INDIA Sothebys International Realty vs. Sumit Mazumder

Held

The Court held that the Petitioner's objection regarding its legal status was misconceived. The memo of parties, the affidavit of the authorized signatory, and the Agreement itself clearly indicated that India Sotheby's International Realty was a unit of Realpro Realty Solutions Pvt. Ltd., and the latter was the party to the agreement. The Court found no doubt that the parties to the Agreement were the Petitioner and the Respondent, and the Respondent had consistently accepted the Petitioner's legal status. The Court also found the objection regarding the pendency of the civil suit to be devoid of merit. The Court reasoned that the civil suit filed by the Respondent would not prevent the Petitioner from pursuing its remedy of arbitration, as the disputes were arbitrable and the arbitration agreement was not in dispute. The Court noted that the issue of whether the suit was subject to the arbitration agreement was for the Alipore Court to decide. Consequently, the petition was allowed, and an Arbitrator was appointed.

Facts

The Petitioner, India Sotheby's International Realty (a unit of Realpro Realty Solutions Pvt. Ltd.), filed a petition under Section 11(5) of the Arbitration and Conciliation Act, 1996, seeking the appointment of a Sole Arbitrator. The dispute arose from an Agreement dated May 2, 2019, where the Respondent engaged the Petitioner to manage the sale of a property. The Petitioner claimed a success fee of Rs. 1,67,00,000/- plus applicable GST, for which invoices were raised. The Respondent refused to pay, alleging false claims and breaching the agreement. The Petitioner invoked the arbitration clause, but the Respondent contended the notice was unsustainable and raised objections regarding the Petitioner's legal entity status and the pendency of a civil suit filed by the Respondent in Alipore.

Key Issues

1. Whether the Petitioner, India Sotheby's International Realty, a unit of Realpro Realty Solutions Pvt. Ltd., is a legally recognized entity capable of entering into an arbitration agreement and maintaining a petition under Section 11 of the Arbitration and Conciliation Act, 1996, considering the Respondent's contention that it is not an independent legal entity and the signatory lacked authority (Section 11(5), Arbitration and Conciliation Act, 1996)? 2. Whether the pendency of a civil suit filed by the Respondent before the Court at Alipore, concerning the same subject matter, bars the Petitioner from seeking arbitration under Section 11 of the Arbitration and Conciliation Act, 1996, given the Respondent's argument that there cannot be a partial reference of disputes to arbitration? Petitioner's Arguments: The Petitioner implicitly argued that its legal status as a unit of Realpro Realty Solutions Pvt. Ltd. was clearly established in the Agreement and that the arbitration clause was validly invoked. Respondent's Arguments: The Respondent argued that the Petitioner was not an independent legal entity and that the person executing the agreement lacked authority. Furthermore, the Respondent contended that the existence of a civil suit at Alipore, where the Petitioner's parent company was also a party, precluded the present arbitration petition, as disputes should not be split.