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Peregrine Guarding Private Limited v. Nitesh Property Management Private Limited

Karnataka HC27 Jun 2022CMP/49/2021

Case brief

AI extract

What is this about?

This petition sought appointment of a sole arbitrator for a commercial dispute. The court held that the respondent cannot unilaterally appoint an arbitrator under Clause 19c of the agreement, finding such a clause vitiated by Section 12(5) of the Arbitration Act, 1996.

What did the court decide?

Appointed Sri S.S.Sarangmath as Sole Arbitrator to adjudicate the dispute under the aegis of the Arbitration Centre.

Peregrine Guarding Private Limited Vs Nitesh Property… — Arbitration | Karnataka HC (2022)

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CMP No. 49 of 2021

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 27TH DAY OF JUNE, 2022

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BEFORE

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THE HON'BLE MR JUSTICE SURAJ GOVINDARAJ CIVIL MISC. PETITION NO. 49 OF 2021

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BETWEEN:

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PEREGRINE GUARDING PRIVATE LIMITED HAVING ITS OFFICE AT PLOT NO.13 SECTOR-18, ELECTRONIC CITY GURGOAN HARYANA-122015

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AND HAVING ITS PLACE OF BUSINESS AT #110, 27TH MAIN, HSR LAYOUT, SECTOR-2 BANGALORE-560016 REPRESENTED BY ITS AUTHORIZED SIGNATORY MR. ZAFAR NAWAZ KHAN S/O LATE MR ABDUL RAHIM KHAN AGED ABOUT 57 YEARS

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…PETITIONER

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(BY SRI. SATHYANARAYANA REDDY K., ADVOCATE)

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Digitally signed by POORNIMA SHIVANNA Location: HIGH COURT OF KARNATAKA

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AND:

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NITESH PROPERTY MANAGEMENT PRIVATE LIMITED HAVING ITS REGISTERED OFFICE AT NITESH TIMESQUARE #8, 7TH FLOOR, M.G. ROAD BENGALURU-560001

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…RESPONDENT

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(BY SRI. SATHYANARAYANA., ADVOCATE)

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CMP No. 49 of 2021

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THIS CMP IS FILED UNDER SEC.11(6) OF THE ARBITRATION AND CONCILIATION ACT 1996, PRAYING THIS HONBLE COURT TO 1) APPOINT A SOLE ARBITRATOR FOR ADJUDICATION / RESOLUTION OF THE DISPUTES THAT HAS ARISEN BETWEEN THE PETITIONERS AND RESPONDENTS IN TERMS OF CLAUSE X OF SECURITY SERVICES AGREEMENT DATED 06/06/2017 PRODUCED AND MARKED AS ANNEXURE-B ENTERED IN BETWEEN THE PETITIONER AND RESPONDENT FOR RECOVERY OF THE AMOUNT. 2) AWARD COST OF THE PETITION, AND 3) GRANT SUCH OTHER AND FURTHER RELIEFS AS THIS HON'BLE COURT DEEMS FIT AND PROPER IN THE FACTS AND CIRCUMSTANCES OF THE CASE IN THE INTEREST OF JUSTICE AND EQUITY.

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THIS CMP COMING ON FOR ADMISSION, THIS DAY, THE COURT MADE THE FOLLOWING:

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ORDER

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Registry is directed to delete the name of Sri Manju

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Subbaiah M., learned counsel appearing for the petitioner and print the name of Sri Sathyanarayana Reddy K., learned counsel as that appearing for the petitioner.

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The petitioner is before this Court seeking following reliefs:

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Appoint a sole Arbitrator for adjudication/resolution of the disputes that has arisen between the petitioners and Respondents in terms of Clause X of Security Services Agreement Dated

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CMP No. 49 of 2021

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06.06.2017 produced and marked as Annexure-B entered into between the Petitioner and Respondent for recovery of the amount;

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Award cost of the petition; and

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Grant such other and further reliefs as this Hon'ble Court deems fit and proper in the facts and circumstances of the case in the interest of justice and equity.

