Research › Search › Judgment

Karnataka High Court · body

2025 DIGILAW 602 (KAR)

Neeraj Kumar v. Satchidananda S Sogala

2025-06-27

ASHOK S.KINAGI

body2025
ORDER : Ashok S.Kinagi, J. This Civil Miscellaneous Petition is filed under Section 11(6) of the Arbitration and Conciliation Act, 1996, for the appointment of an arbitrator to resolve the dispute between the parties in terms of clause 19 of the Joint Venture Agreement dated 15.07.2020, vide Annexure-A, as per the provisions of the Arbitration and Conciliation Act, 1996 and the Rules. 2. Brief facts, leading rise to the filing of this petition are as follows: The petitioner and respondents executed an “Agreement to form a Joint Venture in India, for soliciting Financial Products Business” on 15.07.2020. It is contended that some random codes were delivered by the respondents to the petitioner, which did not comply with the Joint Venture Agreement. There were multiple discussions between the petitioner and respondent No.1, and it was agreed that the agreement would be terminated, and the deed of termination would be signed. The draft was forwarded to respondent No.1, and respondent No.1 did not return the agreement with his signature. The petitioner issued a demand notice calling upon the respondents to return the money which was invested by the petitioner vide the demand notice dated 28.09.2022. Respondent No.1 spoke to the petitioner in October 2022, and agreed to return the money before 31.12.2022. The petitioner sent a second legal/demand notice on 25.01.2023 demanding that the money be returned to the petitioner, respondent No.1 refused to receive the said notice from the petitioner. The petitioner issued 3 rd demand cum arbitration notice on 02.03.2023, which the respondents refused. The petitioner, by invoking an arbitration clause as per the Joint Venture Agreement dated 15.07.2020, issued an arbitration notice on 20.03.2023, however, the respondents did not reply to the arbitration notice. Hence, this petition. 3. The respondents did not file a statement of objections. 4. Heard the arguments of the learned counsel for the petitioner, and the learned counsel for the respondents. 5. Learned counsel for the petitioner submits that the “Agreement to form a Joint Venture in India for soliciting Financial Products Business” was executed between the petitioner and respondents, and it was agreed that the agreement would be terminated, and a deed of termination was forwarded to respondent No.1 for affixing his signature. Respondent No.1 did not return the deed of termination with his signature. The petitioner issued several demand notices calling upon the respondents to return the money. Respondent No.1 did not return the deed of termination with his signature. The petitioner issued several demand notices calling upon the respondents to return the money. Despite service of notice, the respondents refused to return the money. The petitioner invoked the arbitration clause by issuing an arbitration notice on 20.03.2023, but the respondents did not reply. Hence, he submits that there is an arbitration clause and a dispute arose between the petitioner and the respondent. Hence, prays to allow the petition. 6. Per contra, learned counsel for the respondents submits no objection to allow the petition. 7. Perused the records and considered the submissions of the learned counsel for the parties. 8. The point, that arise for consideration is as follows: “Whether the petitioner has made out a ground to refer the dispute to the Arbitrator for the adjudication of dispute between the parties to the petition in terms of clause No.19 of the “Agreement to form a Joint Venture in India for soliciting Financial Products Business” dated 15.07.2020, vide Annexure-A as per the provisions of the Arbitration and Conciliation Act, and the Rules?” 9. The Joint Venture Agreement was executed between the petitioner and respondents on 15.07.2020, and a dispute arose between the petitioner and respondents regarding the random code that was delivered by the respondents to the petitioner, which was not as per the Joint Venture Agreement. There was ample deliberation between the petitioner and respondent No.1. It was agreed that the agreement would be terminated, and the deed of termination would be signed by both the parties. The petitioner forwarded the draft copy of the deed of termination to respondent No.1. Respondent No.1 did not return the deed of termination with his signature. The petitioner issued 3 legal notices demanding payment of the amount. Despite the service of notices, the respondents did not pay the amount. As per the Joint Venture Agreement, there is an arbitration clause, which reads as follows: “ 19. Governing Law and Dispute Resolution: This agreement shall be governed by and construed, performed and enforced in accordance with the laws of the Indian Government, at the courts in Bangalore, Karnataka State. For all disputes or controversies between the parties arising out of or relating to or in connection with this agreement, the parties agree to select a mutually agreeable neutral third party located in Bangalore, India to help them mediate it. For all disputes or controversies between the parties arising out of or relating to or in connection with this agreement, the parties agree to select a mutually agreeable neutral third party located in Bangalore, India to help them mediate it. If the mediation is unsuccessful, the parties agree that the dispute shall be decided by binding arbitration under the rules issued by the Indian Arbitration and Conciliation Act, 1996. The decision of the arbitrator shall be final. Costs and fees (other than attorney’s fees) associated with the mediation or arbitration shall be shared equally by the parties. Each party shall be responsible for its attorney’s fees associated with arbitration. The language of the arbitration shall be English, and the arbitrator shall have the authority to grant and enter orders and awards for all forms of relief and remedies related to this agreement and any dispute, including interim conservatory and equitable relief. This agreement shall be governed by and interpreted in accordance with laws of state of Karnataka in India. Each Party irrevocably submits to the exclusive jurisdiction of the courts of State of Karnataka, India, in relation to all matters arising out of or in connection with this Agreement. Notwithstanding the procedure specified above, nothing in this Agreement, or any document signed by the parties’ shall prevent or otherwise prejudice the parties rights to apply to any state Court or other judicial authority within Bangalore jurisdiction in India for interim or conservatory measures before the appointment of the arbitrator and, in the case of urgency or other exceptional circumstances, thereafter.” 10. From a bare reading of clause 19, which provides an arbitration clause it is evident that all the disputes between the parties arising out of or relating to or in connection with the agreement, the parties shall mutually agree on a neutral third party located in Bangalore, to help them mediate. If mediation is unsuccessful, the dispute shall be decided by appointing an arbitrator. The parties have mutually tried to resolve the dispute between them. The parties to the petition were unsuccessful in the mediation. 11. The petitioner got issued an arbitration notice on 02.03.2023, invoking the arbitration clause, and further issued notice on 20.03.2023, also invoking the arbitration clause and proposing the name of a retired District Judge as an arbitrator. The arbitration notice was served to the respondents. The parties to the petition were unsuccessful in the mediation. 11. The petitioner got issued an arbitration notice on 02.03.2023, invoking the arbitration clause, and further issued notice on 20.03.2023, also invoking the arbitration clause and proposing the name of a retired District Judge as an arbitrator. The arbitration notice was served to the respondents. Despite service of notice, the respondents did not reply to the arbitration notice. As there is a dispute between the parties, it must be resolved through an arbitrator. 12. Learned counsel for the respondents submits no objection to allow the petition. In view of the above discussion, the petitioner has made out a ground to refer the dispute to an arbitrator. Accordingly, I answer the point for consideration in the affirmative. 13. Accordingly, I proceed to pass the following order: ORDER i. The Civil Miscellaneous Petition is allowed. ii. Sri. N.B. Kulkarni, learned District Judge (Retired), is nominated as an arbitrator to resolve the dispute between the parties to the petition in terms of clause No.19 of the “Agreement to form a Joint Venture in India for soliciting Financial Products Business”, and as per the provisions of the Arbitration and Conciliation Act, 1996 and the Rules. iii. All the contentions of the parties are kept open. iv. The office is directed to communicate a copy of this order to the learned arbitrator, and the Arbitration and Conciliation Centre, Bengaluru. In view of the disposal of the petition, pending applications, if any, stand disposed of.