In an application filed under Section 11 of the Arbitration and Conciliation Act, 1996 (Act) before the Punjab and Haryana High Court, seeking appointment of a sole arbitrator, a Single Judge Bench of Chief Justice Sheel Nagu appointed a sole arbitrator to adjudicate the disputes between the parties.
The disputes between the parties arose due to a Franchise Agreement executed in 2011 between the original franchisor, GT Investments BV, and the erstwhile franchisee – Chandigarh Softech Pvt Ltd, along with a Trademark License Agreement, which granted rights to operate the hotel under the ‘Golden Tulip’ brand, use of trade marks, and system support. By a Transfer Agreement dated 15-07-2023, all rights of the original franchisor were assigned to the applicant, and the respondent assumed all corresponding rights, obligations, trade marks, liabilities, as well as the past dues of the original franchisee.
The applicant invoked the arbitration clause by issuing a notice dated 11-01-2025 and proposed the name of a former Judge as the sole arbitrator. The respondent, in its reply dated 07-03-2025, suggested an alternate name, but no consensus could be reached. The disputes remained unresolved, and hence, the present petition was filed.
The Court stated that at the stage of considering an application for the appointment of an arbitrator, courts are only required to undertake a limited prima facie examination of the existence and validity of the arbitration agreement and of whether the disputes are arbitrable. Reference was made to Vidya Drolia v. Durga Trading Corporation (2021) 2 SCC 1, NTPC Ltd. v. SPML Infra Ltd. (2023) 9 SCC 385, and DLF Home Developers Ltd. v. Rajapura Homes (P) Ltd. (2021) 2 SCC 675 to state that the rule is – when in doubt, do refer.
Hence, the Court allowed the application and appointed Justice Amar Nath Jindal, Former Judge, Punjab and Haryana High Court, as the sole arbitrator to adjudicate the dispute between the parties, and directed the parties to appear before the arbitrator. The Court requested that the arbitrator complete the arbitral proceedings within the time limit stipulated under Section 29-A of the Act.
Appearances:
For Applicant – Mr. Ambanshu Sahni
For Respondents – Mr. Sonal Anand, Ms. Surbhi Singh
