In a petition filed before the Punjab and Haryana High Court under Section 11 of the Arbitration and Conciliation Act, 1996 (Act), seeking appointment of a sole arbitrator, a Single Judge Bench of Justice Jasgurpreet Singh Puri allowed the petition and rejected the objections raised by the respondents while also appointing a sole arbitrator to adjudicate the disputes.
The petitioner asserted that there existed an agreement to sell between the parties for the sale of some land belonging to the respondents, regarding which some money had been paid to them. After a dispute arose between the parties, the petitioner served a notice upon the respondents to invoke the arbitration clause and proposed names of arbitrators, but the respondents did not agree to the appointment of the arbitrator.
The respondents agreed that there existed an arbitration clause but stated that there was another clause in the agreement providing for specific performance, and that the petitioner should have filed a suit for specific performance instead of filing the present petition. It was also asserted that the respondents’ signatures had been obtained under undue influence and coercion. The respondents also contended that the terms and conditions of the agreement were never agreed to. It was also mentioned that the respondents’ phone numbers mentioned in the sale agreement were actually those of the petitioner and some witnesses.
Regarding the respondents’ objections that the agreement was signed under coercion, the terms had not been agreed to, and that the phone numbers were incorrect, the Court said that these objections were unsustainable because at the stage of reference, the Court only has to see the prima facie existence of an arbitration clause and its invocation by issuance of a notice. It was said that both these conditions exist in the present case.
Further, the Court said that it would not delve into the objections raised on merits as it would constitute a mini-trial, which is impermissible under Section 11 of the Act. Hence, three objections of the respondents were declared unsustainable and were rejected. Regarding the first objection related to the existence of a clause for specific performance, the Court said that the same was also not tenable in law.
It was stated that when a specific arbitration clause exists in an agreement, the mere presence of another clause regarding specific performance cannot oust the relevance and operation of the arbitration clause, specifically since there was no ambiguity regarding the arbitration clause.
Thus, the petition was allowed, and the Court nominated a sole arbitrator to adjudicate the dispute between the parties, subject to compliance with statutory provisions, including Section 12 of the Act. Lastly, the Court directed the parties to appear before the arbitrator on the date, time, and place fixed by the arbitrator.
Appearances:
For Petitioner – Mr. Ambanshu Sahni
For Respondents – Mr. Deepak Basatia
