Sunil Singh vs. M/S Vva Developers PVT. LTD. & Ors.

Facts

The petitioner, Sunil Singh, filed a petition under Section 11 of the Arbitration and Conciliation Act, 1996, seeking the appointment of a Sole Arbitrator to adjudicate disputes with M/s VVA Developers Pvt. Ltd. (Respondent No. 1) and others. The dispute arose from an Assignment Deed dated April 24, 2017, and a subsequent Agreement dated April 27, 2017, concerning two cinema halls. The petitioner claimed a fixed minimum return of Rs. 4,30,000/- per month along with GST for four years, as well as the restoration of possession of the cinema halls. An earlier arbitration award dated June 12, 2019, had already addressed claims for the period up to April 30, 2021. The petitioner invoked arbitration again via a notice dated November 17, 2022, alleging non-compliance with a demand notice dated November 1, 2022, regarding outstanding dues and possession.

Held

The Court held that while the argument that a dispute cannot be referred to arbitration twice is generally convincing, it is not tenable in the present facts. The Court noted that the previous award dealt with claims up to April 30, 2021, and the current arbitration invocation pertains to disputes arising post that period, including the demand for possession of the cinema halls. The Court found that there was a clear intention by the petitioner to invoke arbitration and that Respondent No. 1 and 4 were made aware of the dispute. The Court applied the principles laid down in DLF Home Developers Ltd. v. Rajapura Homes (P) Ltd., which relied on Vidya Drolia v. Durga Trading Corpn., regarding the scope of jurisdiction under Section 11. The Court found substantive compliance with Section 21 of the Act, as the respondent was informed of the dispute's contours and the intention to arbitrate. Consequently, the Court referred the disputes to an arbitral tribunal and appointed Sh. H. S. Sharma as the Sole Arbitrator. All rights and contentions of the parties, including arbitrability and preliminary objections, were left open for adjudication by the arbitrator.

Key Issues

1. Whether the Court has the jurisdiction to appoint an Arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996, when a previous arbitration award has been passed concerning disputes arising from the same agreement? (Question of law). Petitioner's arguments: The petitioner contended that the current dispute involves claims post the previous arbitration award, including the restoration of possession of the cinema halls, which were not adjudicated in the prior award. They argued that the demand notice and arbitration invocation were in accordance with Section 21 of the Act, informing the respondent of the dispute's contours and the intention to arbitrate. Respondent No. 1's arguments: Respondent No. 1 argued that disputes under an agreement cannot be referred to arbitration twice. They asserted that the petitioner cannot revive the agreement for a fresh arbitration reference if the prayer was already made and adjudicated by a previous arbitrator. They also questioned the validity of the Section 21 notice. Reliance was placed on Indian Oil Corporation Limited v. Shree Ganesh Petroleum and M/S Tantia Constructions Limited v. Union Of India. Respondent No. 2's arguments: Respondent No. 2, while keeping all contentions open, submitted that the matter may be referred to arbitration.