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The petitioner and respondent entered into Security Services Agreement on 06.06.2017, which is governing the Arbitration Clause in terms of Clause X, which is produced herein for easy reference:

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"X DISPUTE RESOLUTION

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a. If any disputes, differences or questions (collectively a "Dispute") arise between the respect of this Agreement or the subject matter hereof, representatives of the parties shall cooperate, in good faith, to attempt to amicably resolve the dispute. If either Party believes that such representatives cannot resolve the Dispute, such Party may invoke the further resolution procedures of this Clause19.

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b. If representatives of the Parties cannot resolve a Dispute within thirty (30) Days, each Party shall have the right to submit the Dispute to be settled by arbitration.

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c. All disputes and differences of any kind whatsoever arising out or in connection with the Contract or the carrying out of the works (whether during the progress of the works or

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CMP No. 49 of 2021

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after their completion and whether before or after the determination, abandonment or breach of the Contract) shall be referred to Arbitration. The Party aggrieved may with the consent of the other Party refer the dispute to a Sole Arbitrator to be appointed by the company.

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d. The Arbitrator shall have power to open up review & revise any certificate opinion, decision, requisition or notice and to determine all matters in dispute which shall be submitted to him and of which notice shall have been given as aforesaid.

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e. Upon every or any such reference the cost of and incidental to the reference and Award respectively shall be to the direction of the Arbitrator who may determine the amount thereof or direct the same to be taxed as between Attorneys and Employer or as between party and party and shall direct by whom and to Whom and in what manner the same shall be borne and paid. This submission shall be deemed to be a submission to Arbitration within the meaning of the Indian Arbitration and Conciliation Act, 1996 or any modification thereof for the time being in force. The place of arbitration shall be Bangalore and language shall be English. The Award of the Arbitrator shall be final and binding on the parties.

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f. Each Party will bear its own costs and attorney's fees. The cost of the arbitrator(s) shall be evenly divided amongst the CONSULTANT and COMPANY.

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g. Performance of this Agreement shall continue during arbitration proceedings unless COMPANY shall order suspension thereof or any part thereto.

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CMP No. 49 of 2021

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h. The provisions of this Clause shall survive the expiration or earlier termination of this Agreement."

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There being certain disputes between the petitioner and the respondent as regards payment of due amount by the respondent to the petitioner. The petitioner called upon the rent payment of due amount by way of notice dated 02.09.2020, which did not evoke any response. Consequently, the petitioner invoked the Arbitration Clause vide notice dated 13.11.2020 and nominated its Arbitrator. Though the said notice has been served on the respondent, no reply is received. Hence, the petitioner has approached this Court seeking above reliefs. Even in these proceedings, notice has been issued to the respondent. Though served, none has appeared for the respondent. As such, there is no objection to the above petition.

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CMP No. 49 of 2021

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A perusal of Clause X which indicates that any dispute arising between the parties, which have to be resolved by way of arbitration by sole Arbitrator. Though appointed by the respondent, the respondent having chosen not to appoint any such Arbitrator has forfeited the right to do so. Apart there from such a clause will be in violation of Section 12(5) of the Arbitration and Conciliation Act, 1996. Since a party to a dispute cannot unilaterally appoint his nominee as an Arbitrator.

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In view thereof, I pass the following:

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ORDER

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Sri S.S.Sarangmath, a former Civil Judge of District Judiciary of Karnataka is appointed as Sole Arbitrator to arbitrate the dispute between the parties under the aegis of Arbitration Centre attached to this Court.

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Registry is directed to forward a copy of this order to the Director, Arbitration Centre to do the needful.

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Sd/JUDGE

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Peregrine Guarding Private Limited v. Nitesh Property Management Private Limited

Case brief

What is this about?

What did the court decide?

Peregrine Guarding Private Limited v. Nitesh Property Management Private Limited

Case brief

What is this about?

What did the court decide?

What the court decided

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Statutes considered

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