G4S Secure Solutions INDIA Private Limited vs. Oyo Hotels And Homes PVT LTD

Facts

The petitioner, G4S Secure Solutions India Private Limited, entered into an agreement dated 16.09.2015 with Oravel Travels Pvt. Ltd. (later substituted by M/s Oravel Stays Pvt. Ltd. and then the respondent, OYO HOTELS AND HOMES PVT LTD, through a demerger) for guarding services. An addendum dated 12.10.2018 incorporated GST provisions and expanded service locations. Disputes arose when the respondent failed to clear outstanding dues as per invoices raised by the petitioner. The petitioner withdrew services and terminated the agreement on 28.09.2021. A demand notice for outstanding principal and interest was sent, which the respondent denied. The petitioner issued an arbitration invocation notice on 24.07.2024, but the respondent rejected the proposed arbitrator and denied liability. The petitioner filed a petition under Section 11(6) of the Arbitration and Conciliation Act, 1996, seeking the appointment of a Sole Arbitrator.

Held

The Court held that it had the power to appoint a Sole Arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996, as the respondent did not dispute the existence of the arbitration agreement. The Court found that the parties had agreed to resolve disputes through arbitration as per Clause 42 of their agreement. Since the respondent acceded to the appointment of an independent Sole Arbitrator, the Court proceeded to appoint one. The Court appointed Mr. Ashish Chauhan, Advocate, as the Sole Arbitrator. It was directed that the respondent would be entitled to raise preliminary objections regarding jurisdiction and arbitrability, which would be decided by the learned arbitrator. The arbitrator was also directed to furnish requisite disclosures under Section 12 of the A&C Act and was entitled to fees as per the Fourth Schedule or as agreed. All rights and contentions of the parties regarding claims and counter-claims were kept open to be decided by the Arbitrator on merits. The Court explicitly stated that its order was not an expression of its opinion on the merits of the case.

Key Issues

1. Whether the Court has the power to appoint a Sole Arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996, given the existence of an arbitration agreement between the parties? The petitioner argued that due to the respondent's failure to clear dues and denial of liability, and subsequent rejection of the proposed arbitrator, the Court's intervention is necessary to appoint an independent Sole Arbitrator to adjudicate the disputes arising from the agreement dated 16.09.2015 and its addendums. The respondent, through its counsel, did not dispute the existence of the arbitration agreement and acceded to the appointment of an independent Sole Arbitrator.