Allowed

Credavenue Private Limited v. Rahul Agarwal

Madras HC19 Dec 2023Arb O.P(COM.DIV.)/510/2023

Case brief

AI extract

What is this about?

Under Section 11(6) of the Arbitration and Conciliation Act, 1996, the High Court appointed a sole arbitrator to resolve disputes between CredAvenue Private Limited and its erstwhile employee, Rahul Agarwal, regarding alleged breach of confidentiality and novation of the employment contract.

What did the court decide?

Appointment of M. Aravind Subramaniam as sole arbitrator to adjudicate the dispute between the parties.

Credavenue Private Limited Vs Rahul Agarwal — Arbitration | Madras HC (2023)

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Arb.O.P(Com.Div.)No.510 of 2023

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IN THE HIGH COURT OF JUDICATURE AT MADRAS

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DATED : 19.12.2023

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CORAM :

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THE HONOURABLE MR.JUSTICE C.SARAVANAN

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Arb.O.P.(Com.Div.)No.510 of 2023

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CredAvenue Private Limited, Represented by its authorized signatory, Sanjutha Dhansekar, A company within the meaning of Companies Act, 2013, having its Registered office at 12^th Floor, A-Wing, Prestige Polygon, No.471, Anna Salai, Nandanam, Chennai – 600035

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... Petitioner

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Vs.

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1.Rahul Agarwal

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2.Finnup Services Private Limited, A company incorporated under the Companies Act, 2013 Having its registered office at Flat No.B/101, Greenash Building, Vasant Garden, Mulund West, Mumbai, Maharastra – 400 080. [email protected]

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... Respondents

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https://www.mhc.tn.gov.in/judis

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Arb.O.P(Com.Div.)No.510 of 2023

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Prayer: Original Petition is filed under Section 11(6) of the Arbitration and Conciliation Act, 1996, praying to appoint a sole Arbitrator to adjudicate the disputes between the Petitioner, Respondent Nos.1 and 2 under Clause 18 of the Employment Contract.

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For Petitioner : Mr.Sathish Parasuran Senior Counsel for M/s.Vivrti Law For Respondents : Mr.Karthik Sundaram

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ORDE R

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This petition has been filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 for appointment of an arbitrator. The first respondent was employed by the petitioner on 01.10.2020. An agreement dated 29.09.2021 was signed between the petitioner and the first respondent. Under the said agreement the first respondent was employed by the petitioner with retrospective effect from 01.10.2020. The aforesaid agreement contemplates an arbitration Clauses for resolving the dispute between them.

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The case of the petitioner is that the first respondent was transferred to associate company namely CredAvenue Securities with effect from 01.04.2022. However, within two months from the date of joining of the associate company, the first respondent quit the company and has floated the second respondent's

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company and has taken away vital information in breach Employment Contract dated 29.09.2021.

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The learned Senior Counsel for the petitioner would submit that the

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dispute between the petitioner and the first respondent is arbitrable in terms of Clause 13, as per which, the first respondent was required to maintain confidentially while in employment and after termination of the employment. He further submits that vital information have been gathered which indicate with the first respondent violated the confidential Clause in the aforesaid Employment Contract dated 29.09.2021.

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The learned counsel for the 1^st respondent would submit that there is a novation of the Employment Contract agreement between the first respondent

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namely CredAvenue Private Limited of the petitioner herein on 01.04.2022.

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The learned counsel for the respondent has drawn attention to the following three decisions:

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(i) Union of India Vs. Kishorilal Gupta and Brothers [1959 SCC Online Sc 6];

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(ii) Young Achievers Vs. IMS Learning Resources Private Limited [(2013) 10 SCC 535] and

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(iii) B.L.Kashyap and Sons Limited Vs. Mist Avenue Private Limited [2023 SCC Online Del 3518]

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That apart, it is submitted that question of invoking the arbitration

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Clause in the Employment Contract dated 21.09.2021 will not arise since a new contract has been signed.

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The learned counsel for the respondent also drawn attention to the decision of the Hon'ble Supreme Court in Cox and Kings Limited Vs. SAP India Private Limited and another in Arbitration Petition (Civil)No.38 of 2020. Specific reference was referred to para 165(L).

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I have considered the arguments advanced by the learned counsel for the petitioner and the learned counsel for the respondents.

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In Cox and Kings Limited Vs. SAP India Private Limited and another, it was held as under:

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165.L. At the referral stage, the referal Court should leave it for the arbitral tribunal to decide whether the non-signatory is bound by the arbitration agreement.

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Since the dispute between the petitioner and the first respondent is

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arbitrable, Court is inclined to appoint M r.M.Aravind Subramaniam, Senior Advocate, (Cell No.9840037677) having Office at Caithness Hall, 2 nd Floor,

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Arb.O.P(Com.Div.)No.510 of 2023

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Old No.157, New No.323, Linghi Chetty Street, Chennai – 600 015, is appointed as an Arbitrator to enter upon reference and adjudicate/resolve the

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inter se dispute between the parties.

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(i) The learned Arbitrator appointed herein, shall after issuing notice to the parties and upon hearing them, endeavour to complete the arbitral proceedings and pass an award strictly in accordance with the provisions of the Arbitration and Conciliation Act, 1996, as expeditiously as possible, preferably within a period of twelve months after the date of completion of pleadings under Sub-Section 4 to Section 23 as is contemplated in Section 29-A of the Arbitration and Conciliation Act, 1996, without getting influenced by any of the observations made by this Court in this order.

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(ii) The learned Arbitrator appointed herein shall be paid fees and other incidental charges as may be fixed with the consent of parties or in accordance with the provisions of the Arbitration and Conciliation Act, 1996, and the same shall be borne by the parties equally. In case, the respondents remains ex parte , the petitioner shall pay the entire fee and other incidental charges to the Arbitrator and later recover the same from the respondents.

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11. This Original Petition is allowed accordingly, leaving the parties to

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bear their own costs.

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Since this Court has appointed the Arbitrator, it is open to the

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12. Since this Court has appointed the Arbitrator, it is open to the petitioner as well as the respondents to seek other reliefs under Section 17 of the Arbitration and Conciliation Act, 1996, before the learned Arbitrator.

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13. All the issues relating to jurisdiction of the arbitrator is left open to be decided and preliminary objections of the first respondent and the second respondent are left open to be canvass before the learned Arbitrator. The parties are directed to appear before the learned Arbitrator and the parties shall pay the fees to the learned Arbitrator shall as per the order to be passed by the learned Arbitrator. In case, the respondents failed to pay the fees, it is open for the petitioner to pay the same and recover the same from the respondents in respect of the outcome of the arbitration proceedings. The learned Arbitrator shall endeavour to pass an Award as expeditiously as possible preferably within a

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period of 12 months from the date of receipt of a copy of this order.

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19.12.2023

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Index : Yes/No Internet : Yes/No Speaking Order/Non-Speaking Order Neutral Citation : Yes/No jas

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