M/S Sparkvee Fine Chemicals Private Limited vs. M/S Natco Pharma Limited

Held

The Court noted that learned counsel for both parties submitted that the disputes between them have been settled in terms of the "Final Settlement Agreement-cum-Memorandum of Understanding" dated 24.07.2026. This agreement, which was placed before the Court and bore the signatures of counsel for both parties along with witnesses, conclusively resolved all outstanding matters and confirmed the full and final settlement of all mutual rights and obligations. Consequently, the Court held that Arbitration Application No. 145 of 2025 should be closed in terms of this settlement agreement. All connected applications were also ordered to stand closed. The Court made no order as to costs.

Facts

M/s Sparkvee Fine Chemicals Private Limited (Applicant) filed an Arbitration Application No. 145 of 2025 before the High Court for the State of Telangana, seeking the appointment of an arbitrator under Section 11(6) of the Arbitration & Conciliation Act, 1996. This application stemmed from disputes arising under a Supply Agreement dated 29.08.2019 with M/s Natco Pharma Limited (Respondent). The Applicant sought costs of Rs. 5,00,000/-. During the pendency of the application, both parties entered into a "Final Settlement Agreement-cum-Memorandum of Understanding" dated 24.07.2026, which amicably resolved all disputes between them. This settlement agreement was placed before the Court for its perusal and consideration.

Key Issues

1. Whether the High Court should appoint an arbitrator in terms of Article 22 Clause 1.1.2 of the Supply Agreement dated 29.08.2019 between the Applicant and the Respondent, as prayed for by the Applicant under Section 11(6) of the Arbitration & Conciliation Act, 1996? The Applicant argued for the appointment of an arbitrator to adjudicate the claims and disputes. The Respondent did not explicitly argue against the appointment but participated in the settlement process. 2. What is the consequence of the "Final Settlement Agreement-cum-Memorandum of Understanding" dated 24.07.2026 executed between the parties? Both parties submitted that the disputes have been settled in terms of this agreement, implying that the arbitration application should be closed in light of this settlement.