Mr. Mayur Khah vs. Mr. Shubh Mathur

Facts

The petitioner, Mr. Mayur Khah, filed a petition under Section 11(6) of the Arbitration and Conciliation Act, 1996, seeking the appointment of an Arbitrator. The disputes arose from a Work Order dated October 27, 2023. The Employees’ Provident Fund Organization (EPFO) awarded a work order to Broadcast Engineering Consultants India Limited (BECIL). BECIL, in turn, awarded a portion of this work to the respondent for Rs. 2,24,00,000/-. The respondent then awarded the execution of the event to the petitioner for Rs. 1,24,00,000/-. The respondent raised an invoice for Rs. 2,64,32,000/- (including GST) to BECIL. BECIL paid Rs. 2,52,76,265/- to the respondent. The petitioner raised invoices for Rs. 1,24,00,000/- for the work executed, but the respondent has only paid Rs. 30,00,000/-, leaving a pending amount of Rs. 1,16,32,000/-. The petitioner invoked the arbitration clause, but the respondent failed to appoint an Arbitrator.

Held

The Court held that the disputes between the parties are arbitrable. The Court noted that the petitioner invoked the arbitration clause and the respondent failed to appoint an Arbitrator. The respondent's contention regarding BECIL being a necessary party was considered, and the Court decided that this issue could be considered by the Arbitral Tribunal if raised by the respondent during the arbitral proceedings. The parties were in agreement that the Delhi International Arbitration Centre (DIAC) should be directed to appoint an Arbitrator. Consequently, the DIAC was directed to appoint an Arbitrator in accordance with its Rules. The remuneration of the Arbitrator was to be decided by DIAC. The Arbitrator was also requested to furnish a declaration under Section 12 of the Act. All rights and contentions of the parties were left open for adjudication by the Arbitrator.

Key Issues

1. Whether an Arbitrator should be appointed to adjudicate the disputes between the petitioner and the respondent arising from the Work Order dated October 27, 2023, and the subsequent invoices, as per Section 11(6) of the Arbitration and Conciliation Act, 1996? The petitioner argued that disputes have arisen due to the respondent's failure to pay the outstanding amount of Rs. 1,16,32,000/- for the work executed. The petitioner invoked the arbitration clause, and upon the respondent's failure to appoint an Arbitrator, filed the present petition under Section 11(6) of the Act. The respondent disputed the facts alleged in the petition. The respondent also contended that BECIL is a necessary party to the arbitration proceedings, as an agreement was executed between the respondent and BECIL, in addition to the agreement between the respondent and the petitioner.