M/S Adi Developers vs. Sri B A Rajagopal

The petitioner is before the court seeking for the following relief: "WHEREFORE, the petitioner prays this Hon'ble Court be pleased to nominate a designated Arbitrator, as per the satisfaction of this Hon'ble Court in terms of Clause 34 of Joint Development Agreement dated 02.09.2013 as per Annexure-A under the provisions of Sec 11(6) of the Arbitration and Conciliation Act 1996, in the interest justice."

The petitioner and the respondent had entered into a Joint Development Agreement on 02.09.2013. The said Joint Development Agreement is governed by an arbitration clause in terms of clause 34 thereof, which is extracted hereunder for easy reference: "Any dispute or difference which may arise between the PARTIES herein with regard to the intents and meaning of this Agreement or its interpretation or any part thereof or any matters relating to the agreement shall be referred for Conciliation as provided for in the Indian Arbitration and Conciliation Act, 1996, or as amended from time to time, and the decision of the Arbitral Tribunal shall be final and binding on the PARTIES."

The petitioner having invoked the arbitration clause and issued a notice on 25.06.2024 nominating its arbitrator, the respondent replied to the said notice on 24.07.2024 contending that the dispute as regards payment of tax was not be arbitrable. There being no particular HC-KAR NC: 2025:KHC:49767 agreement between the parties. In that background, the petitioner had approached this Court.

Notice having been ordered, the respondent has entered an appearance.

The submission of the counsel for the respondent before this Court also is that there is no particular clause in the agreement indicating that the respondent would be liable to meet payment of goods and services tax as claimed by the petitioner and the clause in relation to payment of tax, namely clause 28, only deals with sales tax and service tax and not GST.

There being no dispute as regards the Joint Development Agreement which has been entered into between the parties and the said Joint Development Agreement being governed by an arbitration clause, the aspect of whether GST is part of clause 28 or not would be required to be adjudicated by the arbitrator. It cannot be a ground not to appoint an arbitrator as contended by the learned counsel for the respondent. HC-KAR NC: 2025:KHC:49767

At this stage, the counsel for the respondent submits that the matter may be first referred to mediation and thereafter to arbitration so as to enable the parties to explore the possibility of settlement. The counsel for the petitioner concurs with the said submission. In that background, I pass the following: ORDER i) The CMP is allowed. ii) The matter is referred to Bengaluru Mediation Centre. The Director, Mediation Centre is requested to depute a Mediator to resolve the dispute between the parties amicably. iii) Since the order is passed in the presence of both the counsel, the parties shall appear at 02.30 p.m. on 11.12.2025 before the Director, Bengaluru Medication Center. iv) In the event of mediation not being successful, the matter is referred to Arbitration. HC-KAR NC: 2025:KHC:49767 v) Sri. N.C.Srinivasa, a former District Judge of the District Judiciary is appointed as a sole Arbitrator to arbitrate the dispute between the parties under the aegis of the Arbitration Centre attached to this Court. (SURAJ GOVINDARAJ) JUDGE