Radhakrishna Foodland Private Limited vs. Arishi Exports Private Limited

Facts

The Petitioner, Radhakrishna Foodland Pvt. Ltd., filed a petition under Section 9 of the Arbitration and Conciliation Act, 1996, seeking reliefs concerning a property transferred to the Respondent, Arishi Exports Pvt. Ltd., for Rs. 11 Crores. The dispute arises from a Memorandum of Understanding dated March 30, 2024, and a Transfer Deed dated July 24, 2023. The Petitioner claims that GST, amounting to Rs. 2.04 Crores plus interest, was not paid at the time of the Transfer Deed execution and is payable by the Respondent. The Respondent denies this liability. The Petitioner expressed willingness to have a Sole Arbitrator appointed instead of seeking interim relief from the High Court, proposing the Section 9 petition be converted to a Section 17 petition.

Held

The Court held that Clause 38 of the Transfer Deed, which specifies Delhi as the seat and venue of arbitration, is clear and unambiguous. Therefore, the Delhi High Court has the jurisdiction to appoint an arbitrator. The Court distinguished this from Clause 29, stating that the jurisdictional clause would only be triggered for issues not covered by the arbitration clause. Consequently, the Court appointed Ms. Rashmi Chopra, Advocate, as the Sole Arbitrator to adjudicate the disputes. The arbitration proceedings will be conducted under the aegis of the Delhi International Arbitration Centre (DIAC), with the arbitrator's fee to be paid as per DIAC Rules, 2023. The petition under Section 9 of the Arbitration and Conciliation Act, 1996, was treated as a petition under Section 17 of the same Act, and all objections of the parties were left open.

Key Issues

1. Whether the Delhi High Court has the jurisdiction to appoint an arbitrator, considering Clause 29 of the Transfer Deed which vests jurisdiction in the District Court of Gautambudh Nagar and the High Court of Allahabad for disputes, versus Clause 38 which designates Delhi as the seat of arbitration. Petitioner's Argument: The arbitration clause (Clause 38) clearly states Delhi as the seat of arbitration, thus conferring jurisdiction on the Delhi High Court for matters related to arbitration. Respondent's Argument: Clause 29 of the Transfer Deed clearly states that in the event of a dispute, the District Court of Gautambudh Nagar and the High Court of Allahabad shall have jurisdiction. The Respondent relies on this clause to challenge the Delhi High Court's jurisdiction.