Facts
The Petitioner, a provider of serviced office spaces, entered into a Business Centre Agreement dated 29.05.2024 with the Respondent for a suite in Chennai.
Source reference: p. 2The agreement stipulated a monthly license fee of Rs. 1,30,500/-.
Source reference: p. 3Disputes arose following the Respondent’s alleged default in payments from January 2025, totaling approximately Rs. 16,30,477/-.
Source reference: p. 3The Petitioner invoked the arbitration clause (Clause 40) via a Section 21 notice dated 04.08.2025.
Source reference: p. 3Despite being represented by counsel in previous hearings on 20.03.2026 and 15.05.2026, the Respondent failed to file a reply or appear for the final hearing on 17.07.2026.
Source reference: p. 4Issues
1. Whether an independent Sole Arbitrator should be appointed under Section 11(6) of the Arbitration and Conciliation Act, 1996, given the existence of a valid arbitration agreement and the Respondent's failure to participate in the proceedings.
Source reference: p. 2, 4Law Applied
Section 11(6) of the Arbitration and Conciliation Act, 1996, regarding the appointment of arbitrators.
Source reference: p. 2The principle that judicial inquiry under Section 11 is strictly confined to the prima facie examination of the existence of an arbitration agreement, as established in SBI General Insurance Co. Ltd. v. Krish Spinning (2024 SCC OnLine SC 1754).
Source reference: p. 4Section 21 regarding the commencement of arbitral proceedings via notice.
Source reference: p. 3Section 12(2) concerning mandatory disclosures by the arbitrator.
Source reference: p. 5Reasoning
The Court observed that Clause 40 of the parties' agreement explicitly provided for dispute resolution through a mutually appointed sole arbitrator with the seat in Gurgaon and exclusive jurisdiction vested in New Delhi courts.
Source reference: p. 3The Court found that the Petitioner had properly invoked this clause through a Section 21 notice.
Source reference: p. 4Applying the limited scope of review under Section 11, the Court determined there was no impediment to the appointment because the Respondent, despite having multiple opportunities and having previously entered an appearance through counsel, failed to file a reply or contest the existence of the arbitration agreement.
Source reference: p. 4-5Consequently, the Petitioner's claim for approximately Rs. 16,30,477/- met the threshold for reference to adjudication.
Source reference: p. 5Holding
The Court allowed the petition, holding that a prima facie arbitration agreement exists and remains undisputed.
The Court appointed Mr. Yajur Sharma, Advocate, as the Sole Arbitrator to adjudicate the disputes under the aegis of the Delhi International Arbitration Centre (DIAC).
Source reference: p. 5The arbitrator was directed to file disclosures under Section 12(2) and enter reference within two weeks.
Source reference: p. 5All rights to raise objections regarding arbitrability and jurisdiction before the arbitrator were reserved for the parties.
Source reference: p. 5Original Court PDF
M/S Vatika Business Centres Private LimitedvsGood Food Trade Private Limited
Click to open original judgment
Original judgment, available to read, download and summarize on LawLens.in