Section 9 petition treated as Section 17 application upon consensual reference of disputes to arbitration.

The Petitioner filed a petition under Section 9 of the Arbitration and Conciliation Act, 1996 ("the Act"), seeking interim measures of protection

The dispute originated from a Master Franchise Agreement dated 10.07.2024 ("the Agreement") regarding a 'Cafe By Soul' outlet in Gurugram

The Petitioner sought various reliefs, including a status quo on operations, restraints against tampering with intellectual property (trademarks/signage), and the disclosure of POS sales data and bank statements

Clause 16.6 of the Agreement provided for arbitration as the dispute resolution mechanism with the seat in Delhi

During the hearing, both parties reached a consensus to refer the disputes to arbitration rather than adjudicating the Section 9 petition on its merits

1. Whether a Sole Arbitrator should be appointed to resolve the disputes arising from the Master Franchise Agreement based on the mutual consent of the parties?

2. Whether a petition filed under Section 9 of the Act can be converted into an application under Section 17 to be decided by the appointed Arbitrator?

The court primarily applied Section 9 of the Arbitration and Conciliation Act, 1996, which provides for interim measures by the Court

It relied on the principle of party autonomy and mutual consent to dispense with separate proceedings under Section 11 for the appointment of an arbitrator

The court also invoked Section 17 of the Act, which empowers an arbitral tribunal to grant interim measures

Section 12(2) regarding the mandatory disclosures required by an arbitrator to ensure independence and impartiality

The Court noted that since the parties were ad idem regarding the referral of their disputes to arbitration, the formal requirement of initiating a separate Section 11 petition was unnecessary and would only delay proceedings

Although the value of the claims (approximately Rs. 2.5 crores) was contested, the Court focused on the agreed-upon dispute resolution clause

To ensure judicial efficiency and preserve the parties' right to interim relief, the Court converted the Section 9 petition into an application under Section 17

This allows the appointed arbitrator to adjudicate the specific prayers for injunctions and disclosures once the reference is entered, rather than having the Court decide them on merits at this stage

It directed that the present Section 9 petition be treated as an application under Section 17 of the Act, to be decided by the Arbitrator after entering the reference

The parties were ordered to share the arbitral costs and fees equally

The Court clarified that it expressed no opinion on the merits of the underlying controversy, leaving all rights and contentions open for the Arbitrator’s determination