Presito Technologies (INDIA) Private Limited vs. Nakshtra Biofuels PVT. LTD. & Ors.

Facts

The petitioner, Presito Technologies (India) Private Limited, filed a petition under Section 11(6) of the Arbitration and Conciliation Act, 1996, seeking the appointment of an arbitrator. The dispute arose from a Purchase Order dated May 2, 2023, issued by Respondent No. 1, Nakshtra Biofuels Pvt. Ltd., for the purchase of Rice Husk, Bagasse, Wood Chips, and material handling systems, including related services, for a total value of Rs. 1,20,11,000/- plus applicable GST. The petitioner raised invoices for services rendered, but only partial payment was received. The Purchase Order contained an arbitration clause (Clause 12). The petitioner invoked arbitration via a legal notice dated March 10, 2025, and subsequently filed the present petition. Respondent No. 1 was served via email but did not appear before the Court.

Held

The Court held that a valid arbitration clause exists between the petitioner and Respondent No. 1, as stipulated in Clause 12 of the Purchase Order dated May 2, 2023. The Court was satisfied that disputes requiring adjudication through an arbitral mechanism had arisen between the parties. The reasoning was based on the petitioner's invocation of the arbitration clause via a legal notice and the absence of any appearance or objection from Respondent No. 1 despite proper service. The ratio decidendi is that where a valid arbitration clause is present and disputes have arisen, and the respondent fails to appear after due service, the Court shall proceed to appoint an arbitrator. Consequently, the petition was allowed, and Mr. Sunil Kumar Choudhary (Advocate) was appointed as the Sole Arbitrator to adjudicate the disputes. The arbitration proceedings are to be held under the aegis and rules of the Delhi International Arbitration Centre (DIAC), with the arbitrator's remuneration governed by the DIAC (Administrative Cost and Arbitrators’ Fees) Rules, 2018. The arbitrator was directed to furnish a declaration under Section 12 of the Act. All rights and contentions of the parties, including arbitrability and merits, were left open for the arbitrator's adjudication. The petitioner was directed to approach the arbitrator within two weeks.

Key Issues

1. Whether there is a valid arbitration clause between the parties that necessitates the appointment of an arbitrator, as contemplated under Section 11(6) of the Arbitration and Conciliation Act, 1996? Petitioner's Arguments: The petitioner contended that a valid arbitration clause existed within the Purchase Order dated May 2, 2023. They argued that disputes had arisen concerning the payment for goods and services supplied, and that despite attempts to resolve the matter amicably, the parties were unable to reach a settlement. Consequently, the petitioner invoked the arbitration clause and sought the appointment of an arbitrator to adjudicate these disputes. Revenue/State's Arguments: No arguments were recorded on behalf of the revenue or state as they were not parties to this dispute. Respondent No. 1, despite being served, did not appear before the Court, and therefore, no arguments were presented on their behalf.