Case Note & Summary
The applicants, Bharat Kantilal Bussa and Rita Bharat Bussa, filed an application under Section 11 of the Arbitration & Conciliation Act, 1996, seeking appointment of an arbitrator to resolve a dispute arising from two agreements dated 14th October 2009 with the respondents, Sanjana Cryogenic Storage Ltd. and others. The agreements pertained to the acquisition of 10,000 shares of M/s. RRS Mineral Resources Pvt. Ltd. by the first respondent for a total consideration of Rs.34.5 Crores. The applicants alleged that the respondents paid Rs.31.5 Crores but failed to pay the balance of Rs.1.5 Crores, which was to be kept in deposit with the company until March 2012. The agreements contained an arbitration clause (Clause 17) providing for reference of disputes to arbitration under the Act. The respondents opposed the application, but the court found that a dispute existed and that the arbitration clause was valid. The court allowed the application and appointed a retired judge of the Bombay High Court as the sole arbitrator to adjudicate the dispute.
Headnote
A) Arbitration Law - Appointment of Arbitrator - Section 11 of Arbitration & Conciliation Act, 1996 - Existence of Arbitration Clause - The court considered an application for appointment of an arbitrator under Section 11 of the Act, where the parties had entered into two agreements dated 14th October 2009 containing an arbitration clause (Clause 17). The applicant claimed that the respondent failed to pay the balance consideration of Rs.1.5 Crores, leading to a dispute. The court held that since there was an arbitration agreement and a dispute existed, the applicant was entitled to appointment of an arbitrator. (Paras 1-3)
Issue of Consideration
Whether an arbitrator should be appointed under Section 11 of the Arbitration & Conciliation Act, 1996, given the existence of an arbitration clause and a dispute regarding payment of balance consideration under a share acquisition agreement.
Final Decision
The court allowed the application and appointed a retired judge of the Bombay High Court as the sole arbitrator to adjudicate the dispute between the parties.
Law Points
- Arbitration agreement
- existence of dispute
- appointment of arbitrator under Section 11 of Arbitration & Conciliation Act
- 1996
