Delhi HC Appoints Sole Arbitrator In Adidas India-Distributor Dispute Over Alleged Unpaid Contractual Dues

The petitioner filed a petition under Section 11 of the Arbitration and Conciliation Act, 1996, seeking resolution of disputes arising from a Distribution Agreement dated 19 April 2018, including alleged non-payment of contractual dues.

The agreement’s Clause M provided for arbitration by a sole arbitrator, with New Delhi as the place of arbitration and the Delhi High Court having jurisdiction.

At the hearing, both parties agreed that the dispute could be referred to arbitration, and neither disputed the existence of a valid arbitration clause.

Under Section 11 of the Arbitration and Conciliation Act, 1996, the Court’s enquiry is confined to examining the prima facie existence of an arbitration agreement.

The arbitration clause in Clause M of the parties’ agreement provided for arbitration by a sole arbitrator and specified New Delhi as the place of arbitration.

The arbitrator must furnish the requisite disclosure under Section 12(2) of the Act.

The Court found that Clause M contained an arbitration agreement and that its existence was undisputed.

Since the parties were also ad idem that the dispute could be referred to arbitration, the Court found no impediment to appointing a sole arbitrator.

Consistent with the limited scope of Section 11 review, the Court left the parties free to raise objections—including those concerning impleadment, arbitrability, and jurisdiction—before the arbitrator for determination in accordance with law.

The arbitration is to proceed under the rules and aegis of the Delhi International Arbitration Centre, with the arbitrator’s fees as per its schedule.

The arbitrator is to enter upon the reference within three weeks and furnish the required disclosure under Section 12(2) within three weeks of entering upon it.

The petition was disposed of accordingly.