Valamar Projects LLP vs Isthara Parks Private Limited ARBAPPL 6 of 2024
Facts:
1) Parties have entered into a Facilities Service Agreement on 23.02.2022 and Catering Service Agreement. Under the agreement respondent was required to supply foods to inmates of of the hostel student of the applicant and under the facility service agreement the obligation was to provide housekeeping service. Dispute has arisen between the parties. Thereupon, the Agreements were terminated on 23.05.2023.
2) After termination of the Agreements, the respondent issued a notice under Section 8 of the IBC responded to by the applicant by submitting a reply on 15.08.2023. The respondent, thereafter, filed a petition under Section 9 of the IBC on 04.O9.2023 before the National Company Law Tribunal (NCLT), in the aforesaid petition, the Tribunal by an order dated O6.1O.2023 directed issuance of notice to the applicant. After receipt of the proceeding pending before the NCLT, the applicant issued a notice on 21.1O.2023 under the 1996 Act. The respondent sent reply on 12.1 I .2023.
Issue: Whether the application can be admitted ?
Arguments:
Applicant:
1) Counsel for the applicant submitted that neither the existence of the arbitration agreement nor existence of dispute between the parties has been disputed by the respondent. It is further submitted that the agreement envisages reference of dispute to the sole arbitrator. It is concluded that notwithstanding pendency of the proceeding before the NCLT, this Court can proceed to deal with the arbitration applications on merits and there is no statutory bar. It is also contended that the notice under Section 21 of the 1996 Act need not quantify the amount of claim.
Respondent:
1) Counsel for the respondent submitted that these applications seeking appointment of an arbitrator was filed as a counterblast to the proceeding initiated by the respondent before the NCLT. It is urged that the applicant has initiated the proceedings with ulterior motives. It is also urged that the applications filed under Section 1 1(6) of the 1996 Act are not maintainable.
Decision: HC allowed the application.
Rationale:
1) HC held that the contention that in the absence of any amount mentioned in the notice under Section 21 of the 1996 Act, there is no claim against the respondent and the same cannot be referred for adjudication to arbitrator is misconceived
2) It held that no order has been passed in the proceeding under Section 9 of IBC and therefore, till such time the proceeding under Section I I (6) of the 1996 Act cannot be said to be not maintainable.
Order:
