M/S Triage Consultants LLP vs. T K Petcare PVT LTD
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Cause title — parties, addresses and appearances
ORAL ORDER
This Civil Miscellaneous Petition is filed under section 11(5) and (6) of the Arbitration and Conciliation Act, 1996 (for short, ‘the Act’) seeking an appointment of the sole Arbitrator in terms of clause 26 of the Term Sheet dated 31.05.2021, vide Annexure A as per the provisions of the Act.
Brief facts, leading rise to the filing of this petition are as follows:
The petitioners are investors in 1st Respondent Company, represented by its founding Directors, Respondents No. 2 and 3. The investment was made in exchange for 45% equity shares and 4% sweat equity. The Term sheet was signed upon between the petitioners and the respondents on 31.05.2021. Despite the agreement on the clauses of the Term Sheet dated 31.05.2021, Respondent No.2 and 3 failed to allot HC-KAR NC: 2026:KHC:1494 shares as agreed and pay Rs. 3,25,000/- plus GST for services rendered by the Petitioners (accounting, business consultancy, and office space). The Petitioners issued a legal notice dated 08.07.2022 demanding share allotment, payment of dues, appointment of a sole arbitrator. In response to the same, the respondents sent a reply mail dated 15.07.2022 agreeing to have a final settlement on or before 08.08.2022 and further no such settlement was called upon.
Furthermore, on 29.05.2023 the petitioners issued another notice and proposed the appointment of the sole arbitrator as per clause 26 of the Term Sheet dated 31.05.2021. In reply to which, the respondents issued a response on 29.06.2023 claiming baseless and illegal claims against the petitioners. Being constrained by the same, the petitioners have filed this petition seeking the appointment of the sole arbitrator. HC-KAR NC: 2026:KHC:1494
Heard the arguments of the learned counsel for the petitioners and the learned counsel for the respondents.
Learned counsel for the petitioner submits that the petitioners and the respondents have signed the Terms Sheet dated 31.05.2021 and after having signed the same the dispute arose between the parties. No mutual settlement is arrived at between the parties. The petitioners invoked an arbitration clause by issuing an arbitration notice on 29.05.2023. however, the Respondents issued a reply claiming baseless and illegal claims against the petitioners. He submits that the dispute has arisen between the parties and the same has to be resolved by appointing the sole arbitrator. Accordingly, on these grounds, prays to allow the petition.
Per contra, learned counsel for the respondents submits that no arbitral dispute has been arose between the HC-KAR NC: 2026:KHC:1494 parties to the petition. Accordingly, prays to dismiss the petition.
Perused the records and considered the submissions of the learned counsel for the parties.
The point, that would arise for my consideration is as follows: “Whether the petitioners have made out a ground to refer the dispute to the sole arbitrator in terms of clause 26 of the Terms Sheet dated 31.05.2021 as per the provisions of the Arbitration and Conciliation Act, 1996?”
It is undisputed that the petitioners and the respondents signed the Terms Sheet dated 31.05.2021 and after having signed the same the dispute arose between the parties. No consensus was arrived at, between the parties in resolving the dispute. The petitioner invoked the arbitration clause by issuing an arbitration notice dated 29.05.2023 at Annexure D. However, the respondents issued a reply dated HC-KAR NC: 2026:KHC:1494
2023 at Annexure E claiming a baseless and illegal claims against the petitioner. I have perused the Terms Sheet dated 31.05.2021 at Annexure A. There exists an Arbitration clause in Terms Sheet at Clause 26, which reads as follows:
Governing Law, Dispute Resolution and Juri iction: This Terms Sheet and the Transaction Documents shall be governed by and construed in accordance with the laws in India. All disputes in relation to this Term Sheet will be subject to arbitration by a sole arbitrator under the Arbitration and Conciliation Act, 1996. The place of the arbitration will be Bengaluru. Subject to the arbitration provision above, all disputes between the parties in relation to this term sheet will be subject to the exclusive juri iction of courts in Bengaluru. HC-KAR NC: 2026:KHC:1494
From the perusal of clause 26, it is evident that, all the disputes regarding the Term Sheet dated 31.05.2021 would be subject to Arbitration by the Sole Arbitrator under the provisions of the Act. In the case on hand, the dispute has arisen between the parties and the petitioner has issued an arbitration notice date 29.06.2023 vide Annexure D. However, the respondents did not turn up to comply with the demands of the petitioners.
Admittedly, there is an arbitral clause at clause 26 of the Terms Sheet dated 31.05. 2021 and the arbitral dispute arose between the parties which has to be resolved by the sole arbitrator in terms of the arbitral clause in accordance with the provisions of the Act. Therefore, the petitioner has made out a ground for appointment of the sole arbitrator to resolve the dispute between the parties to the petition. Accordingly, I answer the point in the affirmative. HC-KAR NC: 2026:KHC:1494
Given the preceding discussion, I proceed to pass the following order: ORDER
The CMP is allowed.
Sri. S.C.Ingalagi, District Judge (Retired) is appointed as the sole arbitrator to resolve the dispute between the parties to the petition in accordance with the provisions of the Act of 1996. 3. The office is directed to communicate a copy of this order to the learned Arbitrator and the Arbitration and conciliation center Bengaluru.
Pending application(s), if any, stands disposed of. (ASHOK S.KINAGI) JUDGE
SKS (Online)
Reproduced from the public record of the Karnataka High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.