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Modi-Mundipharma Beauty Products Private Limited v/s S.M Enterprises Through Its Proprietor & Another

    ARB.P. No. 1140 of 2021

    Decided On, 07 January 2022

    At, High Court of Delhi


    For the Petitioner: Saksham Tyagi, Advocate. For the Respondents: Ashwani Kumar, Abhay Kakkar, Advocates.

Judgment Text

Judgment (Oral)

The hearing has been conducted through video conferencing.

1. Present petition has been filed under Section 11(5) of the Arbitration and Conciliation Act, 1996 seeking appointment of arbitrator to adjudicate the disputes between the parties.

2. Pertinently, petitioner is a private limited company incorporated under the provisions of the Companies Act, 1956 and is engaged in the business of marketing, selling of cosmetic and personal care products.

3. According to the petitioner, respondent no.1 is a proprietorship firm and engaged in the business of trading of cosmetic products and running and managing the sale of various products. Respondent no.2 is the sole proprietor of respondent no.1.

4. It is averred that petitioner executed a Memorandum of Understanding with the respondents on 27.07.2017 for selling the products of the petitioner under the brand name of “Revlon” & “Street Wear” for a period of 2 years commencing from 27.07.2017 till 26.07.2019 which could be renewed for further term of 12 months. On 25.08.2017, petitioner company had entered into a lease deed with Mr.Manoj Kumar Lilani, Mr.Dalip Kumar Lilani and Mr.Sanjay Kumar Lilani, owners of the premises bearing Shop No.J-15 AB, Lajpat Nagar-II, New Delhi for operating a store under the brand name “Revlon” for selling cosmetic products.

5. Counsel for the petitioner submits that petitioner- Company contacted the Respondents and its personnel on various occasions for ensuring strict compliance of the MoU but on one pretext or the other, Respondents deliberately have not complied with the same. Consequently, petitioner issued a notice dated 02.07.2019 to the respondents about continuous breach of the binding terms and conditions of the MoU and in terms of clause 5 of the said MoU called upon the respondent to rectify the breaches within 15 days, failing which the said MoU would stand terminated. Though, respondents replied but to no avail. Accordingly, MoU stood terminated as no rectification of the breaches was done by the respondents. Aggrieved by the illegal actions of the respondents and upon termination of the MoU, petitioner served a notice of vacation for the premises in question and calling upon the respondents to pay rental of the premises which they have been occupying illegally since 24.07.2019 to 13.04.2021, which amounts to Rs.64,73,055/-.

6. Thereafter, petitioner sent a legal demand cum arbitration notice to the respondents under Clause 11 of the said MoU to vacate the premise in question and clear the outstanding amount due. Moreover, petitioner filed a petition under Section 9 of the Arbitration and Conciliation Act, 1996 in Delhi District Court, Saket wherein both the parties appeared and upon the submission of respondents’ counsel, petitioner nominated Mr.Rahul Khosla, Advocate as the sole arbitrator under the Arbitration and Conciliation Act, 1996.

7. During the course of hearing, counsel for the petitioner submitted that petitioner and respondents appeared before the arbitrator through virtual mode and on 10.11.2020, respondents filed an application under Section 14 r/w Section 12 & 16 of the Arbitration and Conciliation Act, 1996 raising objections to the learned Sole Arbitrator just before the second hearing before the tribunal. As per the order dated 13.04.2021, respondents handed over possession of the premises to the owners of the premises. On 26.09.2021, learned Tribunal allowed the abovesaid application of the respondents and tribunal was dissolved. Hence, the present petition has been filed.

8. Learned counsel for respondents has objected to the averments made in the present petition, however, has submitted that the disputes are arbitrable and he has no objection if this Court appoints a sole arbitrator.

9. In view of the above the present petition is allowed. Accordingly, Mr. Balbir Singh, District & Session Judge (Retd.), (Mobile: 9416791008) is appointed sole Arbitrator to adjudicate the dispute be

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tween the parties. 10. The fee of the learned Arbitrator shall be governed by the Fourth Schedule of the Arbitration and Conciliation Act, 1996. 11. The learned Arbitrator shall ensure compliance of Section 12 of Arbitration and Conciliation Act, 1996 before commencing the arbitration. 12. The petition stands disposed of accordingly. 13. A copy of this order be sent to the learned Arbitrator for information.