Oyo Workspaces INDIA PVT. LTD. vs. Aufait Technologies PVT. LTD

Facts

Petitioner, OYO Workspaces India Pvt. Ltd., filed a petition under Section 11(6) of the Arbitration and Conciliation Act, 1996, seeking the appointment of an arbitrator. The parties had entered into a Membership Agreement on December 16, 2019. Petitioner claims the Respondent, AUFAIT Technologies Pvt. Ltd., failed to pay dues for the use of property, amounting to Rs. 1,62,000/- exclusive of GST for the period January 15, 2020, to January 15, 2022, and outstanding dues for the unexpired lock-in period totaling Rs. 45,25,380/-. Petitioner invoked the arbitration clause on October 31, 2022, and nominated an arbitrator. The Respondent allegedly did not appear before the arbitrator and questioned the arbitrability of the disputes in their reply to the invocation notice. Petitioner then filed the present petition.

Held

The Court held that a valid arbitration clause exists in the Membership Agreement, which clearly states that disputes shall be resolved by arbitration in accordance with the Arbitration and Conciliation Act, 1996, at New Delhi. The Court found no impediment to allowing the petition as the Agreement was duly stamped. Consequently, the Court appointed Mr. Abhimanyu A. Walia, Advocate, as the sole Arbitrator to adjudicate the disputes between the parties concerning the Membership Agreement dated December 16, 2019. The arbitration proceedings are to be conducted under the aegis of DIAC. The learned Arbitrator is required to furnish a declaration under Section 12 of the 1996 Act before entering upon the reference, and their fees will be determined as per the Fourth Schedule of the Act. The Court explicitly stated that it had not expressed any opinion on the merits of the case, leaving all rights and contentions open for the Arbitrator to decide. The Respondent was granted liberty to file counterclaims before the Arbitrator.

Key Issues

1. Whether the Court has the power to appoint an arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996, when an arbitration clause exists in the Membership Agreement. 2. Whether the disputes arising from the Membership Agreement are arbitrable. Petitioner's arguments: The Petitioner contended that a valid arbitration clause exists in the Membership Agreement, and therefore, the Court has the jurisdiction to appoint an arbitrator to adjudicate the disputes. They relied on the existence of the agreement and the invocation of the arbitration clause. Respondent's arguments: The Respondent, through their counsel, stated that they had no objection to the appointment of an arbitrator if the proceedings were conducted under the aegis of the Delhi International Arbitration Centre (DIAC). The judgment does not record specific arguments from the Respondent questioning the arbitrability of the disputes, other than noting that the Respondent had replied to the invocation notice questioning it.