Gunti Nageswara Rao Vs Kalpataruvu Hydal Projects Private… — Arbitration | Andhra Pradesh HC (2025)

Gunti Nageswara Rao Vs Kalpataruvu Hydal Projects Private… — Arbitration | Andhra Pradesh HC (2025)

What the court decided

AI extract

Outcome

Appointment of Justice G. Shyam Prasad, former Judge of the High Court of Andhra Pradesh, as Arbitrator to adjudicate disputes arising out of and in connection with the Memorandum of Association within the statutory period; question of arbitrability left open; parties permitted to file detailed claims and counterclaims; arbitrator's fee per Fourth Schedule; no costs; pending miscellaneous applications closed.

Issue for consideration

Whether the disputes between the applicant and the respondents are to be resolved through arbitration under Section 11 of the Arbitration and Conciliation Act, 1996, in terms of Clause 32 of the Memorandum of Association, and whether an arbitrator should be appointed for that purpose.

Court's answer

There is no dispute with regard to the existence of the arbitration clause; since disputes have arisen, they are required to be resolved through the mechanism of arbitration agreed to by the parties in terms of Clause 32 of the Memorandum of Association.

Ratio / Principle

The arbitration application is allowed and Justice G. Shyam Prasad, former Judge of the High Court of Andhra Pradesh, is appointed as Arbitrator to enter upon the reference and adjudicate the disputes arising out of and in connection with the Memorandum of Association, rendering the award within the statutory period.

Key takeaways

The question of arbitrability of the claims is left open to be decided by the learned Arbitrator; the parties are free to file detailed claims and counterclaims before him, and his fee is to be fixed in consultation with the parties keeping in view the provisions of the Fourth Schedule of the Arbitration and Conciliation Act, 1996.ratio¶¶25

Detailed headnote1 paragraphs

Arbitration and Conciliation Act, 1996 - Section 11 - appointment of arbitrator - Clause 32 of Memorandum of Association. Applicant claiming a 30% share in the respondent company alleged that profits had not been distributed for the last ten years and that efforts to obtain statements of accounts failed; a notice invoking the arbitration clause dated 24.10.2022 was served and answered. In its counter-affidavit the respondents denied that any company styled 'Kalpataravu Hydel Projects Private Ltd.' existed and denied the applicant's right or interest. The Court (Chief Justice Dhiraj Singh Thakur) held there was no dispute regarding the existence of the arbitration clause and that, disputes having arisen, they must be resolved through arbitration per Clause 32. The application was allowed; Justice G. Shyam Prasad, former Judge of the High Court of Andhra Pradesh, was appointed Arbitrator to adjudicate disputes arising out of and in connection with the Memorandum of Association within the statutory period; the question of arbitrability of the claims was left open to the learned Arbitrator; parties were freed to file detailed claims and counterclaims; the arbitrator's fee was to be fixed in consultation with the parties per the Fourth Schedule; no costs were awarded and pending miscellaneous applications stood closed.

APHC010133732023

IN THE HIGH COURT OF ANDHRA PRADESH Bench Sr.No:-20 AT AMARAVATI [3441]

ARBITRATION APPLICATION NO: 27 of 2023

Gunti Nageswara Rao

...Applicant

Vs.

Kalpataruvu Hydal Projects Private Limited and others

...Respondents

Advocate for Applicant: Mr. Dr. Sastry Jandhyala Advocate for Respondents: Mr. Ghanta Sridhar

CORAM : THE CHIEF JUSTICE DHIRAJ SINGH THAKUR

DATE : 12^th September, 2025.

P C :

This is an application filed under Section 11 of the Arbitration and Conciliation Act, 1996, for referring the disputes to an Arbitrator in terms of Clause 32 of the Memorandum of Association, which envisages that in case of a dispute between the Company and any other Company, firm, or individual, the same is to be resolved through the mechanism of arbitration.

2. The claim of the petitioner is based on the premise that he holds 30% share in the Company and that respondents were not distributing the profits of the Company for the last 10 years, on one pretext or the other. Efforts to demand the statement of accounts also have not elicited any result.

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3. A notice invoking arbitration clause, dated 24.10.2022, was served upon the respondents, which was acknowledged inasmuch as a reply notice, too was served, to the said notice.

4. The stand of the respondents as is reflected from the counter-affidavit is that there is no Company existing in the name and style of Kalpataravu Hydel Projects Private Ltd. and that either the applicant or one Mr. Siva Sankar Reddy, had nothing to do with the properties, which were purchased with the funds belonging to the respondents, as alleged by the applicant by virtue of his notice dated 05.01.2023.

In the response filed by the respondents, it has generally been denied that no disputes have arisen between the parties, which are otherwise required to be referred for adjudication to an Arbitrator and that the applicant has absolutely no right or interest to claim any amount from the answering respondents.

5. There is no dispute with regard to the existence of an arbitration clause and since disputes have arisen, the same are required to be resolved through the mechanism of arbitration as has been agreed to by the parties in terms of Clause 32 of the Memorandum of Association.

6. Be that as it may, the present arbitration application is allowed. Justice G. Shyam Prasad, former Judge of the High Court of Andhra Pradesh, is appointed as an Arbitrator, who shall enter upon the reference and adjudicate upon the disputes arising out of and in connection with

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HCJ ARBAPPL_27_2023

Memorandum of Association and render the Award within the statutory period. The question of arbitrability of the claims is left open to be decided by the learned Arbitrator. The parties shall be free to file detailed claims and counterclaims, before the learned Arbitrator. The learned Arbitrator shall also be entitled to claim the fee in consultation with the parties, keeping in view the provisions of the Fourth Schedule of the Arbitration and Conciliation Act, 1996.

No costs. Pending miscellaneous applications, if any, in this case, shall stand closed.

A copy of this order be communicated to the learned Arbitrator on the address mentioned herein below:

Justice G. Shyam Prasad, TEAK, Flat No.604, Raintree Apartments, Nambur, Guntur, Andhra Pradesh. Ph: #83310 44099

DHIRAJ SINGH THAKUR, CJ.

SSN