Allowed

Ms Enero Exports Pvt. Ltd. v. Ms Global Knitfab Ltd.

Delhi HC21 Mar 2025ARB.P./1041/2024

Case brief

AI extract

What is this about?

The Delhi High Court upheld its jurisdiction to appoint a sole arbitrator in a dispute arising from a lease agreement for knitting machines. The court noted that while the arbitration clause lacked a seat, delivery of machinery to Delhi established a part of the cause of action there. A sole arbitrator was appointed under DIAC rules.

What did the court decide?

Appointment of Ms. Shilpa Ohri as Sole Arbitrator to adjudicate disputes between the parties under the aegis of DIAC.

Ms Enero Exports Pvt. Ltd. Vs Ms Global Knitfab Ltd. — Company and Corporate | Delhi HC (2025)

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$~5

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IN THE HIGH COURT OF DELHI AT NEW DELHI

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ARB.P. 1041/2024

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M/S ENERO EXPORTS PVT. LTD .....Petitioner

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Through: Mr.Praval Arora, Mr. Aditya, Advs.

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versus

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M/S GLOBAL KNITFAB LTD .....Respondent Through: Mr. Rishub Kapoor, Adv.

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CORAM: HON'BLE MR. JUSTICE JASMEET SINGH

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O R D E R 21.03.2025

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This is a petition filed under section 11(6) of the Arbitration and Conciliation Act, 1996 seeking appointment of an Arbitrator for adjudication of disputes between the parties arising out of the Lease Agreement dated 27th September 2021.

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The arbitration clause is contained as clause 19 of the Lease Agreement, which reads as under:

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“19) ARBITRATION. All disputes, differences, claims and questions, whatsoever, which shall arise either during the subsistence of this Agreement or afterwards between the parties and/or their respective representatives touching these presents or any clause or thing herein, contained or otherwise in any way relating to or arising from these presents shall be referred to the arbitration of two Arbitrators, one to be appointed by each party

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This is a digitally signed order.

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The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 01/04/2025 at 14:35:03

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to the dispute and such arbitration shall be in accordance with and subject to the provisions of the Arbitration and Conciliation Act, 1996 or any statutory modification or re-enactment thereof for the time being in force.”

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The facts are that the petitioner, vide Lease Agreement dated 27.09.2021, entered into an arrangement with the respondent for procuring socks knitting machines for a period of six months, with the objective of manufacturing high-quality socks. In furtherance of the said agreement, the petitioner issued a security cheque of Rs 3.5 crores in favour of the respondent. However, being aggrieved by the non-functionality of the machines, the petitioner terminated the lease agreement on 31.12.2021.

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Thereafter, the petitioner invoked arbitration vide legal notice dated 27.01.2023.

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Hence, the present petition has been filed.

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Mr. Kapoor, learned counsel appears for the respondent and objects to the territorial jurisdiction of this Court to entertain the present petition on the ground that the respondent has its office in Chandigarh and no part of cause of action has arisen in Delhi.

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Admittedly, in the present case, the arbitration clause does not contain the venue or seat of arbitration. Even the Lease Agreement dated 27.09.2021 does not talk about the courts having exclusive jurisdiction to try the disputes between the parties.

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For the said reasons, the procedure prescribed under section 16 to 20 of the Code of Civil Procedure will have to be seen to determine the territorial jurisdiction to entertain the present petition.

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In the present case, even though the respondent is operating from its

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This is a digitally signed order.

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The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 01/04/2025 at 14:35:03

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office in Chandigarh, there are delivery challans issued by the respondent which show that the knitting machines have been delivered to the petitioner at A-19, FIEE Complex, Okhla Phase-2, New Delhi-110020. Additionally, there are challans by the transporter which shows that the knitting machines were transported from the address of the respondent at Dera Bassi, Chandigarh to A-19, FIEE Complex, Okhla Phase-2, New Delhi-110020, which is the address of the petitioner. It is these machines which are the subject matter of the arbitration dispute.

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For the said reasons, I am satisfied that a part of cause of action has arisen within the territorial jurisdiction of this Court. 11. For the said reasons, the petition is allowed and the following directions are issued:-

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(i) Ms. Shilpa Ohri, Adv. (Mob. No. 9871900539) is appointed as a Sole Arbitrator to adjudicate the disputes between the parties.

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(ii) The arbitration will be held under the aegis of the Delhi International Arbitration Centre, Delhi High Court, Sher Shah Road, New Delhi (hereinafter, referred to as the ‘DIAC’).

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(iii) The remuneration of the learned Arbitrator shall be in terms of DIAC (Administrative Cost and Arbitrators’ Fees) Rules, 2018.

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(iv) The learned Arbitrator is requested to furnish a declaration in terms of Section 12 of the Act prior to entering into the reference.

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(v) It is made clear that all the rights and contentions of the parties, including as to the arbitrability of any of the claim, any other preliminary objection, as well as claims/counter-claims and merits of the dispute of either of the parties, are left open for adjudication by the learned arbitrator.

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This is a digitally signed order.

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The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 01/04/2025 at 14:35:03

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(vi) The parties shall approach the learned Arbitrator within two weeks from today.

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The present petition is disposed of in the aforesaid terms.

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JASMEET SINGH, J

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MARCH 21, 2025/pk

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Click here to check corrigendum, if any

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This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 01/04/2025 at 14:35:03

Ms Enero Exports Pvt. Ltd. v. Ms Global Knitfab Ltd.

Case brief

What is this about?

What did the court decide?

Ms Enero Exports Pvt. Ltd. v. Ms Global Knitfab Ltd.

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

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