 6 of 7
17. An arbitrator, who is unilaterally appointed, is de jure incapable
of functioning as arbitrator. The Court is justified, therefore, in
terminating his mandate under Section 14(1)(a). Though Section
14(1)(a) ordinarily envisages a substitute arbitrator being appointed
consequent on the mandate of the existing arbitrator being terminated,
I have already held recently in Precitech Enclosures Systems Pvt Ltd
6
v Rudrapur Precision Industries that there is no legal mandate on the
Court to follow up every decision terminating the mandate of the
existing arbitrator by the appointment of a substitute arbitrator.
18. In any case, such a consequential order cannot be passed in the
present case, as there is no arbitration agreement in existence between
the parties.
19. Accordingly, the mandate of Mr. Vishwanath Pratap Singh,
presently acting as arbitrator between the petitioner and the respondent
stands terminated.
20. The petition stands allowed in the aforesaid terms.
C.HARI SHANKAR, J
SEPTEMBER 03, 2024 /aky
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2024 SCC OnLine Del 5364
Signature Not Verified
Signature Not Verified
Digitally Signed By:AJIT
KUMAR
Signing Date:05.09.2024
15:00:18
Digitally Signed
By:CHANDRASHEKHARAN
HARI SHANKAR
Signing Date:05.09.2024
14:57:24
O.M.P. (T) (COMM.) 105/2023 Page 7 of 7