(Prayer: This Original Petition has been filed under Section 11 of the Arbitration and Conciliation Act, 1996 praying to appoint sole Arbitrator for resolving the disputes between the parties.)
1. This petition is filed seeking appointment of an arbitrator to adjudicate the disputes between the petitioner and the respondents. The petitioner is the lender. The respondents approached the petitioner in December 2020 in order to avail bill discounting facilities. Upon execution of relevant documents in such regard, it is stated that a sum of Rs.6,50,00,000/- was sanctioned to the 1st respondent under sanction letter dated 21.12.2020. According to the petitioner, the tenure of the facility was for a period of one year and the credit period was 90 days from the date of the relevant invoice. The petitioner alleges that the respondents did not pay amounts due in terms of the loan agreement. Consequently, it is stated that a sum of about Rs.4,25,00,000/- is due and payable as on 19.07.2021. Since disputes have arisen with regard to non-payment of dues, the petitioner invoked the arbitration clause and issued notice dated 14.09.2021. In this regard, the petitioner cites Clause 27 of the loan agreement, which is set out below:
All disputes, differences and/or claims arising out this Agreement whether during its subsistence or thereafter shall be settled by Arbitration in accordance with the provisions of the Arbitration and Conciliation Act, 1996 and shall be referred to the sole arbitration of an arbitrator nominated by the Company. The award given by such arbitrator shall be final and binding on all parties to this Agreement. In the event of an appointed arbitrator dying or being unable or unwilling to act as arbitrator for any reason, the Company, on such death of the arbitrator or his inability or unwillingness to act as arbitrator shall appoint another person to act as arbitrator. Such person shall be entitled to proceed with the reference from the stage it is left by his predecessor. The venue of arbitration proceeding shall be at Chennai at the Registered Office of the Company which is presently at 'DARE HOUSE', No.2 (old No.234), NSC BOSE ROAD, PARRYS, CHENNAI – 600 001. The Borrower agrees to a fast track arbitration to be disposed of within 90 days from the date of reference.”
2. Upon being served, all the respondents are represented through counsel. Without prejudice to their contentions on the merits of the dispute, the respondents agreed that there is an arbitration clause in the agreement between the parties. The respondents also agreed that the disputes are arbitrable.
3. Upon perusal of Clause 27, it is clear that parties have agreed to resolve their disputes through arbitration. As per Clause 28, Courts in Chennai have been vested with exclusive jurisdiction over the matters arising out of the agreement. The petitioner has also issued notice dated 14.09.2021 under Section 21 of the Arbitration and Conciliation Act, 1996, which was received by the respondents. Therefore, the petitioner is entitled to succeed.
4. Accordingly, Arb.O.P.No.287 of 2021 is allowed by appointing Mr.Justice K.Ravichandrabaabu, retired judge of this Court, Flat 1D, Crescent Castle Apartment, 13, Second Crescent Park Road, Gandhi Nagar, Adyar, Chennai – 600 020 (Mobile No : 94980 33336) as the Sole Arbitrator. The Sole Arbitrator is directed to enter upon reference and adjudicate the dispute between the parties in accordance with law. It is open to the Sole Arbitrator to fix his fees and expenses in connection with such arbitral proceedings.
5. As regards Arb.Appln.No.79 of 2021, by order dated 23.08.2021, the respondents were directed not to create any encumbrance over the property described in the schedule to the judge's summons, and an order of interim attac
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hment restraining transfer in favour of a third party was also granted. The said application is disposed of by directing that such interim order shall continue to operate for a period of two weeks from the date the arbitral tribunal enters upon reference. Meanwhile, it is open to the applicant to file an application under Section 17 of the Arbitration and Conciliation Act, 1996 seeking the same relief before the arbitral tribunal.