Waiver of Section 11 Petition and Section 21 Notice by Mutual Consent for Arbitrator Appointment

The Petitioner filed a petition under Section 9 of the Arbitration and Conciliation Act, 1996, seeking interim reliefs against the Respondents. Specifically, the Petitioner sought an injunction to restrain the alienation of movable and immovable properties, a status quo order on sister concern properties, a debit freeze on a specific bank account at Punjab Sindh Bank, and a direction for the Respondents to deposit Rs. 20,00,000.

The dispute arose from three Tax Invoices issued in late 2023 regarding unpaid outstanding amounts for goods supplied.

During the hearing, both parties agreed (ad idem) to resolve the disputes through arbitration, waiving certain statutory formalities.

1. Whether the disputes arising out of the specified Tax Invoices should be referred to a Sole Arbitrator in light of the arbitration clause contained therein.

2. Whether the Court can appoint an arbitrator and dispose of a Section 9 petition by treating it as a Section 17 application before the newly appointed tribunal.

The Court applied the Arbitration and Conciliation Act, 1996, specifically Section 9 regarding interim measures by the Court, Section 17 regarding interim measures by an arbitral tribunal, and Section 11 regarding the appointment of arbitrators.

The court relied on the contractual Arbitration Clause (Clause 18) found in the Tax Invoices, which established Delhi as the seat and mandated proceedings under the Act.

Section 21 regarding the commencement of arbitral proceedings, the requirement of which was waived by mutual consent.

The Court observed that the parties reached a consensus to refer the matter to arbitration rather than adjudicating the Section 9 petition on its merits.

The Court identified a valid arbitration agreement in Clause 18 of the Tax Invoices, which governed disputes related to the contract and stipulated Delhi's jurisdiction.

Since the parties were ad idem, the Court dispensed with the Section 21 notice of invocation and the requirement for a formal Section 11 petition for the appointment of an arbitrator.

To ensure the protection of the subject matter, the Court converted the Section 9 petition into a Section 17 application to be decided by the appointed arbitrator, thereby transferring the responsibility for interim adjudication to the tribunal.

The Arbitrator was directed to provide disclosures under Section 12(2) and fees were set as per the Fourth Schedule of the Act, to be shared equally by the parties. The Court expressed no opinion on the merits, leaving all contentions open for the tribunal.