Hem Agencies vs Capital India Finanace Limited

This Petition has been filed under Section 11 of the Arbitration and Conciliation Act, 1996 ( “the Act” ), seeking appointment of an arbitrator in connection with disputes and differences that are said to have arisen between the parties under a Partnership Agreement dated January 18, 2021 (“ Agreement ”). The arbitration agreement is contained in Clause 13 (found at Page 50 of the Petition). In the interest of brevity, the arbitration agreement is not being extracted here. Suffice it to say that this matter falls within the jurisdiction of this Court.

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Shraddha

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910-ARP-10-2024.doc

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It is apparent from the record that the arbitration agreement was invoked by the Petitioner on August 3, 2023.

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It is common ground that the amounts claimed by the Respondent from the Petitioner stand paid but under protest. It is the case of the Petitioner that there is an admitted excess payment but according to the Petitioner, the amounts claimed and paid is in excess of what is admitted. In these circumstances, while no loan may be shown as outstanding, it is the case of the Petitioner that disputes and differences warranting resolution still subsists.

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The scope of review under Section 11 is explicitly set out in Section 11(6A) of the Act. It is now trite law, with particular regard to the decisions of a seven-judge bench in the Interplay Judgement¹ followed by multiple others, including SBI General² and Patel³ that the Section 11 Court ought not to venture beyond examining the existence of a validly existing arbitration agreement that has been formally executed. Even questions of existential substance is a matter that falls squarely in the domain of the arbitral tribunal, in view of Section 16 of the Act.

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1 In Re: Interplay Between Arbitration Agreements Under Arbitration and Conciliation Act, 1996 & Stamp Act, 1899 – (2024) 6 SCC 1

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2 SBI General Insurance Co. Ltd. v. Krish Spinning – 2024 SCC OnLine SC 1754

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3 Ajay Madhusudan Patel v. Jyotrindra S. Patel – 2024 SCC OnLine SC 2597

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Being satisfied that an arbitration agreement is validly in existence, and that arbitration has been duly invoked, it is in the fitness of things to refer the disputes and differences between the parties in connection with the aforesaid Agreement to arbitration by a Sole Arbitrator.

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In these circumstances, this Petition is hereby finally disposedof , in terms of the following order:

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A] Mr. Phiroze Colabawalla, a learned advocate if this Court is hereby appointed as the Sole Arbitrator to adjudicate upon the disputes and differences between the parties arising out of and in connection with the Agreement referred to above. The contact particulars of the arbitrator are set out below :

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Office Address - Mulla House, 2nd Floor, 51, M.G. Road, Fort, Mumbai -400 001.

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Email - [email protected]

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B] A copy of this Order will be communicated to the Learned Sole Arbitrator by the Advocates for the Petitioner within a period of one week from the date on which this order is uploaded on the website of this Court. The Petitioner shall provide the

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Shraddha

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910-ARP-10-2024.doc

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contact and communication particulars of the parties to the Arbitral Tribunal along with a copy of this Order;

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C] The Learned Sole Arbitrator is requested to forward the statutory Statement of Disclosure under Section 11(8) read with Section 12(1) of the Act to the parties within a period of two weeks from receipt of a copy of this Order;

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D] The parties shall appear before the Learned Sole Arbitrator on such date and at such place as indicated, to obtain appropriate directions with regard to conduct of the arbitration including fixing a schedule for pleadings, examination of witnesses, if any, schedule of hearings etc. At such meeting, the parties shall provide a valid and functional email address along with mobile and landline numbers of the respective Advocates of the parties to the Arbitral Tribunal. Communications to such email addresses shall constitute valid service of correspondence in connection with the arbitration;

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E] All arbitral costs and fees of the Arbitral Tribunal shall be

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borne by the parties equally in the first instance, and shall be subject to any final Award that may be passed by the Arbitral

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Shraddha

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910-ARP-10-2024.doc

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Tribunal in relation to costs.

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Needless to say, nothing contained in this order is an expression of an opinion on merits of the matter or the relative strength of the parties. All issues on merits are expressly kept open to be agitated before the Arbitral Tribunal appointed hereby.

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In view of the disposal of the proceedings, attendant Interim Applications, if any, also stand disposed of.

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All actions required to be taken pursuant to this order, shall be taken upon receipt of a downloaded copy as available on this Court’s website.

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[ SOMASEKHAR SUNDARESAN, J.]

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Page 5 of 5 September 4, 2025

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Shraddha

Hem Agencies v. Capital India Finanace Limited

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Hem Agencies v. Capital India Finanace Limited

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